Your Bali Property Blogspot

By now you probably do know that you need to follow local regulations and laws when obtaining property or land in Bali. Land Zoning in Bali is one of the regulations you must be familiar with. By understanding Bali zoning map, land use, and zoning laws it will help you decide which land you should buy that fits your investment goals.   Land zoning is a government’s regulation that classify or dividing the lands into different zones based on its purposes. This regulation is considered as one of the most critical regulations for everyone that wants to own, lease, and utilize land for development purposes in Bali.   6 Types of Land Zoning in Bali There are six types of land zoning in Bali, as following:   1. Green Zone (Agricultural Land) Green zone lands are good for agricultural purposes. All those stunning rice fields you see when driving through Bali are considered mostly to be in the green zone areas. You are not allowed to build any buildings on the green zone areas as you will not be able to obtain a valid building permit for the development. This land zone is 100% for agricultural purposes and cannot be converted into a different zone type.   There are several places that have green zone lands in Bali – Sanur, Nusa Dua, and, Ubud amongst others.   2. Yellow Zone (Residential Land) Yellow zone lands are places where you can build any types of building, including villas.   Practically, yellow zone lands can be designated for agricultural purposes as well. However, if the yellow zone lands are used for agricultural purposes, you can convert the land for residential purposes or development.   Some yellow zone areas allow more houses, some allow fewer, depending on the demand and the area. This type of zone is good for titles like leasehold title – Hak Sewa, Hak Guna Bangunan title, or Hak Pakai title.   3. Red Zone (Commercial Land) Red Zones are for commercial or business purposes like markets, tourist accommodation, shopping centre, food court, clubs, bars and many more.   The characteristics of red zone area in Bali are having a higher population density and traffic and close to public facilities.   4. Pink Zone (Tourism Land) Pink zone lands are the perfect choice if you want to build a villa and utilize it for commercial purposes. Nearly the same as Red zones, Pink zoning is used for commercial and tourism use.   This type of area lets you to build villa, hotel, and resort. Having pink zone lands is quite important if you want to run vacation rental business in Bali.   You should have a villa that is strategically located near to accommodation like bar, restaurant, coffee shop, boutique, and near to beach (if possible). That factor can attract customer to choose your rental business.   If you want to have a land through leasehold title, Hak Guna Bangunan title, or Hak Pakai title, just to make sure the land is categorized as yellow or pink zone. Alternatively, you can directly have a villa through those titles.   5. Orange Zone (Commercial & Residential Land) This area provides houses and businesses in the same area. You can build a villa on orange zone land. The advantage of this area is, these lands can cater to both locals and tourists. So can be utilised for Residential purposes as well as vacation rentals.   6. Conservation Zone Conservation zone is an area where cultural and natural sites are protected. Government doesn’t allow commercial and residential activities in this area. Benoa Bay and Taman Nasional Bali Barat are examples.   Check Land Zoning in Bali Visit Bali’s National Land Agency to check the Rencana Tata Ruang Wilayah (RTRW) for insights into the Bali zoning map. You also ensure compliance with zoning laws by seeking legal assistance from lawyers who can help you in conducting due diligence.   Land Zoning in Bali: Different Zones, Different Purposes “Land zoning” probably sounds a bit technical to some. However, it stands as a important aspects to know, especially for those considering starting a property investment in Bali.   Land zoning is divided into six types according to its purposes. Before diciding in an investment property, ensure the land aligns with your preference, whether you have it through leasehold, Hak Guna Bangunan, or Hak Pakai title. You also can directly have a finished-built villa through those titles mentioned previously.

