Are There Any Restrictions for Foreigners Looking to Invest in Bali Real Estate?

Yes, there are restrictions for foreigners looking to invest in Bali real estate. The Indonesian government imposes certain limitations on foreign ownership of property in Bali and throughout the country. Here are some key points to consider:

Ownership Rights: Foreigners are generally prohibited from owning freehold (or 'Hak Milik') property in Indonesia, including Bali. Freehold ownership is typically reserved for Indonesian citizens and certain entities, such as Indonesian companies.

Leasehold Ownership: Foreigners can acquire leasehold (or 'Hak Pakai') property in Bali, which grants the right to use and occupy the land for a predetermined period, usually up to 25 or 30 years. Leasehold arrangements may be renewable, but terms and conditions vary.

Foreign Ownership Restrictio Indonesian law limits the size of land that foreigners can leasehold, typically up to 1,000 square meters. Additionally, regulations may restrict foreign ownership in certain areas deemed strategic or sensitive, such as near borders, coastlines, or cultural sites.

Investment Vehicles: Foreigners may also invest in Bali real estate through other legal entities, such as Indonesian companies (PT PMA) or partnerships. These entities may be subject to specific regulations and restrictions, and professional advice is recommended when considering this option.

Government Approval: Foreigners seeking to acquire property in Bali must obtain approval from the Indonesian government, typically through the Investment Coordinating Board (BKPM) or the Land Office (Kantor Pertanahan). The approval process involves submitting necessary documentation and complying with legal requirements.

Tax Obligations: Foreign property owners in Bali are subject to various taxes, including property tax (Pajak Bumi dan Bangunan), income tax on rental income, and capital gains tax on property sales. Understanding and fulfilling tax obligations is essential for foreign investors to avoid penalties or legal issues.

Legal Compliance: Foreign investors must adhere to Indonesian laws and regulations governing property ownership, land use, zoning, and environmental protection. Non-compliance with legal requirements can result in fines, penalties, or even forfeiture of property rights.