Pourquoi et comment investir à Sumba
More development occurs in Bali, and more investors are looking for alternative investments in East Indonesia. After Lombok, Sumbawa, and Flores, Sumba is becoming a prime destination for those looking to invest in Sumba and achieve high returns. This island, facing Australia, has captivated travelers seeking authenticity and exclusivity. Culture in Sumba remains well-preserved, and its stunning landscapes are now attracting property investors and developers. However, as the market and professionalism are still developing, those looking to invest in Sumba must approach cautiously and focus on essential steps before signing agreements or starting construction. Reasons to Invest in Sumba Sumba offers hectares of land for the price of a villa in Bali or Lombok. Unlike the other islands, Sumba still offers freehold land for a reasonable price. Development especially in Bali has reached a point where getting a premium location is not difficult. Lombok still has some premium locations, but the competition is already in construction, and the market in Lombok seems, at the moment, not to be following the trend of the construction while travelers are looking for new islands and unique experiences. Sumba has been a place where high net worth individuals were traveling due to the accommodation cost. Only a one-hour flight from Bali, Sumba is seeing new projects and new investors move there to offer alternative accommodation along the ocean on pristine beaches to attract surfers or individuals looking for a unique experience. ROI (Return on investment) is always subject to different factors: Price of acquisition Occupancy rate Price per night Maintenance cost Competition Ability to sell Stability of the market and potential growth Sumba currently matches many of the criteria, with a low acquisition price, low competition, accessibility, and the ability to practice at a high price per night. The market is growing due to the congestion of other markets in Indonesia, and it could be the next spot to just sit on land banking. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. How to Invest in Sumba Like other markets and islands, Sumba is under Indonesian regulation, making the rules similar to those in Bali, Lombok, and the rest of Indonesia. Those investing in Sumba must navigate the same legal framework when acquiring property. Transactions for freehold properties are conducted through a trusted notary selected by ILA, ensuring the investor or seller is protected based on agreed terms and conditions. While most transactions in Sumba involve freehold property, some investors are now purchasing land, subdividing it, and subleasing it to others, offering alternative investment opportunities. Here are the steps to always conduct before investing or developing a property. Understand the difference between leasehold and Freehold Developers and landowners are offering different types of investments under leasehold agreements or full ownership. A leasehold agreement is a rental agreement (Hak Sewa) for a certain period of time with terms and conditions defined in the contract. The lessee is not the land owner but rents it for the defined time. A leasehold agreement is complex as it is important to check all terms and conditions to protect the parties and any dispute. At the opposite of the leasehold, the freehold title (SHM) can be acquired by a foreigner purchasing the land by setting up a company (PT PMA) in Indonesia. Ownership is guaranteed and the landlord loses its rights on the land. The land title is converted into an HGB Title for a period of 30 + 20 + 30 years. During this period, the foreigner can resell the land as a freehold property and expect capital gain. This is in contrast to leasehold property, where the landlord will take back the land after the terms. Steps to follow before investing in Sumba Select the land properly in the right area (Sumba has 2 airports and each area has its minuses and plus) Check and sign a preliminary agreement before paying any deposit to the notary or the seller. It is difficult to take back a deposit, even if it is refundable. At ILA, we usually recommend drafting a Memorandum of Understanding or an ITP (Intention to Purchase) and agreeing on the terms and conditions of the deal before any payment. Pay the deposit on an escrow account, never to the seller directly Conduct due diligence on the property and the seller. Scams also occur in Indonesia, and land may have complex situations. Due diligence needs to be performed properly to avoid any issues on the zoning, access road, ownership, licence of the seller, mortgage, tax issues etc. If you intend to operate a business with the freehold or leasehold property, set up a PT PMA to purchase it. This will provide some tax advantages and an easier transition to the heirs. If you purchase a freehold property, you must sign the final lease agreement or the Akta Jual Beli (AJB). Setting up a PT PMA in Sumba (LLC Company) Foreigners must set up a limited liability company to purchase land or invest in Sumba and do business with it. The company’s setup takes a few days and can be done remotely. The company, called PT PMA, allows foreigners to obtain a hotel license and an apartment license to operate villas and hotels. Indonesian regulations forbid foreigners from earning income without a proper license (KBLI). The company needs to meet some requirements and ILA can assist to setting up the company: 2 shareholder minimum (0.1% at least for the second shareholder) Shareholders can be individuals or corporations 1 commissioner and 1 director The director must be a resident with a KITAS (stay permit). Investors in the company can obtain this list. Authorized capital depending on the activity of the company (around 10 billion IDR)