Understanding the definition of the HGB title and how to obtain it is essential for everyone who wants to invest property in Bali, including foreigners. The reason is because, Hak Guna Bangunan (HGB) is one of the most popular property titles in Indonesia. If you’re seeking information about generating income through property in Bali, this article is right for you.   This article will explain what is Hak Guna Bangunan in Indonesia and how to obtain it. So, let’s have a look!   What is Hak Guna Bangunan? Hak Guna Bangunan, or Right to Build Title in English, is a title that allows you to take control of a building on land that is owned by another individual (the landlord). Usually, the building is a villa.   According to UU No.5 Tahun 1960 tentang Peraturan Dasar Pokok-Pokok Agraria Pasal 35 ayat 1, besides taking control of a building on the land, you also can construct and have buildings on the landlord’s land.   People who are eligible to have the property through HGB are Indonesian citizens and all types of legal entity that is located in Indonesia, including Foreign-Owned Limited Liability Companies (PT PMA).   It means, that if you’re a foreigner, you must have PT PMA first before having an HGB title. Establishing PT PMA is the most secure way for foreigners to initiate business activities in Indonesia, including those related to the property sector.   According to PP No. 18 Tahun 2021 Pasal 37 ayat 1, the maximum duration of Hak Guna Bangunan ownership is 80 years – 30 years for the initial contract and can be extended to 20 years for the first extension and to 30 years for the next extension.   HGB title duration can be extended at Badan Pertahanan Nasional (BPN) office, according to the area where the certificate is registered.   The owner of the HGB title can use the villa for commercial or residential use. Also, the HGB title owner can sell and inherit the title.   3 Simple Steps to Apply Hak Guna Bangunan PT PMA can acquire Hak Guna Bangunan in Indonesia by following these three steps:   1. Perform Land Survey Performing a land survey is a vital step you must do before you sign the land lease agreement. This step aims to ensure the land has no zoning or legal issues.   Conduct due diligence and check the land certificate.   2. Obtain Required Permits There are several permits you must have to apply for Hak Guna Bangunan in Indonesia. You can obtain permits from the local government, including environmental permits and Building Approval (Persetujuan Bangunan Gedung).   To acquire those permits, you must have a blueprint of the property you want to build. So, you need to work with an architect.   3. Apply for Hak Guna Bangunan After you perform a land survey and obtain the required documents, now you can apply for HGB title at Badan Pertahanan Nasional (BPN).   Submit your application along with the required documents and make the relevant payments.   Start Your Investment Journey in Indonesia! Hak Guna Bangunan is a powerful title in Indonesia that allows you to construct a building and have control of a building on land that is owned by another individual (landlord). However, foreigners who want to have this title must establish PT PMA first.   In Indonesia, three steps explain the process of obtaining Hak Guna Bangunan – perform the land survey, obtain required permits, and apply for the title at the BPN office. If you're done all the processes, the HGB will be yours and you can start your investment journey in Indonesia.

The Indonesian government announced that Second Home Visa Indonesia was officially launched on 25 October 2022. This long-term visa news was announced through the Directorate General of Immigration under the Ministry of Law and Human Rights. This is big news for you who want to live in Indonesia for a long time, why?   With this long-term visa, your dream of living in Indonesia is much easier to turn into reality. So, this is a chance for you to enjoy Bali as your second home! What is Second Home Visa? How to obtain it?   This article will guide you to obtain this visa in Indonesia seamlessly.   What is Second Home Visa Indonesia? Second Home Visa or Visa Rumah Kedua in Indonesian, is a long-term visa that allows you to live for five to ten years in Indonesia. The duration is optional, depending on the holder’s preference. This visa is one of types of KITAP.   When you want to extend your 2nd Home Visa duration, you need to renew this long-term visa 3 months before it expires.   The holder of this visa can live in Indonesia for activities such as investment, enjoying retirement, and tourism. You can’t work for Indonesia-based companies with this visa. If you want, you need to obtain a working KITAS.   Moreover, you also can sponsor your family members (spouse, children, and parents) to apply for a Second Home Visa Indonesia with the same duration as the primary visa holder. This policy allows foreigners can move to Indonesia with their families seamlessly.   As the Indonesian government introduces this visa, Indonesia aligns itself with other Southeast Asia nations that entice foreigners with long-term visa programs, such as Malaysia, Thailand, and Singapore.   Having Property with Second Home Visa in Bali You can have property through several titles such as Hak Guna Bangunan and Hak Pakai with 2nd Home Visa Indonesia. But, this long-term visa doesn’t allow you to rent your property in Bali.   