If you are considering investing in property in Bali, it is important to understand the difference between leasehold and freehold. These two forms of ownership offer different advantages and limitations, especially for foreign investors. Below, we explain both options so you can make the right choice based on your investment goals.
Leasehold is the most accessible option for foreigners. With this, you lease the land for a set period, usually 25 years, with the option to extend the lease. You have the right to use and rent the property, but you do not fully own the land.
With freehold, you own the land outright, but this is only possible for foreigners through an Indonesian company, such as a PMA (Penanaman Modal Asing) or PT (Perseroan Terbatas). Through these company structures, you can indirectly own property, but setting up and maintaining such a business comes with more administrative burdens and costs.
The main difference between leasehold and freehold is the level of ownership and control you have. Leasehold is an affordable and accessible option for foreigners looking to invest for a longer term without the need to set up a company. Freehold, via a PMA or PT, offers full control over the land and is ideal for long-term investments but comes with more costs and obligations. Depending on your investment goals and financial situation, one of these options may be a better fit for you.