Éviter les risques lors de l'achat d'une propriété à Bali et à Lombok
Purchasing a property in a foreign country comports risks. Bali and Lombok offer beautiful property investments from developers with more or less experience. Avoiding property risk requires thorough research, strong contracts, and careful due diligence. Developers have built and delivered thousands of projects in recent years, but poor contract protections and shallow due diligence now reveal preventable issues. Bali and Lombok have attracted investors and developers from all over the world, with varying levels of professionalism. Unfortunately, some developers had no prior experience in housing or villa projects. These sellers often used contractors with poor-quality workmanship, leading to issues just months or years after handover, such as structural defects or failures due to weak supervision during construction. While responsibility is shared between contractors and developers, it is ultimately the buyers who suffer the consequences. Avoiding property risk means verifying track records, inspecting build quality, and ensuring legal safeguards before committing to any investment. Proper due diligence Basic notary due diligence Unfortunately, due diligence in Bali and Lombok conducted by notaries is very basic. Real estate agents or developers sometimes contribute involuntarily to this poor due diligence due to the pressure to sell and get commissions. Notary Due Diligence in Bali or Lombok is sometimes limited to checking the ownership and zoning of the land. Not that those factors are not important, but they are unfortunately not sufficient. Indeed, land ownership is the first thing, and it is rare to see someone trying to sell something he doesn’t have rights to. Zoning is also a prime thing to check, as it will determine the purpose of the land and the activities that can be done. For example, a Pink Zone will allow tourist activities and the ability to develop a hotel, while a Yellow Zone is usually for residential purposes and doesn’t permit villa rental activities. Bali and Lombok seem not to have sufficient resources to check all construction, but a lot of the buildings are located in areas where they should not be built for Airbnb purposes. It is crucial to verify these factors to minimise risk to property. What to check during the due diligence In addition to the ownership and zoning, a developer or investor must conduct deeper due diligence to avoid any trouble over time, as we can see now rising around Bali. Due diligence ensures the land purchase or the construction is safe for the investor. Lawyers or ILA are going deeper in the due diligence process. Here is a list of points we try to cover: Building permit of the project. As reminder each construction shall start once the building permit has been approved (not only registered) Business licence and Legalities of the developer. Indeed a few developers are selling properties or supervising projects without any accurate licence which can lead to tax issues and legality of the project Access roads are certainly one of the biggest issues we face in Lombok or Bali. Clients have no proper agreements and discover in time issues to access or maintain the road leading to the property. It can even arrive at the property being surrounded by other owners not allowing the access Land size is also an issue, especially on leasehold properties. Indeed, developers and landlords subdivide the land to make lease agreements, and the boundaries of the property are sometimes unclear. The contract doesn’t state the land’s true size. Investors often overlook the land occupancy coefficient during due diligence, which directly impacts building permit approvals (PBG and SLF). Bali and Lombok enforce strict rules on building height limits and construction density (KLB). Local religious and regulatory factors also dictate land development. Indonesia’s strong religious traditions actively shape what developers can build and where. Local community can also impact the way you can build or develop a land Master lease agreement is probably the one where with experience we face most of the issues. Indeed developers are most of the time not owners of the land. They transferred their rights to the new lessee (the client), but unfortunately, their own agreement (master lease agreement) was not strong enough to protect the client. It even happens to see some developers