If you want to generate income from your property in Bali through the vacation rental business, you need to have PT PMA that complies with the regulations in Indonesia.   Second Home Visa Requirements As a foreigner seeking Second Home Visa Indonesia, you need to fulfill some requirements, including:   - Your valid passport with a minimum validity of 36 months. - CV (curriculum vitae). - Current colored 4 cm x 6 cm photo with a white background. - Bank statement with a minimum amount of 2 billion IDR in an Indonesian bank account. - Signed written declaration that the applicant commits to presenting a proof of funds in an Indonesian Bank with a minimum amount of 2 billion IDR.   For applying Second Home Visa for the primary visa holder’s family members (children, spouse, and parents), the Indonesia 2nd Home Visa requirements are:   - A valid passport with a minimum validity of 36 months. - Current colored 4 cm x 6 cm photo with a white background. - Scanned visa of the primary Second Home Visa Indonesia holder. - Evidence of relationship to the primary visa holder – marriage certificate in English, family card in English, and/or birth certificate in English. If the documents aren’t documented in English, the documents must undergo translation into Indonesian by a sworn translator.   Attention! Please ensure all the requirements for the 2nd Home Visa application are met. Also, note that the government won’t refund the fee if the application isn’t accepted because of incomplete documentation.   To make your process seamless, it’s advisable to seek assistance from a legal agent or expert.   How to Obtain Second Home Visa in Indonesia? The process of applying for Second Home Visa Indonesia is simple. Begin by obtaining an e-visa before to applying for the 2nd Home Visa.    The initial step involves an easy online application through the Directorate General of Immigration online portal (https://molina.imigrasi.go.id/). The first three steps are:   1. Apply Go to https://molina.imigrasi.go.id/ and click “Apply”. Before you apply, make sure the documents are well-prepared.   2. Payment You can make the fee payment by Mastercard or SIMPONI, debit card/JCB credit or Visa.   3. Download the e-visa Wait around seven to ten business days to get the application result. Once your application is approved, you can download your e-visa through a link that will be sent to your email.   After your e-visa is granted, you can use the e-visa for 90 days. Next, you can go to Indonesia to proceed with the application process for your 2nd Home Visa at the immigration.   Attention! It’s recommended to book your flight to Indonesia AFTER you have received your e-visa. If you haven’t received your e-visa, don’t book the flight.   4. Provide a Proof of Funds You’re required to present the evidence of funds to the immigration authorities to facilitate the issuance of a 2nd Home Visa.   5. Doing Biometrics The immigration will take your picture and the scan of the fingerprints. Your Second Home Visa Indonesia application will be issued within three days following the biometrics.   6. Register at the Civil Departments (Departemen Sipil) Once the 2nd Home Visa is granted, you must register at the Civil Departments to acquire the Certificate of Family Formation for Temporary Residents.   Additionally, you’ll receive the Police Certificate approximately 14 days after receiving your Second Home Visa Indonesia .   Start Your Dream Life in Indonesia! The Indonesian government finally provided Second Home Visa for foreigners who want to start a dream life on 25 October 2022. With this long-term visa, you can invest, enjoy retirement, and tourism in Indonesia.   You need to prepare all the required documents and receive e-visa first before applying Second Home Visa Indonesia. The process is simple, but you also can seek assistance from an expert to make your process smoother.

Bali is known to be one of the world’s favorite holiday destinations for travelers from all over the globe. Besides that, Bali also has a very diverse vacation rental business. Today, we’ll discuss the commercial rental license required to run and operate a vacation home in Bali – Pondok Wisata License (Homestay Operational License).   Dubbed as top 3 travel destinations nearly every year, Bali is also known for its opulent and attractive property investment market. Vacation rental business in Bali promises a high yield of ROI, remembering Bali is visited by millions of people every year.   Villas that are being used for daily rentals needs a valid Pondok Wisata License (alos known as Homestay Operational License) to make the business run legally. Getting this license is not complicated as long as the property requirements are met.   In this article, we will discuss about what Pondok Wisata is, required documents to obtain a villa rental license, and how to apply for such a license.   About Pondok Wisata License Pondok Wisata (Homestay Operational License) is a building permit that allows you to operate your property for vacation rental business purpose in Bali.   Pondok Wisata License is required for villas with up to three units (under the older license) or up to five bedrooms (under the newer license). If the property is larger than that, it requires full hotel license, known as Hotel Melati License.   As the scale of property covered by Hotel Melati License is larger, there are some additional legal restrictions to obtaining it.   