Bali Property Law & Foreign Ownership Rules

Indonesia offers cultures, foods, and beautiful landscapes that make everyone who lives in feel like they’re living in paradise. If you experienced living in Indonesia with KITAS and extended it multiple times, you’re allowed to have KITAP in Indonesia (Permanent Stay Permit).   This article will explain from A to Z about KITAP – the requirements, how to apply, the benefits, and many more. So, let’s dive in.   Introduction to KITAP KITAP, or Permanent Stay Permit Card in English, is a stay permit granted to certain foreigners to reside and settle in Indonesia as a resident of Indonesia. This stay permit card is valid for 5 years and can be extended as long as the permit isn’t revoked.   Unlike KITAS, KITAP in Indonesia offers more advantages for you during your stay in this archipelago country. We will discuss the advantages of KITAP later.   Although KITAP offers you many advantages, not everyone is eligible to have this permit for living in Indonesia. What makes you eligible to have KITAP in Indonesia?   According to Undang-Undang Keimigrasian BAB 5 Pasal 54, you’re eligible to have KITAP if: a. If you’re a foreigner holding the limited stay permit (KITAS) as clergy, a worker, an investor, and as a second home. b. Family relations due to mixed marriage. c. Husband, wife, and/or children of a foreigner holding the KITAP permit. d. Foreigners who are formerly an Indonesian citizen and children who previously held dual citizenship.   Please note that KITAP will not be given to foreigners who don’t own a passport.   Here is one of the additional things you must fulfill to obtain KITAP in Indonesia stated in Undang-Undang Keimigrasian BAB 5 Pasal 60, as follows: - For point 'a' above, will be granted after the applicant has resided for 3 (three) consecutive years. - Point 'b' above, will be given after the marriage has reached 2 (two) years. - Point 'c' and 'd' above, can be given immediately. - Have a sponsor.   Someone with points 'b' and 'd' will be allowed to do work and/or business to fulfill the needs of life and/or his/her family.   Securing KITAP in Indonesia can be time-consuming, typically the whole process spanning around 3 months. However, the duration can be shorter and smoother if you seek assistance from a legal service.   KITAP vs KITAS: What are the Differences? Some people might be confused to understand what are the differences between KITAP and KITAS.   KITAP offers you a permanent stay permit with fewer restrictions. This permit is ideal for you who have KITAS already and want to live in Indonesia for a long time. Whereas, KITAS offers you a temporary stay.     6 Types of KITAP in Indonesia Here are 6 types of KITAP in Indonesia, such as:   1. KITAP with 5-year period of time. 2. KITAP for an indefinite period. 3. KITAP for work on a second home with a maximum 5-year period of stay. 4. KITAP is not for working on a second home. However, for the followers or family members, (husband/wife/children/parents) with a maximum 5-year period of stay. 5. KITAP for work on a second home for an indefinite period. 6. KITAP not for working on a second home. However, for the followers or family members, (husband/wife/children/parents) for an indefinite period.   6 Steps to Apply for KITAP Here are six steps on how to obtain KITAP in Indonesia, such as:   1. Find a Sponsor The first step you need to follow is finding a sponsor for your KITAP.   3 subjects are legal to become your KITAP sponsor. Those legal subjects are: - Spouse of foreigners who want to live in Indonesia. - Every Indonesian citizen can become your sponsor or guarantor. - PT PMA or Indonesian-based companies, provided that Indonesian-based companies have a minimum paid-up capital of IDR 1 billion.   2. Gather the Required Documents If you want to acquire KITAP, there are some documents you need to prepare.   Here are 7 documents needed, as follows: - Passport with active duration for at least 18 months. - KITAS (except for spouse KITAP). - Sponsor letter. - ID card (KTP) of your sponsor. - Taxpayer identification number (NPWP) of your sponsor. - A medical examination report. - A police clearance certificate (SKCK). - Letter stating you to commit not working in Indonesia and commit to employ at least two Indonesian citizens (for retirement KITAP). - Work permit (IMTA) and the legal paperwork of the company providing sponsorship (for investor, commissioner, and director KITAP).   