trying to sublease a land they even did not finish to pay themself, leading to an insecure situation for the client. The points above are just an example of what a proper due diligence shall look like and include. A due diligence in Bali or Lombok takes 2 weeks to 1 month depending on the Kapubaten (area where the property is located). Having proper due diligence is certainly the basics when it comes to purchasing or leasing a property. Unfortunately, some developers have not even conducted proper due diligence, not intentionally but by lack of knowledge, pressure, or timing. After the due diligence, the other step is to step to a proper and secured contract. Start your investment journey in Indonesia the right way With so many diverse investment opportunities in Indonesia, you need to make sure you’ve got the right setup to do business here. Get help from our team of experts to register your company, navigate the real estate market and secure your visa and stay permit. Schedule a free call with us today to plan your next steps with ILA. Risks on Contracts in Bali and Lombok A leasehold agreement and a pre-agreement define the relationship with the developer or landlord. Unfortunately, many basic agreements lead to complicated situations between parties. Avoiding property risk requires understanding that even professional developers depend on third parties, which can cause delays and disputes. When litigation arises, contracts become strictly enforced, with each party fighting for their interests—making comprehensive agreements essential. Lease agreement With experience, we have clients contacting us for issues we cannot do anything about since the contract was not protecting enough. A lease agreement is a private contract between a lessor (landlord or developer) and a lessee. All terms and conditions are defined in the contract since Indonesia has no real protective law regarding foreigners
Comment trouver le meilleur investissement immobilier à Bali
Bali offers among the best Return Investment on the property market nowadays for already a few years. However, with the number of offers on the market, it is not always easy to find the right property investment, and it is difficult to decide which one is really. Despite the legal aspect we always cover, we are looking at this article on how to find the best Bali villa investment and on which criteria define its choice. Location The golden rule also applies also on the property market in Bali. Picking up the right location is the key. For the one who has never visited Bali we advise to understand first the different hotspots in Bali. Some properties might seem close to the ocean and are in reality on the other side of a main congested road making the property at more than 25 minutes or more from the attraction. Bali has several hotspots, such as Canggu, Sanur, Uluwatu, Berawa, Seminyak, and Ubud. Unfortunately, some developers can mention those locations, but their properties might be far from those destinations, making the investment more difficult to rent out. New areas are under development, betting those areas will develop and are still surrounded by rice fields which unfortunately can disappear with new surrounding projects making the main point of the project (being surrounded by rice fields) gone. Those areas, such as Seseh and Cemagi, have potential and need to be studied. The location is key in Bali villa investment and should be chosen based on the purpose of the investment. Areas like Umalas and Tumbak Bayu are primarily residential, attracting expats looking for medium- to long-term rentals. At ILA, we are happy to guide you in selecting the right location based on your preferences. Developer and quality construction Once the location has been selected, it is important to define which developer or seller to trust for your property. Unfortunately some projects have been developed over the years with bad quality control and the investment after a few years requires a lot of maintenance while other properties in Europe would not move for 30 years. Too many developers or contractors try to reduce the cost and the quality of the construction despite the beautiful design. Several developers in Bali, local and foreign, with serious experience develop fantastic and beautiful projects with top quality control on their construction. We recommend checking their project in Bali or overseas to understand their experience in handling construction and which certified contractor they use. Despite the professionalism of the developers, the contractor is one the key to the warranty of the property. This is one of the reasons several developers, knowing the quality of the construction, do not offer a warranty. IF there is no warranty, RUN AWAY. Legal documentation of the project Once the location has been defined and the developer or property selected, it is important to look at the legal documentation of the villa or apartment. As we mentioned in several articles, there are several aspects to check, and it is important to perform due diligence to understand if the zoning allows, for example, to rent out