Investing in Bali can be exciting, but sudden rule changes sometimes catch foreign investors off guard.
The good news? With the right steps, you can protect your property and keep your profits safe. You also don’t need to be in Bali full-time or become a legal expert to protect your investment.
In this guide, we’ll share some proven ways to make sure your Bali investment stays secure no matter what happens. Let’s get started!
Key Takeaways
- Stay compliant from the start – Buying in the right zone and setting up the right legal structure protect your Bali property investment from sudden rule changes.
- Work with experts – A trusted agent or legal team ensures zoning, licenses, and ownership documents are all properly checked.
- Think long-term – Secure leases, valid permits, and clear renewal terms help protect both your income and property value.
Free Download: Bali Property Investment Guide 2025
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.
Not all plots are approved for rental, even in popular areas like Canggu, Seminyak, Pererenan, or Uluwatu.
So, don’t assume. Always ask your agent to double-check the zoning before you sign anything.
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:
1. 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 local Bali 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.
2. 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.
Read More: Freehold vs Leasehold: Which Ownership Type is Right for You?
On top of all, avoid nominee agreement at all cost. Some agents will recommend using a local Indonesian as the “nominee” owner of your property.
However, this setup is risky and illegal. You don’t actually own anything, and if something goes wrong, you could lose it all.
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: 6 Smart Strategies to Boost ROI on Your Bali Investment Properties
Legal Checks Every Bali Property Buyer Should Know
Based on our direct observation, most of our clients don’t live in Bali full-time and don’t have access to key documents, many of which are in Bahasa Indonesia.
That’s why we always recommend foreign investors work with a legal team or real estate agent to protect their investment.
Your agent will 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
For example, at Bali Villa Realty by Ilot Property, we help 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, you don’t need to worry about regulation changes in Bali because we guide you through the safest and most legal path from the start.
What Our Clients Are Saying
FAQ
1. Is investing in Bali a good investment?
Yes. Bali’s real estate market offers strong returns, with typical rental yields ranging from 8–12% per year.
2. How to freehold property in Bali?
Foreigners can hold freehold property by creating a PT PMA (foreign-owned company). This legal entity allows full foreign ownership and can purchase property on behalf of its owners.
3. How much do I need to invest in Bali?
It depends on the area and type of property. Entry-level leasehold villas can start at around $50,000, while high-end luxury properties in prime locations may run into several million dollars.
Conclusion
All foreign investors must stay alert to sudden rule changes in Bali real estate. But, protecting your Bali investment isn’t as hard as it sounds.
From our experience with many clients, the keys are simple: choose the right land, always do due diligence, and set up the correct legal structure.
If you want a smoother path, we’re here to guide you no matter where you are right now.
Whether you’re ready to invest or still exploring your options, our senior advisors offer a FREE consultation—plus a personalized investment plan tailored just for you.