Pondok Wisata License is can only be under the name of an Indonesian citizen or a valid PT PMA with scope for villa management business. The duration of this license is 5 years, and the holder of the license can extend the duration.   However, should the license in the name of an Indonesian citizen the license is more permanent.   The only way for foreigners to request Pondok Wisata License is they must set up PT PMA in order to request for obtaining it.   For Indonesian citizens, they can request to obtain Pondok Wisata license without having a company. Most the time, when licenses are applied for the PGB (previously, IMB – Building permits), this villa rental license application is done simultaneously.    Homestay Operational License can only be issued in “tourism zone” area.   So, to make sure that your property can obtain the legal license required to do daily rentals, you have to double check that you ITR (Zoning) are within the commercial zones.   Pondok Wisata Required Documents If you want to run a vacation rental business and request Pondok Wisata License for your villa, here are the 5 essential documents required, such as: - PBG documents (Building approval documents). - UKL and UPL documents (environmental management and monitoring system documents). - Company Registration Certificate (SIM). - SITU/HO documents. - NPWP number (tax number).   6 Steps in Applying for Pondok Wisata License There are some steps you must follow to obtain Pondok Wisata License. Here are six steps you need to pay attention when applying for this villa rental license.   1. The Ownership of The Villa If the villa’s holder is an Indonesian person, he/she must have the villa through: - Hak Milik, - Hak Guna Bangunan, or - Hak Sewa/Leasehold Title (as long as there’s a deal between lessee and lessor/landlord in the clause) – then you are able to register the licenses and PGB building permits in your respective landlords name.   However, if the owner is a foreigner with PT PMA, he/she must have the villa through: - Hak Guna Bangunan, or - Hak Sewa/Leasehold Title (as long as there’s a deal between lessee and lessor/landlord in the clause).   2. Property's Standards Make sure that the villa follows local government’s standard.   3. Required Documents Prepare all required documents for applying a Pondok Wisata License so that the process runs seamlessly.   4. Submit the Application You can submit the application for Homestay Operational License to the local tourism office.   5. Wait for Approval After you submit your application, it take time to get the approval. There’s waiting period for your application to be reviewed and the villa may be inspected.   6. Obtain Pondok Wisata License If all criteria are completed and the local tourism office accept your application, you will obtain your Pondok Wisata License.   Getting Pondok Wisata License takes a bit of time and may require some effort should you apply for it.     So, please make sure you have completed all the criteria’s so that your process of getting the license is easier. Besides that, you can seek assistance from legal advisor or notary to help you getting the villa rental license.   Our Properties with Pondok Wisata License There is an easier way for you who wants to run a vacation rental business in Bali.   Besides preparing Pondok Wisata requirements for obtaining “Villa Rental License”, an alternative approach is to directly acquire ownership title such as Hak Guna Bangunan or Hak Sewa/Leasehold Title for a villa that already holds Pondok Wisata License.   This is generally applied for at the same time at the PBG (previously, IMB) on most existing properties and makes it easier for most investors to not have to run through the process of application again.   Here are some of BVR hottest villas that already holds Pondok Wisata you can have through Hak Guna Bangunan or Hak Sewa:   - BLI1774 – Impressive Freehold Gem in Batu Bolong, Canggu. - BLI1713 – Wonderful Contemporary Villa in Ubud. - BLI1701 – 4 Bedroom Luxurious Villa in Seminyak. - BLI1632 – Aesthetic Apartment in Nusa Dua. - BLI1630 – Luxurious Beachfront Apartment in Nusa Dua. - BLI1603 – Tropical Luxurious Villa in Seminyak. - BLI1550 – Luxurious Tropical Hidden Gem Villa in Bukit. - BLI1546 – Luxurious and Peaceful Resort in Canggu. - BLI1507 – Tranquil Villa in Singaraja, Bali. - BLI1363 – Beachfront Property in Bondalem, North Bali.   Nevertheless, it is important to bear in mind that you can engage in a vacation rental business only if you have the title (Hak Guna Bangunan or Hak Sewa) through PT PMA.   In another way, you can have the villa managed by a professional management company that holds the relevant company structure to run rentals.   As an individual without a valid company or valid work permit in Indonesia, running a rental villa is illegal. So make sure you have your bases covered.   Ready to Invest in Bali? Bali is one of the most promising places in Indonesia for everyone who wants to run a vacation rental business. If you’ve a villa that you want to operate as a vacation rental business, make sure that the villa has a villa rental license called Pondok Wisata.   Pondok Wisata License allows you to run a rental business for your villa. If you’re a foreigner, you only can apply this license for your villa if you possess the villa title (Hak Guna Bangunan or Hak Sewa) through PT PMA, or as most villa owners, the licence can be in your landlords name which makes it easier.

