Legal risks when purchasing property in Bali

Bali real estate: legal risks and investment potential

The Bali real estate market attracts foreign investors with high rental yields and a stable tourist flow. However, behind the attractive figures lie legal specifics, lack of knowledge of which may result in additional expenses.

Due diligence and documentation

The first step is to verify the developer: наличие a PBG building permit, company registration, and management licenses. In parallel, it is necessary to check the zoning of the land plot using public maps — the color of the plot determines the legality of commercial rental. The sale and purchase agreement must include timelines, penalties, and a transparent yield calculation mechanism — without this, the investor is deprived of real protection tools.

Ownership legal structure

Foreign individuals cannot own real estate on a freehold basis directly — leasehold or ownership through a PMA company is used. Extension of the leasehold after the expiration of the term is not automatic: it is subject to negotiation with the landowner. Property management in Bali is typically entrusted to companies established by the developer, which ensures a unified service standard.