| Foreign Ownership of Bali Property |
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By law, foreign ownership of Bali property is not permitted. However, there are ways for foreigners to benefit from investment in Bali property via leasehold or partnership arrangements. Below is information related to foreign ownership of Bali property along with services offered by Healy Consultants: | ||||
1.
| Bali offers a diverse array of attractions from lush mountains to idyllic beaches. Combined with a quality infrastructure and good airline services from around the region, Bali is a viable option for investors looking for a holiday home, a tropical location to retire or a property to earn rental income from. The three basic options for foreign ownership of Bali property are:
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i)
| Via an Indonesian nominee - The Indonesian nominee is registered on the land title deed. The nominee is also required to complete three other legal agreements a) a loan agreement to prove the funds have been given to the nominee by the foreign individual, b) an irrevocable power of attorney which enables the foreigner to sell, mortgage, lease or otherwise use the land and c) a permanent right of use which gives the foreigner the right to occupy and use the property.
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ii)
| Leasehold title granted to a foreign individual - a foreign individual can obtain a 25 year lease agreement renewable for a further 25 years. The government considered extending the lease period to 70 years in early 2009, but this has yet to be implemented. The lease is direct between the foreigner and the local owner. Retirees relocating to Bali or foreign companies requiring residence for their employees commonly use this method. A leasehold investment offers protection to the foreigner during the term of the lease. . | |||
iii)
| Via a Penanaman Model Asing (PMA) company - A PMA company can be 100% foreign owned and this form of title is valid for 30 years with possible extensions of 20 years and 30 years. This option can be used by multinational corporations as well as smaller off-shore companies, with hotels commonly using this form of ownership. | |||
2.
| Laws related to the ownership of landed property in Bali are governed by the National Land Agency. The agency administers matters such as registration of land rights, the granting of rights and various permits for use of land. Under the classification of certified land, there are five principle types of land rights:
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i)
| Right of Ownership (Hak Milik) - This refers to absolute ownership of land and is only valid for an Indonesian citizen, not a local or foreign corporate entity.
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ii)
| Right to Build (Hak Guna Bangunan - HGB) - This refers to the right to construct a building on land for a period of 20 or 30 years (renewable for another 20 years). This right can be held by any corporate entity (local company or a government approved PMA company).
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iii)
| Right to Rent (Hak Sewa Bangunan) - This is the right to use land owned by another party (the lessor) for building purposes. Terms of this right depend on agreements between the parties.
This right is available for a foreigner who is permanently based in Indonesia or a foreign legal entity that has a representative office in Indonesia.
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iv)
| Right of Use (Hak Pakai) - This refers to the right to use land for a certain period.
This right may be held by certain foreign individuals or a foreign legal entity with a representative office in Indonesia.
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v)
| Right of Exploitation (Hak Guna Usaha) - This right allows the exploitation of State-owned land for agriculture, fishery or husbandry purposes for a period of up to 35 years (25 years extension possible). This is valid for Indonesian individuals/entities along with government approved PMA companies. | |||
3.
| Healy Consultants provides comprehensive property management services for investors undertaking foreign ownership of Bali property. Such services include property maintenance and refurbishments, organizing appropriate property insurance, arranging property security, property valuations, finding tenants and ad hoc problem solving.
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4.
| The mortgage market in Indonesia has grown significantly in the last six years, although it is from a small base. Despite the growth, mortgage credits still accounted for only 2.5% of Indonesia's GDP. For foreign individuals wishing to own property in Bali, Healy Consultants assists with obtaining their property finance requirements. Including negotiating mortgage terms and conditions. Our firm works with leading international banks including ANZ Bank, HSBC and OCBC Bank. | |||
5.
| Whether the requirement is i) residential real estate or ii) commercial real estate, Healy Consultants offers comprehensive services to assist clients with their objective of owning property in Bali. Consideration is given to needs such as location, budget, size, proximity to international schools, and security requirements to develop appropriate property investment options. | |||
6.
| Other valuable services provided by Healy Consultants include: |
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i)
| Tax and accounting advice specific to foreign ownership of Bali property. This ensures all tax obligations are met in the most efficient manner. |
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ii)
| Appointing and supervising a local lawyer experienced in property transactions to make sure all legal matters are undertaken correctly and to protect the rights of the purchaser. |
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iii)
| For clients migrating to Bali, our firm organizers requirements such as immigration visas, relocation services, and assists with familiarization of Bali.
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Contact Us | ||||
For further information on foreign ownership of Bali property, call our Singapore office at (+65) 67350120 or contact email@healyconsultants.com
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