the property on Airbnb or Booking.com for example. Also Read: Navigating Contracts and Agreements in Bali: Your Guide to a Smooth Investment Journey ROI and Forecast Bali offers a great return on investment between 9% to 15% nowadays. It is important when it comes to the forecast to understand how the market is evolving. There is no market in the world staying higher than other countries indefinitely. This economic rule is simple. Once a market is surperforming, it attracts other investors, creating exceeding supply and bringing the cost for land and construction higher and a high competition on the daily rental, bringing prices lower. The ability to sell the villa is also a factor to take into consideration for the exit strategy. We have selected a few villa projects to invest in Bali below and available on our investment page. Example of villas in Bali Amari Villa in Canggu Amari Villas is a modern Bali villa development in the serene and fast-growing Padonan area of Canggu, Bali. This premium villa complex features 12 luxury villas, each with private gardens, swimming pools, and stunning rooftop terraces. Just minutes from Canggu’s beaches, dining, and entertainment hubs, Amari Villas offers the perfect blend of tranquillity and convenience. With its modern design, high ceilings, and stylish interiors, this Bali villa is an excellent choice for lifestyle buyers and investors looking for high rental yields and long-term value growth. With a Rental Yield of 13-20% per year and Return on Sale After Completion 25-35% the developers have selected a perfect area to invest and do daily rental or spend vacation in Bali and assuring an excellent first or additional investment. The Dune Collection in Uluwatu Located in Pecatu, near Uluwatu the developer has worked on Mediterranean design where world-class design meets an extraordinary coastal setting. Set on Bali’s tranquil Bukit Peninsula near the Bvlgari Resort, this exclusive ensemble of villas embodies modern elegance and functional genius. Each residence’s fluid contours and thoughtfully integrated spaces invite natural light and fresh air, while the sweeping coastal views and close proximity to pristine beaches, top beach clubs, and exceptional dining enrich every moment. Here, design and location work in harmony, setting a new standard for elevated coastal living. The rental yield in this area is between 12 to 15%. The developers have provided different forecasts with low occupancy and high occupancy making this project in any case a successful investment in Bali. We invite you to discover more properties on our page here or contact us to know all the best offers and how to find a villa in Bali.
Ce qu'il faut savoir avant d'investir à Sanur et à Bali
Investing in Sanur has become increasingly attractive as the area has undergone significant transformation over the years. Once known as an old red district, Sanur evolved into a popular retirement destination and is now a dynamic hub drawing families seeking a peaceful environment and more affordable investment opportunities compared to Canggu or Uluwatu. However, investing in Sanur is like other places in Bali—there are a few things to consider before moving or investing in a property or business in this area. Legal option for purchasing a property in Sanur When it comes to purchasing a property in Sanur, there are plenty of villa and apartment opportunities. However, as Sanur was one of the first places to be developed more than twenty years ago, there are fewer available. Most of the offers on the market are indeed villas and apartments. Developers are developing modern apartments in Sanur near the beach. Other developers are exploring the north of Sanur acquiring land to develop new hotel or apartments complexes. As foreigners there are few possibilities on how to purchase a property in Sanur. Hak Pakai is one option foreigners can take a look at. Buy under Hak Pakai Foreign Individuals must have a KITAS (Temporary Stay Permit) or KITAP (Permanent Stay Permit) and they can only own one residential property (not for commercial purposes). The property must meet the minimum price requirement set by the Indonesian government. A Foreign-Owned Companies (PT PMA) or representative office can also hold Hak Pakai for commercial use and it can be used for business activities, such as hotels, villas, or rental businesses. Key Minimum Criteria for Hak Pakai in Bali The land must be Registered as State-Owned or Hak Milik (Freehold) and the Hak Pakai title can be granted on state-owned land or converted from Hak Milik (Freehold) through a lease agreement with an Indonesian owner. The Indonesian government sets minimum property price rules to qualify for Hak Pakai as of the latest regulations (Minister of Agrarian Affairs Regulation No. 18 of 2021), the minimum price for properties in Bali is IDR 5 billion for landed houses (villas) and IDR 2 billion for apartments. It is important to note that the Maximum Land Size is limited to 2,000 m² per person, but more can be granted with special approval from the government. The Hak Pakai Duration is granted for 30 years