We often receive questions about land and property ownership in Bali for Real Estate. For instance, what is the exact difference between Leasehold and Freehold? And can you, as an international investor, actually own land? The short answer is that securing land is only possible through a Leasehold or HGB structure. In this article, we explain exactly how this works.
How does land ownership work on Bali?
Many people are aware that as a foreigner, you cannot register Freehold land in your own name. However, this doesn’t mean there aren’t excellent alternatives. In fact, there are two highly secure ways to invest: Leasehold (long-term lease) and HGB (corporate ownership rights via a PMA). In this article, we compare the legal facts, the risks, and the impact on your ROI.
Leasehold: The most common structure for investing on Bali
Leasehold is essentially a long-term lease agreement where you purchase the right to use the land and the property for a fixed period, usually 25 or 30 years.
- For whom? Ideal for investors focused on cash flow (ROI). Because the initial purchase price is lower than with Freehold/HGB, you will recoup your investment much faster.
- Extension: A solid contract will immediately include an option to extend (e.g., +20 years). The price for this extension is either fixed in advance or determined based on the market value at that time. At the end of the contract (and its extensions), the land reverts to the landowner, unless you successfully renegotiate.
HGB via a PMA: The alternative to leasehold land on Bali
If you still want to be the “owner” and have full control without relying on a local nominee, establishing a PT PMA (Foreign Owned Company) is the only secure route. In practice, a combination of Leasehold and a PT PMA is frequently used, as the HGB title (Right to Build) can be more complex to obtain.
- Validity: An HGB title is initially valid for 30 years, can be extended for 20 years, and renewed for another 30 years (totaling 80 years). In practice, this is an ongoing process as long as the company remains active.
- Hak Guna Bangunan (HGB): Your company (PMA) acquires the “Right to Build”. You are the 100% owner of the company, and the company legally owns the property.
- Security: The HGB title is registered in your company’s name at the land registry. It is tradable, mortgageable, and transferable to other foreign buyers (via a transfer of shares).
What is the best choice for your property?
Are you looking to buy a house in Bali? In 2026, the Bali market is shifting increasingly towards PMA structures for secure ownership, and Leasehold for higher yields and certainties. This is the most common and future-proof setup. Under no circumstances is it advisable to use a Freehold structure with a local nominee (owner). Always ensure you are well-informed by local law firms and notaries.
Want to know which structure best suits your budget and goals? Schedule a free strategy call or read more in our E-book.
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- The exact steps to secure 100% ownership via a PMA.
- How to smartly navigate local and international property taxes.
- The 5 most common legal mistakes made by foreign investors.
Disclaimer: This article contains general information and does not constitute financial or tax advice. Returns on investment may fluctuate. Always consult with a qualified professional before making any investment decisions.
