Investing in property in Bali requires careful legal assessment before signing any agreement. Foreign investors must understand the applicable land rights, ownership restrictions, contractual obligations, and potential legal risks.
Under Law No. 5 of 1960 on Basic Agrarian Principles, foreign nationals generally cannot hold Hak Milik (freehold ownership) over land in Indonesia. Depending on their legal status and investment objectives, eligible foreign investors may explore legally permitted rights, such as Hak Pakai (right of use), or appropriate investment structures, subject to applicable laws and regulations.
Before signing an agreement, investors should verify the land certificate, ownership status, zoning and permitted land use, existing encumbrances, building permits where required, and the legal authority of all contracting parties. The agreement should clearly specify payment terms, the rights and obligations of each party, dispute resolution procedures, and termination provisions.
Key Legal References:
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Law No. 5 of 1960 on Basic Agrarian Principles.
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Law No. 25 of 2007 on Investment, as amended.
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Government Regulation No. 18 of 2021 on Management Rights, Land Rights, Apartment Units, and Land Registration.
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Government Regulation No. 28 of 2025 on Risk-Based Business Licensing, where applicable.