and renewable for 20 years and extendable for another 30 years. Leasehold A leasehold is a rental agreement called Hak Sewa. This type of agreement can be notarized or not and is a simple contract with terms and conditions. The foreigner is not an owner but a lessee. It means that the terms and conditions in the contract define what the lessee can do with the property. It is not rare to see foreigners renting a property for 20 or 30 years. In a leasehold, the duration is defined in the agreement. There are also some developers offering 100 year leases in order on a freehold property owned by a local person. In the difference with a freehold property, the contract is very important as all the aspects are defined in the agreement. The notary is to ensure all parts understand the terms and the contract respects the law. However the notary doesn’t negotiate the terms and conditions. We recommend hiring a legal representative or lawyer in order to review and define all terms and conditions. HGB The HGB is also a way to acquire a piece of land by setting up a company. The company called PT PMA allows people to purchase land and obtain a right to build. This option is certainly the most protective as it allows foreigners to own and build under the company. The building permit and all legal documents will be under the company., as it allows. The duration of the HGB is 30 years, with a renewal of 20 years and an extension of 30 years. SHMSRS This title is similar to a Hak Pakai for apartments and condos but with no limitations. The foreigner can own a title related to the apartment for a period of 30 years and renewable for 20 and extendable for 30 years. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. Things to consider by purchasing a property in Sanur and Bali When it comes to investing in a property several considerations have to be studied in addition to the Return on Investment. ROI: Investing in Sanur requires careful consideration of the expected ROI. While developers often calculate returns instantly, future market fluctuations can impact actual profitability. Since Bali’s property market is evolving rapidly, it’s essential to analyze trends, consult professionals, and verify published figures before making an investment decision. Zoning: Not all zones in Bali allow property to be rented out on a daily basis. If the investment is for business purposes, we recommend to take a serious look at your will structure your business Tax perspective: All ROI provided is usually a gross amount before taxes. We recommend taking a look at the tax. Having a stay permit through a retirement KITAS, a company PT PMA with investor KITAS can lower the taxes Building Permits: Unfortunately, half of new construction does not have legal permits, and property is illegal. As a reminder an application number doesn’t constitute an approval. The PBG has to be obtained before the construction can start. Legal permit of the developer: Unfortunately, some developers do not have the right license to operate in Indonesia. Some of them do it because they got bad advice and trust having the right permit and some do it intentionally. We do recommend to have a proper due diligence
Tendances des investissements à Bali et Lombok pour 2025
With 2024 behind us, it’s time to review trends and forecast the property market for Bali investment and Lombok opportunities. The 2024 season has seen a lot of construction in Bali and Lombok. Several projects have been finalized, and others are in construction. What will the 2025 property market in Bali and Lombok look like? Is it still time to invest in Bali, or should people start looking at other investment places? Bali Property Market in 2024 and 2025 Retrospective for 2024 Bali is a heterogeneous market, progressing differently depending on the zone. The average occupancy rate remains stable compared to 2023, even as the number of listings in Bali grows. This trend highlights the strength of Bali investment opportunities, driven by a rising influx of tourists from Asia, including India and China, consistently following Australia in monthly visitor entries. July and August are still top of the season, with travellers from the north hemisphere having their holidays. Interesting fact: listings are still relatively generating the same amount of gross income on average, which seems to affect the ROI while prices have significantly increased in the last 2 years. Property listed in 2022 and 2023 were bought during the Covid or at the end of the period. 