Indonesia and Bali: the visas, and what a foreigner may actually hold

Indonesia has spent recent years building formal long-stay routes to replace the informal arrangements that Bali ran on. Both the new routes and the old habits are worth understanding, because they interact.

The visas

• The Second Home visa, a long-stay permit based on a deposit in a state bank or on ownership of qualifying property, aimed at retirees and people of means.
• The Golden Visa framework, tiered by investment in government bonds, shares or the establishment of a company, with longer terms for larger commitments.
• Work and investor KITAS tied to a company — the ordinary route for anyone actually operating a business.
• The remote worker visa for people employed abroad.
• KITAP, permanent stay, after qualifying years on a KITAS in defined categories.

What a foreigner may hold

This is the part that decides everything, and it has not changed with the new visas.

• Hak Milik — full ownership — is not available to foreign individuals.
• Hak Pakai, a right of use, is available to foreigners resident in Indonesia, for a term with renewals.
• Hak Guna Bangunan, the right to build, is available to Indonesian legal entities including a PT PMA with foreign shareholding.
• Hak Sewa, a lease, which is a contract rather than a registered real right in the same sense and which shortens with every year of use.

The structures that do not survive scrutiny

Nominee arrangements — title held in an Indonesian individual's name under a side agreement — are widespread in Bali and are unenforceable. Indonesian law prohibits arrangements designed to circumvent the ownership restrictions, and courts have treated the side agreements as void. The foreign party in that structure holds nothing.

The consequence is not usually dramatic: it is that the property cannot be cleanly sold, mortgaged or inherited, and that a dispute with the nominee has no good outcome.

The instruction

Decide the holding structure before the price, and use one the law recognises: Hak Pakai in your own name if you are resident, or HGB through a PT PMA if the activity justifies a company. If a seller's answer to "what will the certificate say and whose name will be on it" is complicated, that complication is the product.