06 October 2026
Can a foreign investor buy land in Bali? Can a PT PMA own land in Indonesia? And what exactly is HGB?
These are some of the most common questions we hear from foreign investors looking to buy or develop property in Bali.
The answer is yes, foreign investment in Indonesian property is possible — but the legal structure matters.
One important distinction is that a PT PMA cannot hold land under Hak Milik (Freehold Title). However, Indonesian law allows qualifying legal entities established under Indonesian law to hold certain land rights, including Hak Guna Bangunan (HGB).
For investors planning to develop a villa, accommodation business, or other property project in Bali, understanding how HGB works is an important part of making an informed decision.
So, let’s look at it in simple terms.
The short answer is:
A PT PMA cannot hold Hak Milik (Freehold Title) in its own name.
Hak Milik is the strongest form of land ownership under Indonesian land law and is generally associated with Indonesian citizens.
A PT PMA, however, can hold other forms of land rights permitted by Indonesian law.
One of the most relevant for property development is Hak Guna Bangunan, or HGB.
Under Government Regulation No. 18 of 2021, HGB can be granted over State Land, land under Hak Pengelolaan (HPL), and, under a different legal mechanism, Hak Milik. The HGB must be registered with the relevant Land Office (BPN). (Peraturan BPK)
This distinction is important because buying property in Bali through a PT PMA is not simply a matter of transferring an Indonesian Freehold Certificate into a foreign-owned company’s name.
The transaction needs to be structured according to the land rights available under Indonesian law.
HGB stands for Hak Guna Bangunan, or Right to Build.
In simple terms, HGB gives its holder the legal right to build and use a property on land for a defined period, subject to the terms and conditions of the right.
For a foreign investor using a PT PMA, HGB can provide a formal and registered legal structure for developing and operating property in Indonesia.
The HGB is registered with the Land Office, and the holder receives an HGB land certificate as evidence of the right. (Peraturan BPK)
Think of the difference this way:
Hak Milik
Ownership of the land itself.
HGB
A registered right to build and use the land for a specific period.
That distinction is at the heart of understanding foreign property ownership in Bali.
This is where things can become confusing for foreign buyers.
Imagine that you find a beautiful piece of land in Ubud.
The existing certificate is Hak Milik, registered in the name of an Indonesian individual.
You want to develop the land through your PT PMA.
You cannot simply change the name on the Hak Milik certificate from the Indonesian owner to your PT PMA.
One possible legal structure is to first release the existing Hak Milik right, allowing the land to become Tanah Negara (State Land), and then have the PT PMA apply for HGB over the land, subject to the applicable requirements and approval.
In simplified form:
Hak Milik
↓
Release of Rights
↓
State Land
↓
HGB Application
↓
HGB Registered to PT PMA
The process needs to be handled through the appropriate legal and land-administration procedures, normally with the involvement of a qualified Notary / PPAT and the relevant Land Office.
It is important to note that this is one possible legal structure. Indonesian land law also recognises HGB over Hak Milik through a different mechanism, so the correct structure should always be determined based on the specific property and transaction. (Peraturan BPK)
This is probably one of the first questions a foreign investor will ask:
“If I invest in HGB, how long can I use the property?”
Under Article 37 of Government Regulation No. 18 of 2021, HGB over State Land or HPL can be granted for:
* Up to 30 years initially
* Up to 20 years for an extension
* Up to 30 years upon renewal
This creates a potential total period of up to 80 years. However, it is important to understand that this does not mean an investor automatically receives an 80-year right from the beginning.
The structure is:
30 years + 20 years + 30 years
Any extension or renewal remains subject to the applicable legal requirements and conditions. For example, the land must continue to be used and utilised appropriately and other requirements must be satisfied. (Peraturan BPK)
So when discussing an “80-year HGB structure”, it is more accurate to think of it as a potential maximum period under the applicable framework, rather than an automatic 80-year guarantee.
