Property Ownership in Bali: 7 Steps for Foreign Investors

7 Steps to Property Ownership in Bali for Foreign Investors

  • InCorp Editorial Team
  • 20 July 2023
  • 3 minute reading time

Property ownership in Bali is a lucrative venture that has been steadily attracting an increasing number of foreign investors. If you find yourself among those interested in acquiring a beautiful house in Bali, understanding the process of property ownership on this enchanting island is crucial.

Steps to Acquire Property in Bali:

This article provides a step-by-step guide to help first-time homeowners and rookie investors confidently navigate the property market.

1. Initiate the Purchase Process

To kickstart your journey toward property ownership in Bali, the first step is to sign and submit an Offer-to-Purchase Document. This formal document notifies the seller or agent of your intention to make an offer and proceed with the property acquisition.

2. Engage a Notary

As a foreign buyer, you can select a notary of your choice. Notary fees typically range from 1% to 2.5% of the property’s selling price. The chosen notary will prepare the purchase and sale agreement in Indonesian and English, ensuring the Indonesian version holds legal validity.

3. Secure the Purchase with a Deposit 

Upon agreeing to the terms, making a deposit ranging from 10% to 25% of the property’s selling price is customary. It is essential to deposit this amount into the notary’s escrow account rather than directly with the seller to ensure the property is secured and removed from the market.

4. Sign Legal Agreements 

All parties involved in the property acquisition, including the buyer, seller, and notary, will sign several crucial legal agreements. These include a preliminary agreement, a purchase-and-sale agreement, and a leasehold right agreement. Engaging a legal consultant to ensure that the agreed-upon terms are accurately reflected in these agreements is advisable.

5. Conduct Due Diligence 

Before finalizing the transaction, it is imperative to conduct thorough due diligence on the property with the assistance of a legal expert. This ensures that all terms and conditions stipulated in the agreement are met and executed as agreed.

6. Formalize the Transaction 

The property acquisition process culminates with the formalization of the transaction through a leasehold deed or sale-and-purchase deed involving all parties. The notary will retain the deeds and land certificates in escrow until the buyer has fulfilled all the agreed terms and conditions.

7. Transfer of Property Ownership

Upon receiving full payment from the buyer and settling all relevant taxes, the seller will transfer the property title to the buyer, completing the ownership transfer. Subsequently, the notary will release the deeds to all parties involved.

How InCorp Indonesia Can Assist

InCorp Indonesia is a reputable business and legal consulting firm offering expert assistance and legal advice for property acquisition in Bali. Our expertise and client-centric approach have earned us a strong reputation. 

In addition to property legal consultancy, we provide a wide range of services, including company registration, licensing, visa applications, and more. Rest assured that InCorp Indonesia will safeguard your property investment in Bali. 

Our knowledgeable team is available to support you with property purchase and sale, drafting legal agreements, resolving contract disputes, and establishing your real estate and property business. Contact us today for more information on Bali property ownership by foreigners by filling out the form below.

David Susandi

Branch Manager – Bali Office at InCorp Indonesia

Holding 11 years of experience in various roles, including project manager, operational manager, and corporate strategist, David Susandi is a prominent figure for many entrepreneurial organizations expanding in Indonesia.

Get in touch with us.

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Frequent Asked Questions

When a foreigner or their heir move to another country and have not stayed in Indonesia within one year, they must relinquish or transfer ownership rights to someone that meets Indonesian land or property ownership requirements in Indonesia.

It should take between 30 to 45 days.

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.