Indonesia is one of the best destinations for expats to live. The first step to live in Indonesia for foreigners is having limited stay permit or KITAS. Getting a KITAS in Indonesia isn’t complicated as long as you know what are your KITAS requirements and the steps of getting it done.   If you have decided or are planning on living in Indonesia, this article is meant for you. Let’s dive into it!   What is KITAS? KITAS (Kartu Izin Tinggal Terbatas) is a limited stay permit that allows foreigner to live and stay in Indonesia for six months up to two years, depending on the KITAS you apply for.   You or your guarantors can submit your KITAS application to the Head of the Immigration Office or to the Immigration Officer whose working area includes the residence where you live.   If you need KITAS in Indonesia for living and working as an expert, you need to submit your application with these following documents:   - Letter of guarantee from your guarantors, - Valid national passport, and - Letter of recommendation from the related institutions and/or government agencies.   However, that is just one example of purposes having KITAS in Indonesia. Next, you will learn what the types of KITAS you can apply for.   Types of KITAS in Indonesia Here are the types of KITAS based on the reason you live in Indonesia.   1. Working KITAS Working KITAS is a limited stay permit which is issued to foreigners who want to work in Indonesian organization or company. The companies include:   - Foreign-owned company (PT PMA) - Local-owned company (PT PMDN)   To obtain a valid working KITAS, your employer needs to secure a work permit called IMTA from the Indonesian Ministry of Manpower (Kementerian Ketenagakerjaan) on your behalf.   You need to have the work permit IMTA (Izin Mempekerjakan Tenaga Asing) first before you can apply for KITAS. It’s a prerequisite to get working KITAS in Indonesia.   If you work in Indonesia as an expat, especially working with Indonesian clients, the IMTA is replaced with Expatriate Placement Plan (RPTKA).   The duration of your working KITAS is same as the duration of your work contract, usually one up to two years.   2. Family KITAS Family KITAS is granted to the family members (children under 18 years old and/or spouse) of the primary KITAS holder. Additionally, his type of KITAS is extended to foreign spouses of Indonesian citizens.   Family KITAS does not permit the holder to work in Indonesia.   Foreigner holding working KITAS in Indonesia have the option to sponsor their spouse and/or children to have family KITAS.   3. Investor KITAS Investor KITAS is a limited stay permit that allows you to participate business investments in Indonesia, specifically in business activities like real estate development or property investment and management.   Most of the investors who invest in Indonesian property sector through PT PMA often obtain investor KITAS as their business requirement.   4. Student KITAS Student KITAS is issued for foreigner/international student who want to study formally in Indonesian education Institution. The student KITAS in valid for one year and can be extended for the duration of your academic studies.   5. Second Home KITAS Second Home KITAS (previously known as Retirement KITAS) is issued for foreigners who are over 55 and want to enjoy their life in Indonesia. The foreigner need to have funds minimum IDR 270 million in an Indonesian bank account.   If you invest in property with a Hak Pakai title, you are also able to obtain second home KITAS in Indonesia. The minimum values for the property you have invested are IDR 5 billion in Bali and IDR 2 billion in other regions of Indonesia.   KITAS Required Documents   KITAS requirements can be separated into two perspective – general and specific requirements. General KITAS requirements are the documents you must have no matter what kind of KITAS you want to obtain. Here are the examples:  - Your valid passport. - Two colored pictures (passport-size). - Evidence of the funds you have.   Specific KITAS requirements are the other documents you must have to have KITAS in Indonesia. However, the required documents vary depending of the type of KITAS you want to obtain. Here are the brief documents lists for each type of KITAS.   1. Working KITAS - Your highest educational degree certificate. - Certificate of work experience. - Tax Identification Number (NPWP). - Your colored copy of CV or resume that completed with company’s stamp and director’s signature over the stamp. - Evidence of insurance policy issued by an Indonesian insurance company. - Company’s documents – business license (SIUP), Capital Registration License (SPPMA).   2. Family KITAS - Family card of Indonesian spouse. - ID card (KTP) of Indonesian spouse. - Birth certificate (akta lahir) of Indonesian spouse. - Bank statement of Indonesian spouse. - Birth certificate/s for dependent children (if needed).   3. Investor KITAS - Evidence of residence in Indonesia. - PT PMA registration documents. - Evidence of insurance policy issued by an Indonesian insurance company. - Tax Identification Number (NPWP).   4. Student KITAS - Letter of Acceptance (LoA) from the educational Institution where you study. - Evidence of financial responsibility from your sponsors, legal guardians, or parents. - Your academic reports.   5. Second Home KITAS - Evidence of living accommodation in Indonesia. - A statement expressing your intention to hire an Indonesian domestic worker or driver. - A statement affirming that you don’t plan to work during you stay in Indonesia.   