Choose the legal structure
1-2 weeksA foreigner cannot hold land in Hak Milik (freehold) in Indonesia. So the first move is not finding a plot: it is deciding which structure you will hold it under, because that changes the price, the taxes and what you can do afterwards. And if you are going to rent it out, there is a second question: who is going to run the villa.
Leasehold: you rent the land for 25-30 years. It is the most common route and the cheapest to set up, though the value falls as the years run down: that is why the renewal, and the price of it, are agreed in the same contract from the start.
Hak Pakai: a right of use in your own name as a resident foreigner, up to 80 years in total. It needs a KITAS and only covers a home.
PT PMA: an Indonesian company with foreign capital, which can hold HGB, the right to build and to keep what is built — not freehold, which is reserved for Indonesian citizens. It is the route for anyone building, developing several units, or with enough volume for the structure to pay for itself: it gives you control and deductible costs, and in return it is a real company, with its minimum investment plan, its bookkeeping and its filings. The notaris confirms the figure.
If you are going to rent it out, the usual arrangement, and the easiest one, is that the lease is in your name and an Indonesian operator with its licences handles the bookings, the guests, the invoicing and the tax side of the business. You run nothing: you get paid, and you get a statement.
We choose the structure with you before you start looking at land, based on what you plan to do with the villa and on your residency situation, with the cost of each one in front of you. In all three your right is documented: with Hak Pakai and with a PT PMA, in the certificate issued by the land registry (BPN); with a leasehold, in the deed you sign before the notaris. If you are going to rent it out, we also introduce you to the operator who will run it, and we go through the contract between the two sides with you before you sign. Once the structure is set you know from the start on what terms you can sell or transfer. And if your plans change over the years, we tell you in advance what moving from one structure to another involves.