Foreign Ownership of Land in Bali & Indonesian Law of Land.
There aren’t possible for foreigners to buy land in Indonesia under the foreigner name but there are 2 ways for foreigners to own the land in Indonesia:

1. Using the Nominee

Nominee is foreign buyer use local people for writed and sign on document but he tied by agreement. So he cannot sell that land without your signature.

The Nominee will sign four documents with the foreigner as follow:
1. A Loan agreement: acknowledges that the foreigner has lent to the Nominee the purchase price of the land.
2. A Right of Use agreement: allows the foreigner to use the land.
3. A Statement Letter: where the Nominee acknowledges the foreigners loan and intention to own the land.
4. Power of Attorney: The nominee signs an irrevocable Power of Attorney giving the foreigner the complete authority sells, mortgage, lease or otherwise deal in the land.

2. Using the PMA
The most significant change in Indonesian investment law came in 1997 when the government introduced the PMA (Penanaman Modal Asing or Foreign Investment Company). This allows foreign investors to set up a company in Indonesia, without having to have Indonesian partners. The PMA can be 100% owned by the foreign investor. PMA companies are allowed to own the title of the property for a period 25 years and have to be renewed by the government.

To set up a PMA, you will be required to:

1. Submit the detailed business plan.
2. Operate in a business environment that adds value to Indonesia in terms of foreign skills, employment and environmental benefit.
3. Make an appropriate cash deposit in an Indonesian based Bank. The amount varies and is calculated from the capital employed in the business.
4. Show the property investment as an asset of the company.

The process takes approximately 3 to 4 months and once its completed; the company can apply for work permits for the foreign directors, 3 permits in the first year of operation. The cost of setting up the PMA is between IDR 30 to 40 Million or equivalent with USD 4,500.

Procedures for Land Acquisition
All transactions of land rights must be via deeds executed before a land deed official at the local office of the Pejabat Pembuat Akta Tanah (PPAT) where the land is located and must be registered in the regional office of the National Land Agency. The PPATs are privately managed offices (usually run by a notary) authorised by the National Land Agency to handle land acquisition matters.
Although there is no regulation that contracts have to be in Indonesian language, we recommend having contracts and agreements always drawn up and executed in Behasa Indonesia to prevent later arguments that the local partner did not fully understand the content.

Extra fees on transaction

1. Notary: 1-2% of the value of the transaction. Depend the notary
2. Vendor Tax & Purchaser Tax: Both the vendor and purchaser pay 5% tax on the value of land and property sales.
3. Nominee fee: about 1-5% of value of transaction depend your deal with nominee.

Land titles according Indonesian laws.

Land matters except for mining and forestry are under the jurisdiction of the National Land Agency (Badan Pertanahan Nasional) formed to administer all matters relating to the Basic Agrarian Law of 1960 such as the registration of land rights and the granting of rights and various permits to use the land. There are currently some categories of land rights:

1. Government land (tanah Negara) where the land is not registered with the relevant land office..
2. Tanah Adat or pelaba pura .There is many owner of this land and usually this land need many people to sign on transaction.
3. Certified land, the title to which is governed by the Basic Agrarian Law of 1960 and is registered at the local land office. There are five principle types of land rights held under the Agrarian Law. These are:

1. Right of Ownership (Hak Milik)
Freehold land. This right can only be held by an Indonesian citizen, not a corporate entity whether local or foreign. Certain legal entities designated by the government, such as State Banks, agricultural cooperatives, religious bodies, and social foundations may hold this right subject to certain restrictions. This right of ownership is held in perpetuity. It can be sold, transferred and bequeathed.

2. Right to Build (Hak Guna Bangunan – HGB)
This land is right to construct a building on land for a period of 20 or 30 years (renewable for another term of 20 years). This right can be sold, exchanged, transferred, and mortgaged, and can be held directly by any corporate entity whether it is a local company or a government approved PMA company.

3. Right to Rent (Hak Sewa Bangunan)
This is the right to use land owned by another private party (the lessor) for building purposes. The right cannot be registered at the land office and therefore does not exist in certificate form. The law does not stipulate a period for such lease agreements and whether this can be transferred or not depends on the original agreement between the parties.

This right may be held by a foreigner permanently domiciled in Indonesia or a foreign legal entity having a representative office in Indonesia. It cannot be mortgaged.

4. Right of Use (Hak Pakai)
This is the right to use State-owned or other land by public or private persons or entities for a definite period or occasionally for an indefinite period. This land right cannot be sold, exchanged or transferred unless explicitly provided in its grant or agreement.
This right may be held by an Indonesian individual or entity, certain foreign individuals or a foreign legal entity with a representative office in Indonesia.

5. Right of Exploitation (Hak Guna Usaha)
This is the right to exploit State-owned land for agriculture, fishery or husbandry purposes for a period of up to 35 years with a possible 25 years extension.
This right can be held by Indonesian individuals/entities as well as government approved PMA companies. The certificate can be mortgaged.