Guide for foreign investors

Buying in Lombok
with everything checked

A foreigner cannot hold freehold land in Indonesia — which is why two decisions come before the price: the structure you come in with, and who runs the villa if you let it out. Here are the 8 steps, what you sign at each one, and what gets checked along the way.

8steps
3-6months on average
Freethe whole guide
01

Choose the legal structure

1-2 weeks

A 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.

What we check here

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.

02

Find the asset and reserve it

2-8 weeks

This is where this site comes in. When something fits, you sign a reservation with a deposit in exchange for exclusivity while the checks run.

Always ask for: a copy of the certificate, the cadastral plan, the holder's ID, and the price broken down per are or per m². With those four items in front of you, the checking can start.

The deposit must be refundable if the checks do not confirm what was agreed. Get that in writing.

What we check here

We draft the reservation with the terms in writing: what points the checks have to confirm, how long the exclusivity runs, and that the deposit comes back in full if any of those points is not confirmed. We request the land paperwork ourselves — certificate, cadastral plan and the owner's ID — when the reservation opens, and the checking period does not start counting until you have it. That way you start with the dates fixed and everything on the table.

03

Check the paperwork (due diligence)

2-4 weeks

The step where the paperwork and the land confirm each other. You verify that the certificate exists in the registry, that the boundaries on the plan match the land on the ground, that the zoning allows what you intend, that there are no charges, and that whoever signs is entitled to.

Certificate against the registry (BPN): that the number exists and sits in the name claimed.

Cadastre and boundaries: a surveyor measures on site. Finding extra or missing metres is routine.

Zoning (RTRW/RDTR): that the municipal plan allows tourism or residential use. It is the check worth running early.

Charges, mortgages, rights of way, and heirs: if the holder has died, you need all of them.

The seller's unpaid property tax (PBB).

What we check here

Your notaris and the surveyor run these checks inside the exclusivity period we reserve for you in the reservation. We go through them with you in writing: the certificate cross-checked at the registry (BPN), the land classification in the municipal plan, and the metres measured on the ground. If a document is missing, it is requested within that period. Around Kuta there is land zoned expressly for tourism, which is the kind that suits a rental villa.

04

Incorporate the company, if needed

4-8 weeks

This step is yours if you build, develop several units, or have the volume to make a company pay for itself. If a licensed operator runs the villa, skip it; if it applies, the company is set up before you sign and it buys, not you.

What the company gets is HGB, the right to build and to hold what is built. Freehold (Hak Milik) belongs to Indonesian citizens, and no structure changes that.

The company's stated purpose needs the right KBLI codes for what you will do: holiday rental and property development are not the same code.

Minimum capital and its payment: the figure gets updated, so it comes from your notaris on the day you decide.

NPWP (tax number), NIB and the activity licences.

A company bank account and monthly bookkeeping from month one.

What we check here

The first thing we look at is whether you need this step at all. If a licensed operator is going to run the villa, we tell you so and move on to the contract with them: you come in at the cost of a contract instead of the cost of setting up and maintaining a company. When it does apply, before the incorporation deed is signed we pin down with you what you are going to do with the asset, and the KBLI codes follow from that. We also include the codes for the next phase when they fit your plan. Each KBLI carries its own minimum investment, so we match the scope to the capital you have in mind. Your notaris reviews it together with the tax adviser who will keep the books, and we hand you the first year's calendar of obligations already set out.

05

Contract and signing before the notaris

1-3 weeks

In Indonesia the contract is executed by a notaris (and a PPAT for the transfer of the land right). They are a licensed public official, not your adviser: they will not negotiate for you.

The binding contract is the Indonesian one. The translation is a courtesy; if the two differ, the original wins.

Check: price and payment schedule, term and renewal conditions if it is a leasehold, the deadlines each party takes on, who pays which tax, and what happens in the event of death.

Payments go by traceable bank transfer, which also leaves you the receipt.

What we check here

We have the renewal signed on the same day as the main contract: the years and the price, or the formula that updates it, are written in from the start. The commitment extends to the holder's heirs as well. The notaris raises it to a public deed, so the renewal carries a certain date. And we go through the Indonesian version with you before signing.

06

Payment, taxes and registration

1-2 weeks

You pay, the transaction taxes are settled, and the right is registered. Until it is registered, it is not yours as against third parties.

In a sale, the seller settles their tax on the gain and the buyer theirs on the acquisition; the rates and exemptions change with the structure, so ask for the calculation in writing before you sign.

Keep every receipt: you will need them the day you sell.

Afterwards there is an annual property tax (PBB), small but recurring.

What we check here

We prepare the full cost as a single figure before you commit: price, taxes, notaris, surveyor and management, each line with its amount. The percentages are the ones that apply to the legal structure you have chosen. We then see the process through to whichever endpoint that structure has: with Hak Pakai or HGB, until the right is registered; with a leasehold, until the notarial deed (akta sewa). In both cases we hand you the folder with every receipt in order, which is what gets asked for the day you sell.

07

Building permit and construction

3-12 months

To build you need the PBG (the old IMB) and, depending on the case, environmental studies. With the PBG granted, what you build is registrable and sells without friction.

A local architect who knows the height limits, setbacks and coastal distances for the area.

A milestone-based contract with the builder, with a retention and a penalty for delay.

Technical supervision: a surveyor visits the site and signs off each milestone before its payment is released.

What we check here

We split the price into milestones — foundations, structure, roof and finishes — and put it in writing: the first instalment covers materials and getting started, and each following instalment is released with its milestone completed. Before releasing one, we send our own surveyor, who visits the site and leaves a report with dated photos. That way the payment schedule advances at the pace of the build, and you can follow it from your own country.

08

Rent it out and manage it

ongoing

If you bought for yield, this is where the number turns into income. The villa is usually run by an operator and you collect what it produces: occupancy, average rate, commission, maintenance and income tax on the rent.

Work from occupancy data for the area: that is what makes one villa comparable with another.

Day to day, it is usually a licensed Indonesian operator who runs it: booking channels, guests, invoicing and the taxes on the activity. You get your statement; income tax on your rent is separate.

Management takes between 15% and 25% of gross income. That is not just commission for filling the calendar: it covers running the business side.

Maintenance in a tropical climate on the beachfront is expensive and constant: budget for it from the start, not when it shows up.

What we check here

We work the yield out net and month by month: we start from the occupancy of comparable villas in Kuta, high and low season kept separate, and deduct management, maintenance and rental tax. The sheet shows every line, so you can compare two villas by the same method. We introduce you to operators in the area licensed to run the villa, with the contract read by someone on your side. That is where it is set down in writing: what commission, how often they settle and in what detail, who declares the income from the activity, and what notice it takes to change operator. Once you have a year of your own figures, we update the sheet with you.

Managed service

We can take care of all of it

Which route suits you best, the paperwork, dealing with the seller, the viewings and the signing. And if you are going to rent it out, the licensed operator who runs it. Whether you are buying something that already exists or it has to be built.

Nothing up front. Nothing on top of the published price.

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