The Bali real estate market is currently surging, with plenty of opportunities for investment throughout the island. For those looking to capitalise on this growth, there are a couple of methods to go about purchasing real estate in Bali.
One common method is through a foreign-owned company – called a PT PMA.
Do you need a PT PMA to buy property in Bali?
“Do foreigners need to establish at PT PMA to buy property in Bali?”
The short answer is “No.”
There are a few legal ways for foreigners to buy property in Bali. This can be through various titles or a lease. Not all require a PT PMA and for some, it may be advantageous to own a leasehold property without the hassle of establishing a PT PMA.
One way is by establishing a legal entity called a PT PMA. The entity will then hold an ‘HGB’ title on the property. With this option, investors own the business and the property is an asset that belongs to the business. Some investors may choose these options if this structure is best suited to their investment needs, and meet certain requirements discussed later in the article.
Why set up a PT PMA to buy property in Bali?
For some, establishing a PT PMA is a good way to structure their property ownership and offers some advantageous benefits, including:
- Long-term ownership & legal protections: Ability to own property and afford the same legal rights as a freehold certificate.
- Resell benefits: Ability to sell property that is under an HGB title as a freehold title.
- Business Opportunities: A PT PMA can be used for conducting business activities and can be beneficial for immigration purposes, making it a flexible investment option.
PRO TIP! A PT PMA it is not a requirement to buy property, and for some might not be the best options. Contact us directly to discuss whether this is the right structure for you.
There are several rules and requirements about PT PMAs in Indonesia that one needs to consider.
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Overview Rules about PT PMA in Indonesia
PT PMA stands for Perseroan Terbatas Penanaman Modal Asing, or Foreign Owned Company. If one plans to generate revenue or make sales with a company, then one needs to set up a PT PMA.
If one wants to use a PT PMA to invest in property, it must fit an acceptable sector. Here is a list of sectors which are open to investment on the Negative Investment List. It includes sectors like tourism, public works, and transportation.
To register a company as a PT PMA, some qualifications must be met:
- The PT PMA must have at least two shareholders, a CEO and a Chief Commissioner.
- If a business has at least one foreign shareholder, including a foreign company, it qualifies as a PT PMA.
- The director of the company must live in Indonesia to carry out business activities. The Indonesian government will give them a tax identification number and a work permit (KITAS).
- The foreign investor must have a minimum capital of IDR 10 billion. This is about USD 700,000. The investor must pay about 25% of the minimum capital requirement.
- If the PT PMA is in a partially closed investment sector, it must have a local partner.
How to set up a PT PMA in Indonesia
To set up a PT PMA, one “DIY” option is to contact the Indonesia Investment Coordinating Board (BKPM). Then, check the validity of the PT PMA details through BPKM’s One Stop Integrated Service (PTSP) and follow the instructions. Unfortunately, the process of registering your PT PMA is long and difficult for foreigners.
Much of the information, legal documents, and official communications are in Indonesian. Getting all the licenses, permits, and documents prepared effectively is a daunting task. Many companies don’t get off the ground or are forced to close due to the arduous system. Hence, it is recommended to find Bali law offices that specialise in establishing a PT PMA.
PRO TIP! Mirah Investment & Development has a white-glove legal service that can fast-track PT PMA applications with minimal work from the client’s perspective. Contact us today to learn more.
Documents needed for a PT PMA in Indonesia
These are the official documents needed to prepare a PT PMA:
- A Principle License and Business License from BPKM.
- A Deed of Establishment from a public notary.
- A domicile letter from the district’s local authority.
- A Tax Identification Number (NPWP).
- A taxable entrepreneur confirmation (PKP).
- A Company Registration Certificate (TDP).
- A Manpower Report and Company Welfare Report.
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Mirah Investment & Development’s legal representatives guide clients through the entire process from start to finish – including documentation, permits, licenses and all that is required to ensure a secure, legal, & hassle-free property investment. For clients where establishing a PT PMA is appropriate for their property investment, the end-to-end legal services are complimentary.
The process can take around ten weeks to complete. To avoid any legal complications or confusion, it’s highly recommended to seek out Bali law offices for PT PMA establishment, as foreign investors can potentially lose months of time or rack up even heavier costs trying to complete the process alone.
Contact us today to discuss your property investment needs and learn about the full end-to-end services on offer.