Hak milik
- Who can hold it
- Indonesian citizens and certain entities provided for by law.
- Term
- No limit on duration.
- Extension
- Not applicable.
- Use
- Ownership of the land. Not open to a foreigner directly.
Legal and tax
By Mathieu MAILLOT — 8 min read

Buying property in Bali appeals to many French-speaking investors who want to diversify their assets or settle in the tropics. The Indonesian setting, however, imposes specific rules on land ownership and rights of use. The Western model cannot be reproduced here: several types of property rights exist, each with its own conditions, and each one shapes any investment project in Bali. What exactly do hak milik, hak pakai, hak guna bangunan (HGB) and hak sewa (leasehold) cover? What are their usual uses and their limits, and what role does a PT PMA play in these structures? This article aims to clarify those questions and to guide every foreign investor through this complex legal framework.
What are the main property rights recognised in Indonesia?
The Indonesian system distinguishes several forms of rights attached to land or a building. The framework for the terms of HGB and hak pakai is Government Regulation No. 18 of 2021, cited later in this article. Full ownership of the land is not open to foreigners. This framework was designed to protect the local social fabric while allowing investment within set limits.
These are the four main types of land rights to know:
Each option has its own features and offers distinct advantages depending on the buyer's profile and nationality.
Hak milik is the most complete form of property ownership in Indonesia, equivalent to full ownership. This right, however, remains strictly reserved for Indonesian citizens and for certain entities recognised by local law.
The main features of hak milik are:
A foreign investor is therefore not allowed to acquire a hak milik directly. A nominee arrangement is not a step in a purchase, nor a recognised way to hold this title. The structure may be unenforceable against third parties. Nullity or loss of the property is not automatic: it depends on the facts and must be confirmed with a lawyer. Other frameworks exist and should be examined according to the project.
For non-Indonesians, the law provides different ways to hold or operate real estate. These arrangements strictly regulate the relationship between foreign investors and land assets in Bali.
Hak pakai is a right of use. The eligibility conditions for a foreigner, whether an individual or a company, are set out in the regulation in force and should be confirmed with a lawyer. It does not give access to hak milik.
On state land or a management right, a fixed-term hak pakai follows the ceilings in Government Regulation No. 18 of 2021: 30 years, then a 20-year extension, then a 30-year renewal. On hak milik land, the initial term is at most 30 years and renewal is by deed. Each stage must be applied for separately. Commercial use is not opened by the title alone. Transfer remains subject to the controls provided for in the regulations. Text of the regulation: PDF of regulation No. 18 of 2021
An HGB is held by a legal entity, not by a foreigner in their own name. A PT PMA can be that legal entity if the activity and the regulation allow it. It does not secure the project by itself and does not, on its own, authorise a tourism operation. It is neither hak milik nor a hak sewa.
Granted for up to 30 years, an HGB on state land may then be extended for up to 20 years, then renewed for up to 30 years, under the same Regulation No. 18 of 2021. These stages do not form a single 80-year title. The right is transferable between eligible legal entities. The company's compliance is checked on an ongoing basis.
Hak sewa, often called a leasehold, is a contract entered into with the holder of the land. Its term is the one that is negotiated and written down. It is not a statutory average of 20 to 50 years. Renewal is negotiated. It is not already secured.
This contract does not confer ownership of the land. It gives the use provided for during its term. It does not stand in place of a tourism operating licence. Its scope depends on how it is drafted, on its registration, and on the framework that applies to the project.
Hak milik
Hak pakai
HGB
Hak sewa (leasehold)
How do you choose the best structure for your investor profile? Here is a summary table for comparing the main features of each option.
Each solution has its strengths and constraints. A private individual will often favour hak pakai, while a hotel operator will opt for a PT PMA with an HGB in order to secure the investment.
Support from experts in the Balinese market is essential in order to avoid any risk of incompatibility with Indonesian regulations, which change regularly.
Buying directly under hak milik is not available to non-Indonesians. The most common solutions are hak pakai or a long-term lease (hak sewa, leasehold) signed with the owner.
Some investors choose the PT PMA route in order to obtain an HGB and carry out commercial operations in the Balinese market.
Setting up a PT PMA gives access to certain rights, such as hak guna bangunan, but it requires close monitoring of the regulations. Tax obligations and compliance with local shareholding quotas call for constant attention if the structure is to last.
An immediate purchase does not mean a perpetual right: only careful management of renewals, and compliance with legal changes, will consolidate a property investment in Bali.
Before any signature, it is advisable to check:
A full legal audit carried out by a notary specialised in Indonesian law is an essential precaution if unpleasant surprises are to be avoided. This step also helps avoid confusion between leasehold and freehold.
The Indonesian government regularly adapts its legislation to meet economic challenges, while preserving national control over land. Investing in Bali therefore requires staying informed about regulatory changes and adjusting one's asset strategy accordingly.
With that in mind, following the news and emerging practice makes it possible to identify lawful opportunities, and even to anticipate possible future openings in the framework for foreign ownership.

We advise international investors looking in Bali and Lombok: location, budget, how to hold the asset, and which projects to consider.