Having a PT PMA is only one part of the process.
The company, the land and the proposed project all need to fit together legally.
Depending on the property and intended use, important matters may include:
A. A properly established PT PMA
The company needs to be legally established and registered in Indonesia.
Its business activities should also be appropriate for the intended use of the property.
For example, depending on the project, the relevant KBLI may relate to real estate, accommodation, villa management or another permitted business activity.
B. NIB and business registration
The company should have the required NIB (Business Identification Number) and business registrations.
C. Spatial planning
The intended use of the land needs to be compatible with the applicable spatial planning regulations.
For a project in Gianyar, for example, zoning and spatial planning should be checked before committing to the property.
Depending on the project, this may involve PKKPR / spatial-use conformity and other technical requirements.
D. Proper land documentation
The transaction should be prepared with the appropriate legal documentation and handled by the appointed Notary / PPAT.
The exact documents and sequence can vary depending on the land title, location, intended use and transaction structure.
This is why proper due diligence should happen before a buyer makes a final commitment.
Finding the right location is important.
But finding land that is legally suitable for your intended investment is even more important.
Before buying land in Bali, a proper due diligence process may include checking:
Land Certificate
Is the certificate valid, registered and consistent with the seller’s ownership?
Ownership
Who legally owns the land, and are there any other parties with rights or interests in it?
Land Boundaries
Do the physical boundaries match the registered land documents?
Access
Does the property have proper legal and practical access?
Zoning
Can the land legally be used for the project you have in mind?
Existing Encumbrances
Are there mortgages, disputes, liens or other registered interests affecting the land?
Existing Buildings
If there is already a building, what is its legal status?
Building Approvals
Depending on the property, this may include checking PBG (Building Approval) and SLF (Certificate of Functional Worthiness).
Business Use
Can the proposed business activity legally operate at that location?
This is why we always encourage investors to look beyond the question:
“Is this a beautiful piece of land?”
And ask the more important question:
“Is this land legally suitable for what I want to build and operate?”
Let’s say you are a foreign investor and you want to develop a villa project in Ubud through your PT PMA.
You find a property with an existing Hak Milik certificate.
A simplified example of the process may look like this:
1. Find the property
You identify the land and agree on the commercial terms with the owner.
2. Conduct due diligence
The certificate, ownership, boundaries, access, zoning and other relevant matters are checked.
3. Structure the transaction
Your Notary / PPAT determines the appropriate legal structure based on the specific land and your investment plan.
4. Release of Hak Milik, where applicable
If the chosen structure involves release of the existing Hak Milik, the necessary documentation is completed and the land is processed accordingly.
5. HGB application
The PT PMA applies for the relevant HGB through the Land Office process.
6. HGB registration
Once approved and registered, the HGB is recorded in the name of the PT PMA.
7. Development
The company can then proceed with the relevant development and building approvals required for the project.
The actual process can vary.
That is why there is no “one-size-fits-all” formula for buying land in Bali.
Land is only one part of a property transaction.
If the property already has a villa or another building, the building itself should also be reviewed.
For example, investors may need to check:
* Building approval and documentation
* PBG
* SLF
* Building use
* Tax obligations
* Ownership and legal status of the building
* Compliance with the approved use of the land
A property can have a valid land certificate and still require additional checks before it is suitable for a particular investment project.
This is another reason why land due diligence and property due diligence should go hand in hand.
Buying property in Bali can be exciting.
It is easy to fall in love with the view, location, rice fields or tropical surroundings.
But before falling in love with the property, take a closer look at the legal structure.
Here are a few common mistakes worth avoiding.
“The seller says it is safe.”
A seller’s assurance is not a substitute for independent legal due diligence.
“The land is Hak Milik, so it must be better.”
Not necessarily for every investment structure.
For a PT PMA, the relevant question is whether the land can be legally structured for the company’s intended use.
“The HGB is 80 years.”
