It might surprise you to learn that foreigners have a distinct advantage when it comes to buying in Bali, compared to the rights of locals. Yes, it surprised us too, but it's true. In spite of the numerous complications that can come up when trying to buy a villa in Bali, there are several ways in which investors from foreign parts can purchase the rights to build on the island of Indonesia - with relative safety.
Buying a Villa in Bali: The Basics
It's a sad but true fact that anyone who is not a citizen of Bali cannot personally own any property in Bali. On the other hand, foreign investors don't have to give up on the idea of owning within Bali, they just have to be a bit more creative about how they do it.
Firstly they will need to go into partnership with a Balinese native and resident, who will then pose as the nominee freeholder. These types of connections are relatively easy to make, but we cannot emphasis enough that acting with caution when selecting this individual will save you a lot of time, pain and money in the long run. Alternatively, you will need to form a foreign investment company, and it is this investment company that will hold the deeds to the land rather than any individual.
For the most part many individuals who decide to buy land in Bali, take the route of using and Indonesian native as their nominees freeholder. As we discussed earlier this does require great amount of trust and faith, but this arrangement tend to works out successfully for those who make the time to actually invest in those relationships as well as just buying land in Bali.
There are companies whose sole business is arranging these kind of business partnerships, but there is a common trail of thought that for those looking to make a better return on their investment in the long run, that you often better off setting up a PMA company, whose function is to act of your behalf
Using a Foreign Investment (PMA) Company to buy land in Bali
Foreign investment companies don't technically own the land they 're investing in. In actuality, it's the license they have which gives them the right to use the nominated piece of land for a predetermined amount of years, in a certain way. A ball park figure for this time is often 25 years, though occasionally it can be for longer or even shorter, however after this time the company will need to purchase a further license if this which to retain ownership of the land or building.
For some these red tape restrictions are very off putting, as they don't see this as actually owning and buying land in Bali, rather leasing it with a series of complicated hoops to jump through. But the reality is this is the closest that you will get to either owing land or buying a villa in Bali as a foreign investor.
If you do decide to renew your license, this is a fairly easy process which requires you to put together the correct paperwork as requested with the required fee. Getting this license renewed is usually a given unless you have been found to be using the building for reasons other than was set out within the original license agreement. For e.g if your license was to build a villa for personal usage, you would have a problem if mid-way through the licensed term you decided the villa was to be used a rental and income baring property. So make sure you have decided on the long term usage of the land or villa before applying for this license.
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