3. Submit Your KITAP Application You can submit your KITAP application to the Immigration Office located in your residential area.   4. Pay the Fee For a KITAP application you’ve submitted, you need to pay Rp5,000,000.00. up to Rp30,000,000.00 depending on the KITAP validity period.   5. Attend the Interview After your application has been processed, the next step is attending an interview with an immigration officer. The interview will discuss about your application.   Please note that the interview will be held in Indonesian. So, if you can’t communicate well in Indonesian, having a translator is a good idea.   6. Obtain Your KITAP The Immigration Office will review your interview and will decide within 30 days. You’ll obtain your KITAP if your application is approved.   8 Benefits of Having KITAP in Indonesia Here are 8 benefits that confirm that having KITAP in Indonesia is attractive for foreigners, such as:   1. Family Sponsorship KITAP holders can live in Indonesia and be reunited with their spouses and families.   2. Indefinite Residency in Indonesia KITAP offers a prolonged residence of 5 years with renewal possibility. It means KITAP in Indonesia eliminates the requirement for yearly extension.   3. Work Permission Having KITAP (except retirement KITAP) also allows you to simplify the employment procedures and work in Indonesia without any additional permits.    4. Property Rights and Business Ownership KITAP allows investors and entrepreneurs to buy property rights or establish a business in their own names.   5. Indonesian ID Card (KTP) KITAP holders will have a right to hold an Indonesian ID Card (KTP) that applies for 5 years. The KTP can be extended if the holders want to renew their permanent stay permit.   6. Driver License (SIM) Not only KTP, but KITAP holders also have a right to hold a driver's license (SIM) as well. The SIM is valid for 5 years.   7. Banking Facilities Someone with a permanent stay permit in Indonesia can open bank accounts, apply for credit cards, or apply for loan easier.   8. Travel Benefits KITAP holders can enjoy the flexibility of multiple-entry re-entry permits (MERPs). These MERPs allow them to travel in and out of Indonesia seamlessly.   How to Extend Your KITAP? If you want to extend your KITAP, you must submit an extension application within the earliest period of 3 months and the latest is on the day the KITAP expires. The required documents and process are similar as making a new KITAP.   The extension application for KITAP in Indonesia is currently starting from Rp5,000,000.00 and the Immigration Office will review your application within 30 days

When you decide to invest and generate income in Indonesia, there are a lot of aspects you need to know well. The Indonesian tax system is one of them. Understanding NPWP in Indonesia (taxpayer identification number) is important for every individual and business in Indonesia.   In this article, we’ll discuss everything you need to know about NPWP – what is it, types of NPWP, required documents for obtaining NPWP, steps for obtaining NPWP, and many more.   Let’s get started!   What is NPWP in Indonesia? NPWP, commonly known as Taxpayer Identification Number, is a unique 15-digit number that individuals and businesses must have if they work, invest, and do business activity in Indonesia.   It means NPWP is mandatory for you if you’re an expat or have PT PMA. We will discuss who can register for NPWP more specifically later.   This number is issued by the Indonesian Tax Authority, Directorate General of Taxes (Direktorat Jenderal Pajak).   NPWP holds significance within the Indonesian tax system. It enables tax authorities to recognize and track your tax payment history and ensure your compliance with tax regulations.   The taxpayers (wajib pajak) are required to pay monthly income taxes, file annual taxes, and report income they earned outside Indonesia.   Types of NPWP in Indonesia As stated on Undang-undang (UU) No. 6 Tahun 1983, there are two types of NPWP in Indonesia, as follows:   1. Individual NPWP Individual NPWP is a type of NPWP that is issued for individuals who generate income in Indonesia, whether the individual is an Indonesian citizen or non-Indonesian (an expat).   There are three types of individual or personal NPWP – individuals who have income from permanent employment, individuals who have income from freelance, and individuals who have income from business.   