Leasehold or freehold: what a foreigner can actually hold in Bali

The short answer

Freehold title (Hak Milik) is reserved for Indonesian citizens by the 1960 Agrarian Law. A foreign buyer has three workable routes: a long notarized lease (leasehold, the market default), the registered right to use called Hak Pakai if you actually live in Indonesia, and ownership through a foreign-owned Indonesian company, a PT PMA, holding a right-to-build title (HGB). The fourth option you will inevitably be offered, freehold written on a local friend’s name, is void under the same law.

Why freehold is off the table

Article 21 of the Agrarian Law (UUPA, Law 5 of 1960) limits Hak Milik to Indonesian citizens. Article 26(2) goes further: any transaction designed to move freehold to a foreigner, directly or through a scheme, is void by operation of law, the land falls to the State, and the article’s own wording bars you from reclaiming the money you paid. This is not a dusty technicality; Indonesian courts apply it, and in the decided cases the foreigner is the losing party.

Leasehold: the market default

A Bali leasehold is a long lease executed as a notarial deed, rooted in the Civil Code and the Agrarian Law’s right of lease (Hak Sewa). The landowner keeps the title; you get a contractual right to hold, live in and, if agreed, rent out the property for the term. The market norm is 25 to 30 years with extension options written into the deed. Nothing about the extension is automatic: it is worth exactly what your contract says, no more.

• The extension option with its price or price formula, in writing. "We will agree later" is the single most expensive phrase in Bali real estate.
• The right to assign the remaining term to a next buyer, and to sublet.
• What happens to the buildings when the term ends.
• Succession: the lease passing to your heirs without drama.

Two protections come from the Civil Code itself: a lease survives the death of the landowner (Article 1575) and survives a sale of the land (Article 1576), so heirs or a new owner inherit your contract, not a clean slate. The second protection can be waived inside the deed, which is one more reason the deed gets read line by line. And one thing leasehold never gives: a mortgage. Indonesian mortgage law attaches only to registered titles, so this market runs on cash.

Hak Pakai: a title in your own name, if you live here

Hak Pakai is the registered right to use, and it is the one land right a resident foreigner can hold personally: granted for up to 30 years, extendable by 20, then renewable for 30 more under Government Regulation 18 of 2021. It asks more of you: residency-grade immigration status (KITAS or KITAP), residential use, and a property above the ministry’s minimum price for foreigners, which for Bali is Rp 5 billion for a landed house and Rp 2 billion for an apartment. In return you get what leasehold lacks: a right registered at the land office in your own name.

PT PMA and HGB: when the villa is a business

A foreign-owned Indonesian company can hold a right-to-build title, HGB, on the same 30 plus 20 plus 30 structure. The requirements are real: an investment plan above Rp 10 billion per business line, paid-in capital of Rp 2.5 billion since October 2025 (BKPM Regulation 5 of 2025), licensing, accounting and annual investment reporting. It is the right shape when the property genuinely is a business, a rental operation or a portfolio. For one holiday home it is usually disproportionate, and we say so.

The nominee trap

The offer always sounds warm: an Indonesian friend holds the certificate, side agreements give you "control". Indonesian courts treat this as unlawful circumvention of Article 21 and void it; in the decided cases the certificate stays with the nominee or the land forfeits to the State, and the money is not recoverable. In February 2026 Bali’s provincial government went further and explicitly prohibited nominee land ownership by regional regulation, with sanctions reaching criminal liability for participants and facilitators.

We do not work with nominee arrangements, full stop. If a deal only works "on a friend’s name", it does not work.

What changed by 2026

The 2020 Job Creation Law and Government Regulation 18 of 2021 set the current term structures and let foreigners own strata apartments on HGB land. BKPM Regulation 5 of 2025 lowered the paid-in capital for a PT PMA. Bali’s 2026 regional regulation criminalized nominee schemes. The direction of travel is consistent: the legal routes keep getting clearer, and the workarounds keep getting riskier.