Foreign nationals cannot directly own freehold land (Hak Milik) in Indonesia, but a correctly structured PT PMA can hold Hak Guna Bangunan (HGB) — a 30-year building right renewable for 20+30 additional years — on residential or commercial land, including villa and hospitality properties in Bali. This is the primary legal mechanism used by foreign investors to operate income-producing property in Indonesia.

How PT PMA Enables Foreign Villa Ownership

Under PP 18/2021 and the Omnibus Law framework, a PT PMA with an appropriate KBLI code (e.g., 55110 for hotel/resort, 68100 for real estate own-account) can hold HGB title on land that the foreign shareholder occupies or leases out commercially. The PT PMA structure is particularly suited for:

• Villa rental businesses (minimum capital applies per activity)
• Boutique hotels and guesthouses
• Commercial real estate development projects
• Long-term lease and management structures

Critical Steps for Property-Purpose PT PMA

1. Select the correct KBLI code for your property use — a mismatch between the declared activity and actual use creates compliance risk.
2. Declare sufficient investment capital — IDR 10 billion minimum per activity line under BKPM rules; confirm current threshold before proceeding.
3. Notarial deed and AHU registration — PT PMA must be notarially established and registered with the Ministry of Law and Human Rights.
4. OSS-issued NIB and business licence — Online Single Submission (OSS) platform issues the Nomor Induk Berusaha and activity-specific licences.
5. Certificate of Building Ownership (SHM atas nama PT) — Once the PT PMA is active, land/building title can be transferred or acquired in the company name under HGB.
6. Investor KITAS — If you wish to reside in Bali as a shareholder, the Investor KITAS must be applied for separately through immigration.

Key Considerations

Foreigners must retain a qualified local notary and legal advisor for all property title transfers. Nominee structures (using an Indonesian national as a proxy owner without true beneficial interest) are illegal under Indonesian law and carry significant risk. A legitimate PT PMA structure provides transparent, auditable foreign ownership that is accepted by Indonesian banks and government offices.

Tax obligations including PPN (11% VAT on sales), PPh rental income tax, and LKPM quarterly reporting apply to PT PMA property businesses. We advise clients on these obligations before incorporation to avoid surprises.

Contact us to assess whether a PT PMA is the right structure for your intended property investment in Bali. We review your specific situation — property type, intended use, nationality, and investment amount — before recommending the appropriate setup path.