The brief lists above is just a guide for you. Please to note that Immigration authorities may request additional KITAS requirements from time to time. So, stay update about the required documents when you try to obtain KITAS in Indonesia.   How to Apply KITAS in Indonesia? Acquiring KITAS in Indonesia is straightforward, yet it is time consuming and needs preparations of the required documents. Here are the steps you can follow in order to get a limited stay permit or KITAS.   1. Get VITAS Before you try to acquire KITAS, the first step is getting Temporary Stay Visa or entry visa (VITAS). You can get VITAS at Indonesian Embassy in your country.   After your VITAS has been approved, the Indonesian government issues a VITAS authorization number that you will need to apply for KITAS.   When you come to Indonesia, you need to report your VITAS to the Immigration Office to convert VITAS to ITAS (Izin Tinggal Terbatas), maximum 30 days after your arrival to Indonesia.   2. Know the KITAS Requirements Check and know what the requirements to obtain KITAS are. As we have discussed above, the requirements can be different based on the type of KITAS you want to obtain.   3. Gather the Documents After you know what type of KITAS you want to have and the requirements behind it, the next step is gathering the required documents.   4. Submit Your Application Once you have gathered the required documents for KITAS, the next step you can submit your application to Directorate General of Immigration’s website. You can submit your application by online here.   Choose “Izin Tinggal Tetap (ITAP)” and follow the instruction. Here, you’ll need your VITAS authorization number.   5. Pay the Fees The fifth step of applying KITAS in Indonesia is paying for the fees. You need to go to Immigration Office to finish the payment. Another way to is by online through a payment gateway. At this step, you will get the ITAS stamp on your passport.   6. Obtain Your KITAS The last step is you need to wait your application has been processed. At this moment, you need to wait for a few days to a few weeks. After it is done, you will obtain your KITAS.   Congratulations, now you can start your paradise life in Indonesia.   Start Your Paradise Life in Indonesia Obtaining KITAS is a gateway to stay and live in Indonesia without having to leave the country on visa runs – whether being an expat, investing, or enjoying a retirement.    As long as you prepare the requirements properly and understand the process (with a little bit of patience), you will secure KITAS in Indonesia easily.   Please note that we do not specialise in KITAS applications and the above serves for information purposes only.   For a more detailed explanation and breakdown of costs and required documentation please consult with a visa or KITAS agent in Bali. Information provided can be changed without prior notice so always make sure you employ a trustworthy visa/KITAS consultant to best help you and keep you up to date.

Property investment is one of the most promising businesses. Establishing a foreign investment company (PT PMA) is the safest and lawful way for foreigners if they want to initiate business operations in Indonesia.   Owning PT PMA offers you more benefits for property investment than engaging in property investment as a non-Indonesian individual. In this article, we’ll discuss PT PMA 101 in an easy and simple way.   What is PT PMA? PT PMA (Perseroan Terbatas Penanaman Modal Asing) or foreign investment company is a business entity that has foreigners as investors and is established in Indonesia region. It can be owned 100% by foreigners, but it’s possible there’s a joint venture in the company.   The Indonesian Government regulates Penanaman Modal Asing (PMA) through Government Regulation stated in Undang-Undang Nomor 25 Tahun 2023, which previously regulated PMA through Undang-Undang Nomor 6 Tahun 2007.   Foreigners who want to do investment activities to operate a business in Indonesia, either using foreign capital entirely or venture joint with local investors, are required to establish PT PMA.   Additionally, foreign investment companies must adhere to the taxation and employment regulations enforced by the Indonesian government, as the company is established within Indonesia's jurisdiction.   If you’re a foreigner who wants to have a foreign investment company, you need to consider the requirements of a foreign investment company establishment in Indonesia.   PT PMA Requirements Here are the PT PMA requirements that you should consider:   1. Business Structure - At least, there are 2 (two) shareholders consisting of all foreign individuals, all foreign legal entities, or a combination of local shareholders. - If there’s a foreigner who acts as a director, the company is required to sponsor KITAS for the director. - It’s allowed to not have a local director. However, there are certain business types that require a local director–trading business, for example. - There’s a certain position of director that isn’t allowed to be filled by a foreigner – Director of Personalia. - 1 (one) commissioner (can be local or foreign). Still, the company needs to sponsor the foreign commissioner with KITAS.   2. Investment Value - The minimum investment value for a foreign investment company is Rp 10,000.000.000.   