“I kept picturing a knock on the door—papers missing, villa shut.”
Does it sound familiar?
You’ve probably heard stories…
Foreign investors lose income overnight from zoning crackdowns, surprise license issues, or shifting local rules.
And if you live overseas, trying to manage everything from afar, it’s even more stressful.
But here’s the good news…
You don’t need to be in Bali full-time or become a legal expert to protect your investment.
You just need the right setup and the right support behind you.
This guide will walk you through three simple steps to make your Bali property safe, legal, and stress-free…even while the rules keep shifting.
Let’s get started.
What Could Go Wrong?
Let’s be real…
Many foreign investors get hit with fines—or worse, get shut down—because of mistakes they didn’t even know they made.
Here are just a few examples:
- Buying land in the wrong zone (where short-term rentals like Airbnb aren’t allowed)
- Using an illegal nominee structure
- Forgetting to renew their business license
The scariest part? Most of them thought they were doing everything right.
But what actually matters?
3 Simple Ways to Stay Safe and Legal
1. Buy in the Right Zone
This is where many investors slip up.
Bali has different zones for different uses, like tourism, residential, and green zones.
If you plan to rent your villa short-term (like on Airbnb), it must be in a tourism zone.
Even in popular areas like Canggu, Seminyak, Pererenan, or Uluwatu, not all plots are approved for rental.
So don’t assume.
Always ask your agent to double-check the zoning before you sign anything.
Also read: Bali land zoning.
2. Choose the Right Legal Setup (and Ownership Structure)
As a foreigner, you can’t directly own land under your personal name.
But that doesn’t mean you’re out of options.
There are two safe and proven legal structures that many investors use:
- Leasehold Agreement
This is the most popular route for our clients—and for good reason.
With a leasehold, you get long-term use of the land (typically 25–30 years), with an option to extend.
It’s legal, straightforward, and perfect if:
• You want fewer legal complexities
• You’re okay not owning the land outright
• You want lower upfront costs and faster setup
What a good leasehold should include:
• Clear renewal terms
• A lease registered by a notary
• Zoning confirmation for residential or rental use
Many investors prefer leasehold because it’s simple, safe, and flexible. But only if it’s drafted by the right legal team.
Related topic: The Critical Role of a Notary When Buying Property in Bali.
- PT PMA (Foreign-Owned Company)
If you want to run a rental business legally, this is the right setup.
A PT PMA allows you to:
• Legally rent out your property (e.g., on Airbnb or Booking.com)
• Sign lease agreements under your company name
• Operate your business with full control
It takes more time and money to set up.
That’s why we recommend this route for investors who want to go all in.
Related content: Freehold vs Leasehold: Which Ownership Type is Right for You?
Avoid “nominee” structures
Some agents will recommend using a local Indonesian as the “nominee” owner of your property.
But this setup is risky and illegal.
You don’t actually own anything, and if something goes wrong, you could lose it all.
Also read: Why the Nominee Agreement Is a Risky Bet.
3. Don’t Skip Due Diligence
Think of due diligence like a health check for your villa.
You wouldn’t buy a car without checking the engine, right?
The same goes for property.
Before making any payment, a legal team should verify everything:
- That the seller truly owns the land
- That the land can legally be used the way you intend
- That all permits and licenses are valid
Read more about due diligence from One Step You Mustn’t Skip if You Invest in Property in Bali.
Investor’s “shortcut”
Most of our clients don’t live in Bali full-time.
They also don’t have access to key documents, many of which are in Bahasa.
That’s why we always recommend working with a legal team that’s done this hundreds of times.
They do the digging, so you don’t walk blindly into a bad deal. They help you:
- Pre-check zoning and legal status
- Guide you through safe ownership (like PT PMA)
- Work with notaries to secure every document
- Handle licenses and renewals on your behalf
- Provide a clear, transparent report before you commit
At Bali Villa Realty, we help our clients check:
- Land Certificate (SHM or HGB): Confirms who legally owns the land
- Zoning Letter: Shows what you’re legally allowed to do with the land
- IMB/SLF: Building permits and usage approvals
- Lease Agreement: Ensures it’s fair and includes clear renewal terms
- Pondok Wisata: Required for short-term rentals like Airbnb
That way, they don’t need to worry about regulation changes because we guide them through the safest and most legal path from the start.
Keep It Simple and Safe
Investing in Bali is easier when you understand the rules and work with the right team.
Bali’s property market is booming, but that means the rules are also tightening.
But with the right steps, you can protect your investment and grow your income, without stress.
Whether you choose leasehold or PT PMA, we’re here to guide you through the safest path.
We review your documents and connect you with trusted notaries, so you’re never guessing.
If that’s something you need, get your FREE consultation with our senior advisors below, and receive your FREE customized investment plan.
What Our Clients Are Saying
