Your Bali Property Blogspot

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.

Acquiring property rights in Bali is quite complex. There are a few property regulations and procedures that we will explain here in order to help you understand how to buy property in Bali.    Let’s go through it with you step by step.   Property Rights Foreigners Can Have or Own in Bali When you’ve decided to purchase a property in Bali, it’s crucial to know and understand what property rights/titles you’re able to obtain in Bali as a foreigner. Knowing this regulation helps you to make property-buying process easier.   When foreigners want to start their property investment journey in Bali, a question like “How to buy property in Bali?” often comes up.   First thing, please note that not all property titles in Indonesia are available to foreigners.    Here are the property titles that foreigners can look for, whether for non-Indonesian individuals or PT. PMA company set-ups:   1. Non-Indonesian Individuals •    Leasehold title – Hak Sewa Bangunan (HSB)•    Hak Pakai (HP)•    Hak Milik atas Satuan Rumah Susun (HMSRS)   2. PT. PMA •    Hak Pakai (HP)•    Hak Guna Bangunan (HGB)•    Leasehold title – Hak Sewa Bangunan (HSB)•    Hak Guna Usaha (HGU)•    Hak Milik atas Satuan Rumah Susun (HMSRS)   Buying property rights through a foreign-owned company (PT. PMA) grants you more rights to property for foreigners and generally seen as a much more concrete option.    However, whether you buy as an individual or through PT. PMA, just to make sure you follow these steps below in order to make your buying property process as smooth as butter.   How to Buy Property in Bali? (Step by step) No matter which property rights you choose to own, here are the steps on how to buy property in Bali:   1. Property Law in Bali The first step in the property-buying process is comprehending how to buy property in Bali by understanding the property law that applies.   It’s helpful for you to know what property titles you can buy in the Land of Gods. As a part of Indonesia, the regulations in Bali refer to Agrarian Law (Hukum Agraria).   According to the Agrarian Law, foreigners can safely and lawfully buy certain property titles in Bali. Finding out the property regulations is the first advisable step for you in order to know the next steps you should take.   2. Establish Your PT. PMA (Optional step) If you want to buy a property in Bali as a non-Indonesian foreigner that doesn’t require a PT. PMA, you can skip this step and go to step 3.   However, if you want broader options for property rights or if the property rights you seek necessitate PT. PMA, establishing a valid PT. PMA can be a good decision for you.   You have an option to establish your PT. PMA through a reputable government institution that is responsible for this setup. The institution is the Indonesian Investment Coordinating Board (BKPM). Alternatively, you can seek help through an agency to facilitate the PT. PMA set up process.   3. Find a Dream Property to Buy After you understand the property regulations, the next step is finding a dream property in your desired location. Here, you’ll do research on properties available in Bali – location, price, amenities, and size.   Best to already know what it is you looking for as Bali has a wide and abundant variety of properties available.   You can choose the property that’s most suitable for your:   •    Your “why” of having a property in Bali. Is your “why” driven by lifestyle, investment goals, or residential purposes in Bali? •    What type of property do you want? Whether it’s land, villa, or apartment developments.   After you have your answers, then you can learn how to buy property in Bali and choose the property you want.   Sometimes, doing research can be time-consuming. The easiest way for this step is to collaborate with a trustworthy property agency in Bali. There, you can access property listings effortlessly.   4. Complete the Property Due Diligence Report Completing the Property Due Diligence Report is necessary after you decide which property you want to have.   A appointed notary will be responsible to ensure that all the paperwork that’s provided are valid and that there are no incumbrances when it comes to transferring the rights or lease to the new owners.   We can say, this is the most vital step for you to do.   This process assures that you are safe, and that there are very little risk involved, also any and all property scams.   Working with a trustworthy and reputable property agency in Bali is vital. They can streamline the process and make sure all the necessary documentation is in place upon signing a Letter of Intent, Offer to Purchase or MOU.   The agency will have these documents on hand in order to make the process a little easier, so this is where a professional real estate company’s assistance makes a big difference.   After the request is completed and all the documents are provided, you can negotiate regarding the contract duration and price.   Here, you can use professional assistance from a property agency to make the process smooth.   5. Sign and Offer Agreement/MOU and Transfer a Down Payment After you’ve negotiated the terms and conditions on the property, land, and a valid offer, MOU or letter of intent has been signed by all parties.   A general rule of thumb will be that a 10% deposit is paid to your chosen notary bank account to hold the property while the due diligence is being completed.   Your next step is waiting for the due diligence “clear” report from your notary. The next step is signing the Sales Purchase Agreement – a legal document that attaches your and the landlord’s responsibilities in the property transaction.   The Sales Purchase Agreement requires the signatures both from you (buyer) and the property owner (seller), in the presence of an authorized public notary for the area (PPAT).   6. Pay the Remaining Payment After the certificate is acquired and verified by PPAT, you can finalize the payment and sign the Deed (sales and purchases agreement). The signing process must be done with the presence of a public notary.   7. Sign the Transfer Leases or Deed Transfer The property-buying process is almost done! This is the final step in understanding how to buy property in Bali.   In this step, you’ll sign the transfer leases (for leasehold rights) or the deed transfer will take place from the previous titles owner (for Hak Milik, HGB, and Hak Pakai).   After that, you’re officially obtain the property rights on your title.   We Make the Process Simple for You! Owning a slice of paradise is a simple and effortless if you understand on how to buy property in Bali. Additionally, work with the right agency to help streamline the entire experience.   Let us help you make the best and most informed decisions, run through the process and help you with your Bali property dreams.   Contact us for more information!

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.