3. Document Prerequisites - Suggested business name (can use English or Bahasa Indonesia) and the company’s domicile. - Business objectives, purposes, and operations. - Structure of organization (directors and commissioners). - Personal ID (KTP) and Tax ID (NPWP) for individual shareholders. - The documents needed to obtain the Deed of Establishment are submitted to the Notary. - Deed of PT PMA Establishment for legal entity shareholders. The Deed will be used for the licensing process via Online Single Submission Portal.   Are All Foreigners Can Establish PT PMA In Indonesia? All foreigners can make capital investments through foreign investment companies in Indonesia, as long as they can fulfill all the requirements. There are some requirements if you want to establish PT PMA in Indonesia:   - The foreigners need to establish a company based on available business types in Indonesia, as stated in Peraturan Presiden Nomor 10 Tahun 2021 and Peraturan Presiden Nomor 49 Tahun 2022. - Have a PT company that is at least owned by two shareholders. - The minimum investment number is Rp10.000.000.000. - Only can operate a big-scale business, regulated by Peraturan Pemerintah Nomor 5 Tahun 2021. - Must have a physical building as an office or production site. Virtual office isn’t allowed.   PT PMA Ownership Advantages PT PMA ownership has many advantages such as:   - PT PMA has the same rights and responsibilities as local PT. - The smallest organizational structure is one director and one commissioner. - The minimum number of shareholders is 2 (two) – individuals or legal entities. - The business licensing process can be done through one portal (Online Single Submission Portal). - Foreign investors can own 100% or only part of the company. However, in certain types of business activity. - Cheaper import and on-site tax rate.   Available Types of Business for PT PMA There are types of businesses that you can invest in through PT PMA, such as:   - Property investment. - Nature hospitality – ecotourism services. - Fixed telecommunication network. - Mobile telecommunication network. - Content-service telecommunication network (premium SMS, ringtone, etc). - Internet connection services. - Internet café. - Internet access services. - Data communication services. - Gas and oil construction services. - Cigarettes industry. - Art gallery. - Survey services. - Furniture industry. - Pharmacies industry. - Medical device industry (class B, C, and D).   Ready to Unlock Your Success? Learning a brief overview of PT PMA is a good start for you who want to start your investment journey. Knowing the basic knowledge will make it easier to learn more about establishing a foreign investment company in Indonesia.   Having PT PMA in Indonesia lets you initiate business legally as a non-Indonesian citizen. This is a golden opportunity for you to unlock your success.

There are two common types of property ownership in Indonesia – Leasehold titles and freehold titles. Sometimes, it’s confusing to understand leasehold vs freehold for individuals who want to start their property investment journey, as laws and regulations need to followed and considered when making any property investment plans.   In this article, we’ll learn what are the differences between leasehold and freehold, and the pros and cons. Let’s get started!   Leasehold vs Freehold – The Definitions In order to understand the difference between leasehold titles and freehold titles, it’s essential to know about the definition of leasehold and freehold. Let’s explore these definitions.   - Leasehold: A title that gives you the right to lease a property after having a deal with the lessor for a certain period of time as agreed to. - Freehold: The highest title that you possibly have. You can have this title through Hak Guna Bangunan or Hak Pakai. But, not for Hak Milik.   Leasehold Title Leasehold title lets you generate money through property investment in Indonesia.   You can have a leasehold title for a certain period of time. It means you won’t have the title permanently. The duration of leasehold rights is usually set up for 25 to 80 years, depending on your agreement with the lessor/landlord, or the contract that you purchase from a current lessee.   Some leases can be much shorter, but keep in mind that there are extensions based on land value at the time the contract expires.   This kind of title allows you to have the option to extend your lease period, preferably closer to the expiration date of the current lease. This property investment option is open for non-Indonesian individuals and legal entities (PT. PMA).   All you need to know about leasehold rights are completely explained in our article titled “Leasehold in Bali: A Pocket Guide for Foreigners”. Click here to access the article!   Freehold Title Freehold titles have a higher hierarchy than leasehold titles. If you have freehold titles, it means you can use your property for any purpose.   Sometimes, there’s a misunderstanding about freehold rights in Indonesia. Many people think that foreigners have a zero chance to buy freehold rights.   However, both non-Indonesian individuals and legal entities like PT. PMA can have the title if they want. Freehold rights like Hak Pakai and Hak Guna Bangunan are accessible to foreigners. Whereas, freehold rights like Hak Milik are for Indonesian citizens only.   Learn more about freehold titles, here!   