2. Corporate NPWP Corporate NPWP is issued for businesses or companies that generate income in Indonesia, including PT PMA.   NPWP for corporations has three types, such as: - Private company (limited liability company, commanditaire company, and others). - State-owned enterprise or regionally-owned enterprise. - Firm, cooperative, association, foundation, or other organizations. - Permanent establishments.   Who Can Register for NPWP in Indonesia? According to Undang-undang (UU) No. 7 Tahun 1983, the individuals and entities listed below are required to undergo NPWP (taxpayer identification number) registration in Indonesia: - Reside in Indonesia and staying in Indonesia for more than 183 (one hundred and eighty-three) days within 12 (twelve) months period. - Corporate established or having their domicile in Indonesia (including PT PMA). - Undivided inheritances as one unity replace those who are entitled.   Requirements for Obtaining NPWP in Indonesia Whether you register for NPWP as an individual or for your company, it’s essential to know what are the required documents for obtaining NPWP in Indonesia and make sure you complete those. The requirements are:   1. Required Documents for Individual NPWP All types of individual NPWP have same required documents, such as: - Scan of ID card / KTP (for Indonesian citizens). - Scan of passport and KITAS / KITAP (for foreigners).   2. Required Documents for Corporate NPWP All types of corporate NPWP have same required documents, such as: - Individual NPWP of board members. - KTP (for Indonesian citizens). - KITAS / KITAP (for foreigners).   6 Simple Steps to Get NPWP Online You can register for NPWP in Indonesia quickly and easily online. Also, the cost of obtaining NPWP is free. You only need to gather the required documents and follow all the instructions to make your process seamless. Here is the process that involves, as outlined below:   1. Prepare the Required Documents The first step is preparing all the required documents before applying for NPWP. Remember, the required documents may be different depending on what kind of NPWP you want to obtain – individual or corporate.   2. Register on the Directorate General of Taxes’ Website Open the Directorate General of Taxes’ website (ereg.pajak.go.id) and follow all the instructions. Then, you’ll get an email from eregistration@pajak.go.id that contains a link. Click the link to continue to the 2nd registration.   After that, you’ll get another email from eregistration@pajak.go.id that contains a link that will redirect you to the application form.   3. Fill the Online Application Form Fill out the online application form completely. Here, the information is about tax category, identity, income, address, company address, additional info, etc.   4. Submit the Application and Verification After you fill out the form, apply. Then, click “Minta Token” to get a token for verification.   Now, revisit a new tab on your browser to check your email and access the latest message from eregistration@pajak.go.id. Copy the token code provided in that email.   Back to the website’s tab, click “Kirim Permohonan”. Check all boxes and paste the token code. Click “Kirim”.   5. Approval Please wait until your application status is “verified”. Then, review the email to see the confirmation email. In that email, you’ll get your NPWP number card.   6. Obtain Your NPWP Now, you’ve obtained your NPWP online. You have the option to either save it as PDF or print it.   4 Benefits of Obtaining NPWP in Indonesia Having an NPWP (taxpayer identification number) also serves several benefits for you, such as: - NPWP number serves as your unique identification within the Indonesian tax system. - As a requirement for obtaining a credit card. - Enables you to manage tax-related tasks and monitor your compliance with the Indonesian tax system. - Requirements for obtaining a Trade Business License (SIUP).   Generate Income in Indonesia Seamlessly! Understanding and obedience to the Indonesian tax system is essential to make your generating income activity in Indonesia legal and seamless.   There are two kinds of NPWP in Indonesia – individual and corporate. Required the documents and making process of NPWP isn't complicated as long as you gather the documents completely and follow the instructions carefully.

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.

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.

