Frequently Asked Questions

How to buy Lombok and Bali property

If you're thinking of purchasing a particular piece of Bali property or Lombok real estate, congratulations. You couldn't have picked a more beautiful location in which to live. Although non-natives may find some things about buying Indonesia real estate to be different from what they are used to, that should not stop them from acquiring the Bali real estate of their dreams. This FAQ will show you how easy it can be.

Question 1. How can I purchase a Lombok villa on sale or own any sort of Lombok property if it's not possible to hold the title?

For the non-native individual who discovers an attractive piece of Lombok property or happens upon a Lombok villa for sale, there are three options: collaborate with a nominee, enter into a leasehold transaction or purchase the property in the name of a Penanaman Modal Asing, or PMA.

Question 2. What is a nominee?

The nominee can be a native Indonesian individual or a limited-liability Perseroan Terbatas company. Either of these entities can hold title to the property under a legal agreement and subsequently sign over full rights to the purchaser through a power of attorney.

Question 3. What are the purchaser's rights when partnering with a nominee?

Once a nominee has transferred title of the Bali real estate or Lombok real estate to the purchaser through power of attorney, the owner will gain beneficial rights to the land that allow him to build on it, lease it, sell it or transfer it to a relative. This holds true for all Indonesia real estate. 

Question 4. What is a leasehold transaction?

A leasehold is a means by which the investor can lease a piece of Indonesia real estate for up to 25 years. No partnership will be necessary to do this. The lessee never actually owns the property, and when the lease is up, control will pass back to the lessor.

Question 5. What is a Pananaman Modal Asing?

A PMA is the Indonesian term for a company that is fully owned by a non-native investor. Under the terms of the Indonesian Foreign Investment Programme, such a company can purchase and hold title to a piece of Indonesia property for 20 to 30 years. At the end of that time, if the company wishes to retain control of the real estate, it must apply to the government for an extension of the license.

Question 6. Is a partner necessary for setting up a PMA?

No. Under Indonesian law, a foreigner hoping to purchase Bali property can set up a PMA on his own. 

Question 7. What are the steps to take in setting up a PMA?

The buyer who hopes to purchase Indonesia property by setting up a PMA will need to: 
- Submit a business plan.
- Demonstrate that the business will create jobs, bring in foreign skills and benefit the environment. 
- Deposit an appropriate amount of cash in an Indonesian bank.
- Declare the Bali real estate or Lombok property in question as a company asset.

Question 8. How long does it take to set up a PMA?

Setting up a PMA will take between three and four months.

Question 9. What is a Pipil?

The Pipil is a piece of land that over the years has passed from one generation to another without benefit of registration. Before selling this property, its owners will need to obtain a certificate from the Indonesian Land Office. While the conversion of a Pipil can take three or four months, a sale should be possible within one to 12 days after that.

Question 10. If I should come across an attractive Bali villa on sale or locate any piece of Bali property that I'd like to purchase, what is my next step?

When you've stumbled upon a Bali villa for sale and would like to make a purchase, a qualified Indonesian real estate agent will help you follow through. Purchasing property in Indonesia will be quite different from anything you've done before, and you'll need the help of someone who is thoroughly familiar with Indonesian realty law. With a knowledgeable agent at your side, you could find yourself in the home of your dreams before you know it.

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