Leasehold vs Freehold – Pros and Cons Now, you’re expected to have insights into both leasehold and freehold rights. This will make it more straightforward and easier for you to know what are the pros and cons when comparing leasehold vs freehold.   1. Leasehold   Pros - Less expensive – If you want to have a property through leasehold rights, it will be cheaper than the freehold titles. - More leasehold villas are available in Bali than freehold titles as Bali is very rich in foreign investors. - Newer built villas are available to leasehold clients, with larger land areas than freehold titles. - Some of the most in demand areas in Bali with great commercial real estate properties offers investors a great return on their leasehold investments with a staggering 5 Year payback period. – For more information on leasehold commercial real estate, our property agent would be able to run you through the best of the best in each location.   Cons - More limitations – Leasehold rights ownership doesn’t “own” the land. - Ownership – The rights holder is not the owner of the property. - You’ve to always make sure that should you wish to run the property as a rental business. You‘ll need to make sure that the property is in the correct zoning that allows you to obtain or have a “pondok wisata” license for daily rentals.   2. Freehold   Pros - More authorities – You’ll have more flexibility to control the property, such as doing renovation for building improvements. - Business – The holder of this rights has access to run a business through Hak Guna Bangunan should the land zoning permit you to do so. - Greater resale value as freehold titles have a steady incline.   Cons - More expensive – If you compare it to leasehold title, the freehold is more expensive. - Fewer freehold properties available in investment areas. - Most freehold properties are older than leasehold villas.   When you’re comparing leasehold vs freehold, there are pros and cons between them. Now, it’s up to you which one is better or more suitable for your needs.   Let’s Make a Right Choice! Knowing the definition, pros, and cons when comparing leasehold vs freehold helps you to have a deep understanding of those property ownership titles in Indonesia.   As the pros and cons we’ve pointed out previously, it’s your turn to choose your dream title wisely. Make a choice that fits your needs and goals of having property in Indonesia.

There are two common property ownerships you should know about as a foreigner – one is the leasehold title and secondly a freehold title. Many people know that Indonesian regulation and law allows foreigners to purchase leasehold title, but not freehold title/rights. It’s not surprising because people always relate freehold rights to Hak Milik.   Yes, you can refer to Hak Milik as synonymous with freehold rights. However, the freehold rights are not only Hak Milik. There are other titles that are included in the freehold title category that foreigners are still eligible to obtain though a valid company structure.   What’s the Definition of Freehold Property? Let’s have a look at the definition of freehold property so that you have a better understanding of it. Freehold property we can define as any property that is “free from hold” from external claims apart from the rightful title owner.   The holder of a freehold title for the property has full authority to use the property for any purpose, as long as the owner still obeys the local restrictions applied in the area, they reside in.   The selling process of freehold property needs less paperwork and the state’s approval isn’t required. But freehold property is more costly than leasehold properties.   Property titles that are categorized as freehold titles such as Hak Milik, Hak Guna Bangunan, and Hak Pakai. As a reminder, foreigners can’t own property in Indonesia through Hak Milik.   However, foreigners are still able to have these titles through:  •    Hak Guna Bangunan (HGB) – available for PT. PMA only.•    Hak Pakai (HP) – available for non-Indonesian individuals and PT. PMA.   You can learn briefly about 7 property rights in Indonesia here!   The Pros and Cons of Freehold Title Here are the pros and cons of this title for foreigners:   1. Pros of Freehold Title Ownerships  •    Need less paperwork or documents  •    Easier to sell his title  •    If the title holder has freehold land, it’s simpler to get a bank loan and renewal •    Freehold land has more promising capital growth and runs at a steady incline each year    2. Cons of Freehold Title Ownerships •    This title is more costly than a leasehold title. •    Down payments will naturally be more due to the significant price difference from lease to freehold title ownership.   If you’re a non-Indonesian individual who wants to have an HP title or PT. PMA who have decided to buy this title through HP or HGB in Indonesia, asking for help from a lawyer or notary about the regulation applied is recommended and necessary to make sure that you follow the structures and rules.   The Choice is Yours! There are many reasons why people want to have a freehold title in Indonesia. As a non-Indonesian citizen, you can have property titles through HP. For PT. PMA companies, can have property titles through HP or HGB.   To find out more on the ownership laws, how to obtain these titles and the structures involved, contact BVR Legal to assist.   There are a few requirements needed to be able to purchase under a few of these titles and here at BVR Legal we able to run you through a smooth understanding of how this could be possible for you.