Buying a property in Indonesia, especially Bali, is really promising because of its potential to yield a high ROI. However, it’s crucial to understand land or property rights in Indonesia that are applied and the property buying process. You need to pay attention to these aspects if you’re considering property investment in Bali.   In this article, we’ll dive into property rights in Indonesia – covering its definition, the acquisition process, and the advantages you’ll have if you have the title.   An Insight: Property Rights in Indonesia   Let’s get “brief” insights about property rights in Indonesia before we deep dive and learn each type of them.   So, what is the definition of property rights?   Property rights, or property ownerships, refer to the legal ownership and control over the property. The owners of the property can be individuals, governments, and corporations.   There are so many kinds of property and it has a broad scope concept. As a result, legal protection for every property can be significantly different between jurisdictions.   But, in this article, we’ll discuss real estate objects' perspective – villas, hotels, lands, houses, and apartments.   Property ownership lets the owners have privileges on their properties – selling, renting, leasing, or generating profits.   Property rights in Indonesia are regulated by the Agrarian Law (Hukum Agraria). This law came from customary laws (Hukum Adat) that had been applied at the rural level for hundreds of years and then modified by Dutch colonial.   The Agrarian Law that applies in Indonesia is still considering concepts under customary laws (Hukum Adat).   In addition to this law, Chair of the National Land Agency (Badan Pertahanan Nasional) or the State Ministry of Agrarian (Kementerian Agraria dan Tata Ruang) also issues other property ownership regulations in this country.   These rules govern the property buying process in Indonesia. Whether you’re local or foreigner, you must know and stick to these rules in order to ensure a smooth property buying process experience.     7 Property Rights in Indonesia   There are seven property rights in Indonesia, each accompanied by a specific purpose.   If you’re a non-Indonesian who wants to have a property in Indonesia, please be aware of the restrictions that apply to the property ownership eligibility.   Let’s familiarize yourself with them!     1. Hak Milik (HM)   Hak Milik in Indonesia lets you have full ownership of land. As of today, only Indonesian citizens can acquire the rights – either buying from individual ownership, company ownership, or state-owned land. This title is one of the rights included in the freehold rights category.   Individually-owned land can vary from certified to even uncertified lands such as Girik, Letter C, or Eigendom Verponding which are usually owned in rural villages.   Furthermore, the property and land rights can be different – in this scenario, they might have different owners.   Lastly, if you are an Indonesian citizen, you can upgrade any land rights, both certified or uncertified, into freehold rights by registering with the Badan Pertanahan Nasional (BPN). Hak Milik is the only rights that don’t have time restrictions regarding their ownership.     2. Hak Sewa Bangunan (HSB) – Leasehold rights   Leasehold rights gives you the right to rent or lease a property. Foreigner citizens have a chance to have leasehold rights – both individuals and PT. PMA in Indonesia.   Indonesian citizens can lease their properties through their freehold title or Hak Milik. Whereas, PT. PMA can lease their properties through Hak Guna Bangunan.   If you’ve got a leasehold title on your property as an individual, you’re able to rent your property to generate income.   The requirement is really simple. You only need your passport to obtain the leasehold title if you’re a foreigner and an ID card (KTP) if you’re an Indonesian.   You’re allowed to have leasehold rights for 30 to 80 years with an option to extend.   Want to know more about leasehold title and start generating income? Learn about leasehold title here!     3. Hak Pakai (HP) – Right to use title   In addition to leasehold title, as a foreign citizen, you also have a right to own Hak Pakai in Indonesia. However, this type of property only allows you to use the property for residential purposes, not for generating income (rent to someone else). Hak Pakai is included in the freehold rights category.   You need to prepare your second home visa, KITAS, or KITAP, and BPN’s form to apply for Hak Pakai ownership.   If you decide to have a holiday home, retirement plan, or planning to move to Indonesia, this land rights is fitting for you.   The duration of Hak Pakai ownership over land with Hak Milik is 25 years and can’t be extended. However, if the Hak Pakai and Hak Milik holders agree to have an extension option, it’s possible to extend Hak Pakai ownership.   The maximum validity period of Hak Pakai is 70 years – 45 years duration agreement up with 25 years of extension. The new Hak Pakai certificate is released by Pejabat Pembuat Akta Tanah.     4. Hak Guna Bangunan (HGB) – Right to build title   Hak Guna Bangunan permits the title owner to possess a building on land that is owned by another individual. Only Indonesian citizens and legal entities (PT. PMA) can have this property right. Hak Guna Bangunan is included in the freehold rights category.   