Investing in Bali, good step or?

it was the brother!

Even a small investment here will give you a nice return down the road. Here is a list of the titles we, as foreigners can obtain.

Hak Milik – freehold title that can be bought, sold, mortgaged and inherited and is only available for Indonesia nationals and Indonesian corporations. International corporations cannot hold a freehold title.

Hak Guna Bagunan – the right to construct a building on a plot of land by a corporation (both domestic and foreign) or individual for a period of 20-30 years that is subject to renewal by applying to the National Land Agency. The purpose of the purchase must be executed in order for the land title to be secured in that the land may not be left idle.

Hak Sewa Bagunan – the right to rent land for building purposes by a determined amount of time by the two parties. This is an informal agreement in that it is not certified or registered with the land authorities and the legal protection of those engaging in it is therefore unclear. It can be held by a foreigner that is residing in Indonesia or the Indonesian branch of a foreign company. The agreed use of the land must be maintained throughout the lease period.

Hak Pakai – the right to use land for a specific and pre agreed purpose for a defined amount of time. This can be held by an Indonesian national, foreigners domiciled in Indonesia, foreign investment companies (PMA) and representative offices.

Hak Guna Usaha – the right of exploitation, applicable for state owned land to be used for agricultural and aquaculture purposes for a period of up to 35 years with a 25 year extension by applying to the National Land Agency. The land must be used for the purpose that it was leased for and may not be left idle.

Strata Title – the deed or right of use of an apartment can be purchased by a foreigner who resides in or has a regular ‘presence’ in Indonesia, as it is considered to be vertical space as opposed to land.

In my opinion the hak pakai is the the best and most reliable. However, having an Indonesian spouse( and with a pre-nuptial) agreement, the spouse can buy land and property in their name.

The other way is by getting an Indonesian nominee to take all land and property in their name( this is risky for obvious reasons)! But, if you get an efficient notary, then they draw up documents and one of them is a power of attorney that gives the foreiner all rights to sell, rent etc…..

Once you understand the titles and what you want, it's pretty simple, all you need is the cash and the correct paperwork

Regards,

James.

As an indonesian living in Australia, I will not buy property there, I prefer to invest in eastern sub Sydney. Safer investment and good return. High risk high gain if you want it. Furthermore you are not indonesian citizens ,why do you want to risk your money there.
The land law there is grey,the locals can take your property anytime

I am living in bali at the moment and I have thought long and hard about whether to invest here or not.

Tourism will be here for a long time, probably for ever. And the thing to realise is its not just aussies who are doing are frequent visitors to Bali. There are people from all over the world. Lots of americans, french, uk, scandies, all sorts. And at the moment its the javanese who are the major investors in Bali. There are a lot of rich people in Indonesia as a whole, but most of them are from Java and they are buying up in Bali.

All that is well and good but the thing that has turned me off the most is the quality of the construction. There are no building codes or standards, there are no tradesman so to speak, only people who have some experience in a certain field because somebody else once showed them how to wire up a house. Everything is built dodgy to put it lightly. And the thing is that its not dodgy in the eyes of balinese or indonesians. Thats just how things are done. You make it up as you go. Improvise.

From what I can tell there are probably some goods deals to be done with land but if your just looking at apartments or villas I would be cautious. You really need to be on the ground overseeing every part of construction.
And there is always the money part. If you dont have the cash you are going to struggle. Commonwealth have set themselves up over here and I have heard that they are offering finance to foreign investors(aussies), but your looking at 13% on any finance so you would wanting to be getting those magical 20% figures that some people are talking about.

In my opinion I would not consider it if I was not on the ground over here with a good understanding of the system and the way things get done…or dont get done. You need really good contacts, you need someone you can rely on completely, who is indonesian and speaks english very well. Language is huge barrier. If you are thinking about doing from your desk in australia you are asking for trouble.

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