Purchasing real estate in Bali for a foreign investor begins with choosing the right form of ownership. Indonesian law clearly distinguishes between freehold land ownership for citizens and legal forms of use for foreigners.
The material further analyzes key instruments (Freehold, Leasehold, Hak Pakai, PT PMA), current legislation for 2025–2026, the risks of nominal structures, and the legal basis for ANTA Group's hotel projects in Bali.
The Legal Framework for Land Ownership in Indonesia: What Does the Law Say?
The basis of Indonesian land law is the Basic Agrarian Law of 1960 (Undang-Undang Pokok Agraria No. 5/1960, UUPA). Article 21 of the UUPA clearly states that the right of full private ownership of land (hak milik) in Indonesia is available exclusively to citizens of the country. Foreign individuals may not own land under hak milik, either directly or through any other means.
Key regulations governing foreigners' access to real estate in Indonesia:
- UUPA No. 5/1960 — Basic Agricultural Law, Article 21 (Hak Milik) and Article 26(2) (prohibition of circumvention of restrictions);
- PP 103/2015 - Residential Property Regulations for Foreigners Residing in Indonesia;
- PP 18/2021 - updated land rights system, Article 37 (validity of Hak Pakai and HGB);
- PP 44/1994 - regulates Hak Sewa (lease rights) for buildings;
- UU No. 40/2007 — The Companies Act regulating the structure of PT PMA;
- UU No. 6/2023 (Omnibus Law / UU Cipta Kerja) - licensing reform.
In February 2026, the province of Bali adopted a separate regulation - Perda No. 4/2026 of February 24, 2026, which introduced criminal liability for transactions with nominal owners within the province.
Freehold (Hak Milik): Why is this format not available to foreigners?
Freehold, or Hak Milik, is the strongest form of property ownership in Indonesia, with unlimited duration and the ability to be inherited, sold, or mortgaged. However, only Indonesian citizens—individuals—can hold this title. Companies, including PT PMA, are also not allowed to own Hak Milik.
The standard marketing ploy of "freehold for foreigners" in Bali actually conceals one of three legal structures: leasehold, Hak Pakai, or PT PMA with HGB. A real Hak Milik in the name of a foreigner is impossible under any circumstances in Indonesia.
An attempt to circumvent this provision by using a nominee structure (registering a Hak Milik in the name of an Indonesian citizen for the benefit of a foreigner) is considered legally void under Article 26(2) of the UUPA.
The inheritance of property rights (Hak Milik) by a foreigner is also not provided for by current legislation: a foreign heir is obliged to transfer the right to an authorized Indonesian citizen or renounce it in favor of the state within one year from the date of acceptance of the inheritance.
Leasehold (Hak Sewa) and other legal options for foreign investors
Indonesian law provides three legal formats for foreign investors to own real estate in Bali: Hak Sewa (leasehold), Hak Pakai, and PT PMA with HGB. Each format has its own validity period, residency requirements, and operational features.
Comparison of legal formats for foreign investors:
- Hak Sewa (Leasehold). Land and building lease agreement. Standard term is 25-30 years, renewable for a total of 50-70 years. No KITAS or KITAP required. Notarized (PPAT); notary fees are approximately 1% of the transaction amount. Cannot be mortgaged.
- Hak Pakai (Right to Use). A right of use registered in the name of a foreigner with the BPN (National Land Agency). Valid for 30 years, with a 20-year extension and a 30-year renewal, for a total of 80 years. Requires a valid KITAS or KITAP. Regulated by PP 103/2015 and PP 18/2021.
- PT PMA with HGB (Hak Guna Bangunan). A foreign company holds a development right (HGB) for up to 80 years (30+20+30). The minimum paid-in capital is IDR 2.5 billion (~US$150,000), with an investment plan starting from IDR 10 billion. Suitable for commercial properties and portfolio investments.
For investors seeking permanent residency, two specialized visa programs will be available in 2026: the Golden Visa (investment of at least US$350,000 for a 5-year visa or US$1 million in real estate for a 10-year visa) and the Second Home Visa (deposit of IDR 2 billion). Both programs are available subject to legal ownership of the property.