The owner of Hak Guna Bangunan can use the building for commercial or residential purposes. However, additional requirements are needed when the title holders want to use the building for commercial purposes.   As we discussed earlier, Indonesian owners can upgrade their Hak Guna Bangunan ownership to freehold title by acquiring both the land and property above it and registering to BPN. Furthermore, when the freehold rights are acquired, the owner is entitled to inherit, sell, and lease the land and property.   Similar to freehold title, Hak Guna Bangunan title owners are also able to inherit or sell their HGB title and buy HGB title from someone else.   You can have Hak Guna Bangunan for 80 years – 30 years for the first contract, then you can extend the duration for 20 years for the first extension and 30 years for the next extension.     5. Hak Guna Usaha (HGU) – Right to cultivate title   Hak Guna Usaha only allows the utilization of land for agricultural, fisheries, or livestock purposes and the minimum land area is 5 hectares.   However, capital investment with a good company setting is needed if the land area is more than 25 hectares.   There’s a restriction for non-Indonesian individuals to obtain this property title. This property right is exclusively for Indonesian citizens and PT. PMA.   The contract duration for Hak Guna Usaha is 25 years – for companies that need a longer time, the duration is 35 years. If the contract expires, the extension is available for the next 25 years.     6. Hak Pengelolaan (SHPL) – Right to manage   Hak Pengelolaan is the most restrictive property right in Indonesia. This title is specifically designated for government agencies, state-owned enterprises (BUMN), regional-owned enterprises (BUMD), and government legal entities to manage the land.   The duration of Hak Pengelolaan can vary depending on the written agreement in the contract.   What are the authorities of Hak Pengelolaan holders? • Planning the use of the land.• Utilizing the land in order to carry the holder’s responsibilities.• Transferring parts of the land to the third party as per the requirements of Hak Pengelolaan holder – conditions related to the land designation, utilization, duration, and compensation with the allocation of the land rights to the third party by government legal entities based on the regulations.     7. Hak Milik atas Satuan Rumah Susun (HMSRS) – Strata title   HMSRS or Strata title allows the owner to own a unit in multi-story building.   HMSRS provides you an ownership only over the unit, not the land as well. The land ownership is under Hak Pakai title or Hak Guna Bangunan title.   If you’re a foreigner who wants to have strata title, you need KITAS or KITAP. You’re allowed to have only one unit in one residential building.   Please note that not all residential buildings in Indonesia have ‘strata title’ classification. You must ensure the building is eligible for you.   Also, there are limitations for foreigners who want to have HMSRS, including minimum unit price, land area, number of units, and unit utilization (for residential purposes only).   What about HMSRS duration? The contract duration depends on the land title where the units are built.   If the land title is HGB, the HMSRS duration will follow the HGB duration. For instance, if the HGB duration is 20 years, the HMSRS duration will be 20 years as well.   However, the HMSRS duration on land with Hak Pakai title is different. The maximum duration is 25 years with an extension option for another 25 years.   Additional information, the maximum area that foreigners can own within a multi-story building is 49% and the remaining units must be owned by Indonesian citizens.   If you’re interested in living in Indonesia, this title is good for you.     Property Rights in Indonesia You Can Have as a Foreigner   Here’s a quick recap of property rights you can have in Indonesia as a non-Indonesia individual, legal entity (PT. PMA), and Indonesian citizen.      Are You Ready to Own Property Rights in Indonesia?   The Indonesian government allows foreigners to access property rights in Indonesia in several ways. Typically, foreigners buy accessible rights through PT. PMA, as this way offers more property rights ownership compared to non-Indonesia individuals.   However, non-Indonesian individuals can still generate income in Indonesia through a property right like leasehold title. Regardless of your way to start acquiring property in Indonesia, collaborating with a trustworthy property agency is recommended to ensure a smooth property buying process.

We recognise that understanding the Indonesian tax systems is challenging for you – including the aspects related to properties. However, it’s vital to have a good understanding of property law. Let’s discuss property taxes in Indonesia and you’ll know that it's easier than you think!   Understanding Property Taxes in Indonesia Understanding property taxes in Indonesia is mandatory for everyone who are involved – including property owners, sellers, and buyers.   This property law isn’t applicable to Indonesians only, but also to foreigners. However, the regulations and tax rates are different between Indonesians and foreigners.   For instance, if you have a leasehold title for a property in Indonesia, you must pay the tax annually. These Indonesian tax systems can be complex. So, you need to be well-informed in order to prevent any potential punishments or penalties.   