It’s a nightmare to discover that you’ve spent your hard earned money and that your property isn’t legally yours.
Unfortunately, this happened to Chris, a foreigner who had been promised a great deal for a Bali villa investment.
In March 2024, Chris was promised to invest in a Bali villa by one he was referred to as a “friend.”
He was also promised to invest only $66,000 in a villa, which would be paid off in 12 months.
Who wouldn’t want such a great promise?
Without thinking much further, Chris agreed and transferred over $30,000.
After signing the agreement and everything, he had never heard anything from her.
That happens if you invest in Bali without basic Bali’s property market and trust someone who’s not professional and eligible.
But it doesn’t have to be like that for your property… and it’s possible.
In this article, I’ll give you seven tips on how to start your safe and legal property investment in Bali.

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1. Understand Indonesian Law and Foreign Ownership
Foreign investors who want to invest in Bali must understand the property regulations. Here are some key points to consider:
- Foreigners Cannot Own Land:
Foreign individuals are not allowed to own land in Bali or Indonesia. This means you cannot buy land as a foreign investor in your name.
- Ownership through PT PMA:
However, one option for foreign investors is establishing a limited liability company called PT PMA (Penanaman Modal Asing). Through a PT PMA, foreigners can acquire freehold land and properties in the company’s name with the Hak Guna Bangunan (HGB) title.
- HGB Title:
The HGB title allows the PT PMA to have a long-term right to use the land for up to 80 years. This is the closest a foreigner can get to a lifetime ownership title.
- Leasehold Agreement:
Another option for foreign investors is to acquire property through a leasehold agreement. This is another safer (and more profitable) option for foreigners to invest in property in Bali. Leasehold means you can lease the land from the landowner for a certain time, usually up to 25 years or more. You can use the land and any buildings on it during this time.
It’s important to note that property regulations can be complex. Therefore, foreign investors should stay updated on the latest regulations and consult a local professional knowledgeable about the current requirements.
2. Understand the role of a notary
A notary is a licensed professional appointed by the government to witness the signing of important legal documents, such as property contracts.
A notary plays a crucial role in verifying the authenticity of signatures and certifying the accuracy of legal documents involved in property transactions.
They ensure that the signing process is witnessed and the documents are verified under the law.
A notary also helps ensure the smooth transfer of property ownership and minimize the risk of legal and financial complications arising from incomplete or improper documentation.
3. Inspect the land with a qualified, trusted local agent
If you’re buying land and want to build your villa off-plan, having a local agent check it out is important.
They know a lot about the area and can ensure everything is safe and legal. Here’s what they do:
- Look Carefully: The agent will look at the land you want to buy and check everything carefully. They’ll ensure the land follows the rules and has no issues that could cause trouble.
- Follow the Law: The agent knows all the rules and laws about buying land in Bali. They’ll make sure you understand them, too.
- Stay Safe: The agent will also check for any risks or dangers on the land, such as pollution or problems with the water. This helps keep you safe and ensures you’re making a good investment.
Buying a property can be a major decision for you, so having a great team that helps you navigate the foreign property market is important.
4. Avoid a nominee when buying a property in Bali
A nominee is a native Indonesian individual or a limited liability that can officially hold the property.
It is as risky as it sounds, and it is highly recommended that no contracts be signed under the nominee’s name.
In the past, when there were no legal ways for foreigners to own Bali real estate in Indonesia, the nominee was the only choice purchasers had.
If your agreement with the nominee changes or something bad happens, the Indonesian legal system will unlikely decide in your favor.
Moreover, using nominees as land rights holders is illegal as no active laws regulate such agreements.
To avoid this risk, purchase a leasehold villa from a legal and trusted real estate professional like Bali Villa Realty.
5. Be familiar with Bali real estate prices
The real estate market in Bali is not as developed as in Western countries, so it can be challenging to find transparent and regular market reports.
There is no centralized public database with all land transactions to evaluate a specific region’s median market price or sales.
But a recent report shows that property prices in Bali have fluctuated, influenced by factors such as the global pandemic and changes in tourism.
Understanding the trends and fluctuations in property prices is also important for identifying profitable areas and investment opportunities.
6. Check all the required documents/permits
Checking all the documents and permits for the property you want to buy in Bali is very important.
Here’s why:
First, check the documents and permits to ensure everything is legal and in order. This will help you know exactly what you’re buying and prevent surprises later.
Second, checking the documents helps ensure the property is safe to buy. Your real estate team usually will ensure from the start through due diligence, talking to the land owner to ensure your smooth transaction.
Lastly, it is important to follow the rules when buying property in Bali. By checking the documents and permits, you can ensure everything is done correctly. This way, you won’t have any problems with the law and can enjoy your property without any worries.
7. Understand tax implications
Understanding the tax implications lets you know what taxes you must pay and when.
This knowledge helps you avoid surprises or penalties later on. Knowing the taxes involved in property transactions, such as transfer or property taxes, is important to plan and budget accordingly.
Second, understanding the tax requirements helps you comply with the law.
Paying the necessary taxes on time can avoid legal issues or complications. This protects your investment and ensures a smooth and legally sound property purchase.
Third, it allows you to plan your finances better. When you understand the tax implications, you can factor in the costs of buying a property in Bali. This knowledge helps you make informed decisions about your budget and financial commitments. Considering the tax implications, you can avoid financial strain or unexpected costs.
Conclusion
From understanding Indonesian law to ensuring all documents are in order, we’ve covered everything you need to safely and legally invest in Bali real estate.
Now, it’s time to take action.
Investing the right way is crucial for your long-term success. Understanding property regulations, working with trusted professionals, and verifying all legal documents from the start lay a strong foundation for your investment.
Staying informed about local market prices and avoiding risky nominee arrangements will protect your interests, and proper tax planning will ensure a smooth process.
Remember to leverage the expertise of a local agent to guide you through the process and minimize risks.
Making a successful investment takes dedication, but with these tips, you’ll be well on your way to owning property in Bali safely and legally.