Buying land in Bali

What are the ways you can acquire land, use it and build property in Bali?

The first option is HAK SEWA (Leasehold, the right to lease, which includes the right to build).

A lease agreement is concluded - a contract between the tenant and the tenant, which gives the foreigner the right to use the property for a certain period. If the lease expires, the property is returned to the tenant, of course, if the contract has not been renewed, which is always possible. The law sets the duration of such a period to no more than 25 years, with the possibility of extension for 25 years. When registering, a notarized contract is concluded, which does not need to be registered with government agencies, but which guarantees your rights within the framework of the law.

The second option is the NOMINANT SYSTEM - HAK MILIK (Freehold, the right to full ownership). Only Indonesian citizens and some legal entities (state banks, religious and public organizations) have the right of full and unconditional ownership of property under Indonesian laws. Neither foreigners nor limited liability companies can own land. Bali actively uses the so-called "nominee system", in which a foreign investor provides a loan to an Indonesian citizen to purchase land. The purchase is registered to the Indonesian citizen (nominee), who concludes a notarized agreement with the investor on the transfer of property rights. This method is practiced everywhere in Indonesia. If this system is used, the foreigner appoints a nominee, an Indonesian citizen, who will officially hold an unconditional right of possession (Hak Milik, Free Hold) on behalf of the foreigner.

The title to the land is transferred from the person who previously owned the land to the Indonesian nominee. The foreigner and the nominee then sign a contract in which the nominee, as the legal owner of the property, appoints the foreigner as the owner of the property, thus making the foreigner the official owner.

The contract also means that the Indonesian nominee is obliged to comply with all of the foreigner's instructions regarding the land. Such a contract must always be concluded in the presence of a notary public.

The third option is Hak Pakai (right to use property).

The most transparent and convenient method for foreigners and legal entities to own property is the Hak Pakai method, which allows you to officially own land under exclusive rights for a limited (in fact, almost unlimited) period. Hak Pakai is the right of a foreigner or a company to use as it pleases the land owned under the Hak Milik right.

When registering this right, the nominal owner of the property (a private owner or a government agency) is deprived of the opportunity to use it and carry out any operations with it, therefore, on the part of the investor, any further actions with this property are possible. The investor has the right to sell, exchange, gift or lease the property (under the Hak Sewa (Leasehold) right). The Hak Pakai right is registered with government agencies and a registered certificate is issued to the foreign owner.

Hak Pakai is granted for a period of up to 25 years, renewable for a period of up to 75 years, making a total of 100 years, after which the land can be transferred to relatives or trustees with similar renewal options.

Choose the option that suits you best and use it to become the proud owner of land in Bali!