“Foreigners can't own land in Indonesia.” The sentence is true — and that's exactly why it's the most common reason investors wave Bali away before ever looking at the numbers. Yet the same sentence applies to millions of foreign investors who today hold villas, hotels and resorts in Bali. How is that possible? The answer is called leasehold — and once you understand it, you stop fearing it.
Freehold vs. leasehold — two worlds of ownership
Indonesian law recognises several forms of property tenure. Two of them matter to you.
Freehold (hak milik) is full ownership of land — and by law it is reserved exclusively for Indonesian citizens. No workaround via nominee structures, which some agencies still offer, is safe — Indonesian courts have repeatedly declared them void. If someone in Bali offers you “freehold for foreigners”, walk away.
Leasehold (hak sewa)is a long-term right of lease over land and buildings — registered, transferable and inheritable. You buy the right to use, rent out and on-sell the property for a pre-agreed period. A typical Bali leasehold runs 25 to 35 years with an extension option: for AMANI World® villas the standard is 35 years with an option for another 35.
A leasehold is not a “fixed-term apartment rental”. It is a registered property right that can be sold, gifted and inherited — and it generates rental income for decades.
Why the leasehold doesn't bother an investor
At first hearing, 35 years sounds like a disadvantage compared to “forever”. With an investment property it's different — the maths decides, not the feeling of eternity.
The modelled income from short-term rental of a Bali villa sits in the 15–18% a year band at a target occupancy of 75%. In other words: the modelled payback of the initial investment is 6 to 7 years — and the leasehold then keeps running for decades more. For comparison, a city investment flat yielding 3–4% a year needs 25 to 30 years to reach the same milestone. You may own it “forever”, but you spend the first three decades paying off the purchase price itself.
Add the second layer: leasehold value trades. A villa with a running rental operation and 30 years of leasehold ahead of it has a market price — a share, or the whole leasehold, can be sold on to another investor.
What to watch out for — and what AMANI verifies
A leasehold is exactly as safe as the quality of the contract and the checks behind it. This is the minimum you should demand of any offer in Bali — and what we do as standard on our villas:
- The land title. We verify that the lessor is the genuine owner with clean title, free of encumbrances and disputes.
- The building permit (PBG, formerly IMB). A villa built without a permit, or in breach of one, is a risk no yield can pay for.
- Zoning. The land must sit in a zone where short-term rental is legal — Bali has zones where tourist accommodation is not permitted.
- The extension option in the contract. The extension terms must be agreed today — not “we'll sort it out in 35 years”.
- Notarised execution. The contract is drafted and certified by a licensed notary (PPAT) — not by an estate agent over coffee.
Our legal team handles this entire process on the ground in Bali — and the investor receives the due diligence results before signing, not after.
What this looks like with a fractional share
With a fractional investment from €20,000, the leasehold is held at the level of the AMANI group's Indonesian company and the investor owns a share with a right to the rental income — with the same legal due diligence behind it. Our on-the-ground team takes complete care of the villa: rentals, maintenance, guests, monthly reporting. The income is always modelled, never guaranteed — for any specific villa we'll also show you a conservative scenario.
Next steps
If you'd like to see how a leasehold works in practice on a specific villa:
- Download the investment guide — it includes the contractual structure and projections.
- Request a tailored projection for your amount via the form on the homepage.
- Or book a no-obligation call — you'll get honest advice even if you decide not to invest.
And when you're in Bali, we'll gladly show you the villa in person.