Frequently Asked Questions

The primary title for foreign investors to control land is Hak Guna Bangunan (HGB), or Right to Build, typically granted for 30 years and renewable. For direct ownership, foreigners are limited to Hak Pakai (HP), or Right to Use, a personal, renewable lease. Commercial investments often require a PT PMA.

Source: Law No. 5 of 1960 (Basic Agrarian Law) and subsequent regulations, such as Government Regulation No. 18 of 2021.

For substantial commercial real estate investment and to obtain the strongest property rights (like HGB and most business permits), yes, it is necessary to establish a local Foreign-Owned Company (PT PMA) (Penanaman Modal Asing). 

Source: Indonesia’s Investment Coordinating Board (BKPM) regulations related to foreign direct investment.

You must check the official RTRW (Rencana Tata Ruang Wilayah), the Regional Spatial Plan, at the local government level. Land must be zoned for commercial/tourism (ITR/Kuning or ITR/Pariwisata) to run a legal rental business. 

Source: Ministry of Agrarian Affairs and Spatial Planning / National Land Agency (BPN) and the respective Provincial/Regency Government of Bali’s Planning Department. 

Rental income from a foreign-owned property is generally subject to a final income tax (PPh Final) rate of 10% of the gross rental value, which is considered a final tax obligation for the year. 

Source: Indonesian Directorate General of Taxation (DGT) (Direktorat Jenderal Pajak) regulations, such as Government Regulation No. 55 of 2022. 

The Land and Building Acquisition Fee (Bea Perolehan Hak atas Tanah dan Bangunan or BPHTB) is generally 5% of the transaction value that exceeds the Non-Taxable Value (NPOPTKP). This is paid by the buyer. 

Source: Local Regional Regulation (Perda) for the relevant regency/city (e.g., Badung or Denpasar), based on authority granted by the DGT. 

A proper business license (NIB) through the OSS (Online Single Submission) system, and specific permits such as an IMB/PBG (Building Approval) reflecting its commercial/tourism-use status are mandatory. 

Source: Indonesia’s Ministry of Investment / BKPM’s Online Single Submission (OSS) system and Ministry of Public Works and Housing (PUPR) regulations. 

The most critical step is a thorough Title Search and Land Certificate Verification at the BPN (Badan Pertanahan Nasional) to ensure the land certificate is original, valid, free from encumbrances, and registered correctly. 

Source: National Land Agency (BPN) (Badan Pertanahan Nasional) official procedures. 

Yes, the Rupiah is a convertible currency. Repatriation of capital and profits is generally permitted after fulfilling all tax obligations and adhering to foreign exchange transaction reporting laws.

Source: Bank Indonesia (BI) regulations on foreign exchange transactions (Peraturan Bank Indonesia).