Can a foreigner legally build and operate a villa rental business in Bali?

[dernio]

Hey guys,
I’m trying to understand how foreigners are able to set up and manage villa rental businesses in Bali. There’s someone I I been following on Youtube for over a year, a Western guy in his early 40s who moved to Bali with his wife and kids around 2016. He started by building a villa for himself, but over time began helping others do the same. From what he shows, he’s clearly involved in the full process, land scouting, design, construction, property management, guest stays, and rentals.
Everything looks real and professionally handled, not just a surface-level pitch.
So I’m trying to understand:
What legal structures make this possible for foreigners?
Can foreigners lease land long-term and build on it securely?
What kind of company formation or registration (if any) is needed to run such a business?
What kind of visa allows someone to live in Bali long-term while managing such a setup?
Are there any important permits or rules that someone doing this needs to know?

I’m asking purely to understand how some people actually make this work in practice. If anyone here has real experience or knows the process, I would be really grateful for any valuable insights/infos you might share


Thanks in advance.

 

[jstar]

On Bali if you’re both foreigners: Create a PT PMA, forget about HGB and Hak Pakai, but start a leasehold as developer with the owners. They will let you do whatever you want

Then you can after the build, sell the leasehold against a profit (normally 10% tax) or sublease or even make a deal with a management company for daily rentals etc.

 

[infotechweb]

Hey guys,
I’m trying to understand how foreigners are able to set up and manage villa rental businesses in Bali. There’s someone I I been following on Youtube for over a year, a Western guy in his early 40s who moved to Bali with his wife and kids around 2016. He started by building a villa for himself, but over time began helping others do the same. From what he shows, he’s clearly involved in the full process, land scouting, design, construction, property management, guest stays, and rentals.
Everything looks real and professionally handled, not just a surface-level pitch.
So I’m trying to understand:
What legal structures make this possible for foreigners?
Can foreigners lease land long-term and build on it securely?
What kind of company formation or registration (if any) is needed to run such a business?
What kind of visa allows someone to live in Bali long-term while managing such a setup?
Are there any important permits or rules that someone doing this needs to know?

I’m asking purely to understand how some people actually make this work in practice. If anyone here has real experience or knows the process, I would be really grateful for any valuable insights/infos you might share


Thanks in advance.

Excellent query! In my experience, foreigners typically opt for long-term leases (25–30 years, with extensions) rather than directly owning land in Bali. The correct way to operate a villa rental business is to set up a PT PMA, which is a foreign-owned company structure that enables you to manage rentals, hire employees, and conduct business lawfully.

To stay for a long time, many investors use KITAS (work or investor visa). Before beginning construction, it's also critical to verify building approvals, permits, and zoning. For seamless design, construction, and legal documentation, most people collaborate with local experts.

Businesses that specialize in assisting with these steps, such as CoCo Development, make the process easier for foreigners.

 

[pantaiema]

There is a good article highlighting the difference between 'Hak Pakai (HP)' and 'Hak Guna Bangunan (HGB)' written by professionals. Also in many cases, they provide a reference to the authoritative sources e.g the laws/regulations, so not personal opinion.

In many countries, Leaseholds is typically given for 99 years (extendable), but In Indonesia 'Hak Pakai' is given for maximum of 30 years (extendable).

It is in Indonesian but you could use free online translators, such as 'google translate' to translate it into English.

https://www.hukumonline.com/klinik/a/perbedaan-hak-guna-bangunan-dan-hak-pakai-lt657c001024ac9/

 

[centurion]

There is a good article highlighting the difference between 'Hak Pakai (HP)' and 'Hak Guna Bangunan (HGB)' written by professionals. Also in many cases, they provide a reference to the authoritative sources e.g the laws/regulations, so not personal opinion.

In many countries, Leaseholds is typically given for 99 years (extendable), but In Indonesia 'Hak Pakai' is given for maximum of 30 years (extendable).

It is in Indonesian but you could use free online translators, such as 'google translate' to translate it into English.

https://www.hukumonline.com/klinik/a/perbedaan-hak-guna-bangunan-dan-hak-pakai-lt657c001024ac9/

Not so useful. In Bali they give lease based on notarized contract in almost all cases, not Hak Pakai (that can be registered in land agency).