Be careful with this wording.
The legal framework provides a structure of up to 30 years, followed by a possible 20-year extension and a possible 30-year renewal, subject to the applicable requirements.
“We can sort out the permits later.”
This can create unnecessary risk.
Zoning, land use and building requirements should be considered before committing to the investment.
“The location is perfect, so let’s secure it first.”
Location matters.
But legal suitability should come before emotional commitment.
This is one of the most useful concepts for foreign investors to understand.
When a PT PMA holds HGB, the company does not hold Hak Milik over the land.
Instead, it holds a registered land right that allows it to build and use the land within the terms and period of the HGB.
So rather than thinking:
“A foreign company is buying Indonesian freehold land.”
It is more accurate to think:
“The PT PMA is acquiring a legally recognised land right that allows the company to develop and use the land under Indonesian law.”
That distinction makes the whole structure much easier to understand.
Buying land in Bali as a foreign investor is possible, but the legal structure is very different from buying Hak Milik as an Indonesian individual.
For a PT PMA, HGB is one of the important legal structures available for property development and investment, subject to the applicable requirements.
The process may involve:
Land due diligence → Company structure → Zoning and spatial planning → Notary / PPAT → Land-right process → BPN registration → Building approvals → Development
And perhaps the most important lesson is this:
Don’t only ask, “Can I buy this land?”
Ask:
“Can this land legally support the investment I want to make?”
That question can save a great deal of time, money and uncertainty later.
At Ubud Property, we believe that a good property investment starts with good information.
Whether you are looking for land in Ubud, planning a villa development, or exploring property investment in Bali through a PT PMA, understanding the legal structure is an important first step.
Can a foreigner own land in Bali?
Foreign individuals cannot generally hold Hak Milik land in Indonesia. Foreign investment structures may use other forms of land rights permitted under Indonesian law, depending on the investor, property and intended use.
Can a PT PMA hold Hak Milik?
No. A PT PMA cannot hold Hak Milik in its own name. A PT PMA may hold other land rights permitted under Indonesian law, including HGB where the relevant requirements are satisfied.
What is HGB in Bali?
HGB, or Hak Guna Bangunan, is a registered right to build and use land for a defined period. It is one of the key land-right structures relevant to property development by qualifying legal entities in Indonesia.
How long does HGB last?
For HGB over State Land or HPL, the framework under PP No. 18/2021 provides for up to 30 years initially, an extension of up to 20 years and renewal of up to 30 years, subject to the applicable requirements. (Peraturan BPK)
Can a PT PMA buy land in Bali?
A PT PMA cannot simply acquire Hak Milik. However, it may acquire or obtain other legally permitted land rights, including HGB, depending on the land and the proposed investment structure.
Should I check the zoning before buying land in Bali?
Absolutely. Land ownership and land-use suitability are two different questions. Zoning and spatial planning should be checked against the intended project before committing to a property.
Do I need a Notary / PPAT?
Land-right transactions in Indonesia involve formal legal and registration processes. A qualified Notary / PPAT should be involved to structure and document the transaction appropriately.
The main regulatory reference discussed in this article is Government Regulation No. 18 of 2021 (PP No. 18/2021) on Management Rights, Land Rights, Strata Titles and Land Registration, which is currently listed as in force by both the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) and the Indonesian Legal Information Database (BPK). (JDIH ATR/BPN)
The procedures for determination of management and land rights are also addressed in Minister of ATR/BPN Regulation No. 18 of 2021, subject to subsequent regulatory changes affecting particular provisions. (JDIH ATR/BPN)
This article is provided for general educational purposes and is not intended to replace legal, tax or professional advice.
Land regulations, licensing requirements and administrative procedures can depend on the specific property, location, land status, company structure and intended use.
Before entering into a property transaction, buyers should conduct proper due diligence and obtain independent advice from a qualified Indonesian Notary / PPAT and relevant professional advisers.