There are types of taxes applied in Indonesia that you should know. What are they?   Land and Building Tax (PBB) Land and building tax is an annual-basis property tax paid by everyone who owns property in Indonesia. This tax is named Pajak Bumi dan Bangunan (PBB) in Indonesian.   Land and building tax is the most fundamental tax among property taxes in Indonesia and is collected by the local government.    If you have a leasehold title for property in Indonesia, you’ll be charged by the landlord for this tax.   There are three factors that influence the land and building tax – PBB rate, NJOP, and NJKP.    What are the meanings of those terms? Let’s dive!   1. PBB Rate  This is a rate that refers to Undang-undang Hubungan Keuangan antara Pemerintah Pusat dan Daerah (UU HKPD). The maximum PBB rate is 0.5%.   Take note that 0.5% is a maximum rate. It means the PBB rate can different depending on the area. Every local government sets the PBB rate based on the local regulation that applies.   2. NJOP (Nilai Jual Objek Pajak) An average market value obtained from the previous real estate transaction. NJOP is set by the local government if there’s no real estate transaction recently.   NJOP value is influenced by several factors – location, population density, transportation facilities, and type of property. It means NJOP values are different depending on the area where your property is located.   The good news is, you can check the NJOP value in your property’s area – online and easily. For example, you can check for Bali area on the BAPENDA Bali Official Website or for Badung Regency area on the BAPENDA Badung Official Website.   3. NJKP (Nilai Jual Kena Pajak) NJKP is a value based on NJOP. The formula is:   If you’ve found the NJOP and then the NJKP value, now you can calculate the PBB. The formula is:   For easier understanding, let’s say you have a property with the NJOP value of Rp3,000,000,000 (3 billions rupiah) in Badung Regency. How much you must pay PBB tax annually?   The following are NJOP rates that apply in Badung Regency:●    NJOP rate if the property value is 1 billion rupiah or below in Badung Regency = 0.1%●    NJOP rate if the property value is more than 1 billion rupiah in Badung Regency = 0.2%   So, you must pay Rp2,390,400 annually for the PBB tax.   Please take note that PBB is an official assessment. It means the local government has the authority to assess your PBB tax tariff. You need to pay the tax annually. Land and Building Transfer Taxes Property buyers and sellers must pay specific property taxes in Indonesia. There are Sales Tax (PPh), Transfer Tax (BPHTB), and Value Added Tax (VAT).   1. Sales Tax (PPh) – paid by the seller Sales Tax or Pajak Penghasilan (PPh) is a tax that is paid by a seller when selling a freehold property. How to calculate the PPh?   The rate of PPh is 2.5% of the property value that is written in the Sales Deed or Akta Jual Beli.   2. Transfer Tax (BPHTB) - paid by the buyer Someone who buys property or land in Indonesia must pay a tax called Transfer Tax or Bea Pengalihan Hak atas Tanah dan Bangunan (BPHTB) in Indonesian.   The rate of BPHTB is 5% of Nilai Perolehan Objek Pajak (NPOP) reduced by Nilai Perolehan Objek Pajak Tidak Kena Pajak (NPOPTKP).    Based on that explanation, the formula of BPHTB is:   3. Value Added Tax (VAT) - paid by the buyer Value Added Tax is a tax paid when you buy or lease a property from a professional developer. This tax is also called Pajak Pertambahan Nilai (PPN). The rate of VAT is 11% of the property value.     Other Property Taxes in Indonesia Besides PBB or Land and Building Transfer Taxes, there are other kinds of Indonesian tax systems we can explore.    Especially, if you have a leasehold title and run a rental property business in Indonesia. This part is quite interesting and important for you.   1. Rental Income Tax Rental income tax is calculated from the gross income you earned from your rental business. This tax is also called Lease Tax.   So, how much do you pay for rental income tax?   Well, it depends on your residency in Indonesia. You just need to pay 10% of your rental income If you're subject to the resident tax of Indonesia. But, you must pay double (20%) if you’re a non-resident of Indonesia.   This means, knowing your rental income tax is crucial for considering your rental rates.   2. Construction Tax When individuals decide to develop a building on their land, they’re also obligated to pay a tax known as Construction Tax.    Construction tax tariff is influenced by two factors – tax rates and construction’s budget. The tax rates vary on the business qualification of the constructor.  In order to make you understand about construction tax easier, here are the tax rates based on PP Nomor 9 Tahun 2022 (Government Regulation) approved by the President of Indonesia: Here is the formula of construction tax:   3. Luxury Tax Luxury Tax, or known as Pajak Penjualan atas Barang Mewah (PPnBM), is a tax which applies to a property with at least 30 billions rupiah. This tax rate is 20% of the property value.   Key Takeaways Obeying the property law and taxes is crucial for you who has property in Indonesia. By knowing how property taxes in Indonesia work, it will help you to prevent unpleasant consequences.   Understanding property taxes in Indonesia isn’t as hard as it looks. More than preventing you from penalty, you also can set the best tax optimization strategy easier for your property business in Indonesia.