Risks of Nominee Structures: Legal Implications under Bali Law 2026
The nominee agreement—registering a Hak Milik in the name of an Indonesian citizen who is actually acting on behalf of a foreign investor—remained a gray area in the Bali market for over a decade. In 2026, the legal framework for such schemes was completely closed by provincial law Perda No. 4/2026.
Key risks of nominal structures in 2026:
- Legal invalidity of the agreement. Collateral agreements between a foreigner and a nominee owner are unenforceable in Indonesian courts. Article 26(2) of the UUPA invalidates any transfer intended to circumvent restrictions.
- Risk of loss of an asset. The legal owner (nominal owner) has the right to sell, mortgage, or transfer the property without the consent of the actual investor. Documented cases include a foreign investor losing a villa worth €4,750,000 after the nominal owner defaulted on a loan secured by the property.
- Criminal liability. Proclamation No. 4/2026 introduced criminal liability for transactions with nominee owners in the province of Bali, with penalties of up to 5 years in prison and a fine of up to IDR 1 billion.
- Risk of confiscation. An object may be seized in favor of the state by a court decision as part of release proceedings.
- Strengthening control. The Ministry of Investment has launched a program to inspect PT PMA structures and identify illegal owners, which has been in effect since June 2026.
Legal alternatives—Hak Sewa, Hak Pakai, and PT PMA with HGB—provide legal security while being accessible to all types of investment needs.
How the ANTA Group model works in Bali: the legal basis for the projects
Bali developer ANTA Group structures its projects as leaseholds through the Indonesian company PT Anta Group Development, which holds a full package of construction permits. The investor enters into an investment agreement, which can be notarized, specifying rights, warranties, and performance deadlines.
Key legal parameters of ANTA Group projects in Bali:
- Ownership form: leasehold based on an agreement with PT Anta Group Development.
- Land lease term: 51 years (26 years with a guaranteed right of extension for another 25 years).
- Registration: an investment agreement that specifies the rights and obligations of the parties.
- Remote registration: without the need for physical presence on the island.
- Legal support: full package from the developer.
The model is used in projects Radisson Individuals Anta Canggu, Ramada Encore by Wyndham Bali Anta и Noah on Sumba Island. The management company assumes operational management of the property, eliminating the need for the investor to personally participate in its operation.
Conclusions regarding the criteria for choosing a form of ownership
The form of ownership determines the level of legal protection, liquidity, and financial costs for a foreign investor in Bali. Freehold (Hak Milik) is legally unavailable to foreigners, and attempts to circumvent this regulation through nominee structures will result in direct criminal penalties in 2026, according to Perda No. 4/2026.
Criteria for choosing a legal form of ownership:
- Investment purpose. Hotel property for passive income – Leasehold through the developer. Permanent residence – Hak Pakai. Commercial activity or property portfolio – PT PMA with HGB.
- Availability of residency. Hak Pakai requires a valid KITAS or KITAP. Leasehold operates without proof of residency.
- Budget and cost structure. Leasehold — notary fee of approximately 1%. PT PMA with HGB — paid-up capital from IDR 2.5 billion, BPHTB 5%, and notary fee of ~1%; total transaction costs are 7–12% of the property price.
- Tenure of ownership. Leasehold - 25-70 years with extension, Hak Pakai and HGB - up to 80 years with extension through BPN.
- Liquidity. Hak Pakai and HGB can be mortgaged and transferred to a foreigner with valid residency. Leasehold is transferred by assignment agreement.
- Legal risk. The chosen format must be confirmed by an official BPN title or a notarized contract.
Buying apartments in Bali with a manageable risk-based installment plan is possible through a leasehold agreement with a developer with verified permits. Affiliate Program ANTA Group provides full legal and financial support for the transaction.
Get legal advice and a financial model from ANTA Group – a customized analysis of your chosen property type, a project ROI calculation, and a step-by-step plan for completing the transaction without having to physically be present in Bali!