2024 has seen Uluwatu emerging and attracting a lot of purchases and constructions. Despite environmental issues like water shortages and cliff erosion, Uluwatu, Bingin, and Melati have seen rapid development, thanks to their white sand beaches and surf spots. However, the market in Uluwatu continues to offer a lower occupancy rate than Canggu and Seminyak. Indeed, those two last offer the highest score and occupancy in the South of Bali, continuing to attract tourists worldwide, especially Indian and Asian clientele in Seminyak. Ubud has been in 2024 one of the leading locations with a development in all the surrounding and unfortunately sometimes acquisition on some green zone, normally non constructible. Read More : How to buy a property in Bali? Invest in Bali in 2025 The moratorium announced at the end of 2024, during the election period, did not stop buyers from investing and developments in Bali. Constructions for Bali investment projects are ongoing, with most lacking building permits or only an application number. They go around the regulation by getting SLF and magically a PBG after the SLF has been issued. The president’s last words during a speech had, per objective, to make Bali similar to Hong Kong and Singapore. Developers and professionals have for some time interpreted those words for a green light to continue the development as it is. Bali investment opportunities remain strong. The island continues to break visitor records, attracting millions of tourists from Australia, Southeast Asia, India, the US, and Europe. The trend shows no signs of slowing down as many celebrate the new year in Bali. The current trend of listing is not stopping investors. However, the price has reached a certain level, affecting the return on investment. While it was easy to get 15% or 20% return in 2024, the advertisement of some developers at 15% is now very optimistic. With more listings and new developments, competition will rise, and 2025 may not see tourist numbers match the growth in properties. Rising land and villa prices, with stable nightly rates, challenge ROI, making it harder for property managers to achieve 9-15% returns. Poor construction and maintenance quality also impact ROI, as recent rains exposed issues in some properties. Coretax is now on and the Indonesian government has connected all institutions to control more the tax. Despite those factors, Bali will remain the leading market in Indonesia for 2025 and for the next few years. However, it is more than crucial for investors to select the location and optimize their taxes properly. Bali is the leader but other islands like Lombok have emerged considerably in 2024. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. Lombok Property Market in 2024 and 2025 Retrospective for 2024 If one market had to be qualified as a challenger in 2024, it would undoubtedly be Lombok. The island has attracted investors from all over the world. The island has changed and Kuta Lombok welcomes and connects tourists with its beautiful landscape and white sand beaches. Lombok has a lower price than Bali and the market entry price is more accessible. Most transactions in Bali are on Freehold, with lease extensions becoming problematic. Some investors are moving away due to traffic and the loss of Bali’s charm. Land with a sea view is cheaper in Lombok than in Bali, where it now costs millions. All those factors have also attracted tourists to stay in Lombok. Lombok’s occupancy rate is lower than Bali’s, but during peak season, especially in July and August, it can reach nearly 70%, higher than Bali’s. The income per listing is lower in Lombok than in Bali, but considering acquisition costs, Lombok shows a higher ROI in 2024. Lombok has changed its communication strategy with a welcoming airport and better and more recent infrastructure for cars than Bali. Its like a sense of Bali (10 years ago) than investors look at and will undoubtedly be still competing with Bali in 2025. Invest in Lombok in 2025 If you’re considering Bali investment in 2025, Lombok stands out as an excellent alternative. The prices remain attractive, and the availability of land and prime locations offers incredible opportunities for dream projects and investors alike. However Lombok still needs improvement to reinsure investors and avoid scams in 2024. The market needs to become more professional. It is not rate to see properties sold without any proper check road access, construction eligibility, ownership, unsecured contract. The trend is certainly more tourists
Opportunités d'investissement immobilier à Sumba : Considérations juridiques et stratégies
Sumba is an island rich in natural beauty and cultural heritage, and it is emerging as a promising destination for property investment in Indonesia for those looking for unique opportunities outside of Bali or Lombok. With 1hour direct flight from Bali, the pristine beaches, hills, and authentic cultural heritage, Sumba offers a different landscape than Bali or Lombok. The island was sought and visited by backpackers or a specific clientele who could afford the luxury hotels on the south coast of Sumba. Why Invest in Property in Sumba? Sumba is often considered as one of Indonesia’s last frontier in the archipelago. While other islands like Bali and Lombok have seen rapid development, Sumba retains its rustic charm, offering investors early opportunities. Growing Tourism Appeal Most tourists heading to Sumba stay in the south coast natural beauty near the pristine beaches like Nihiwatu and Marosi. The island has two main airports in the two main cities, Tambaloka and Waingapu. This strategy works particularly well as demand for property investment in Sumba continues to rise, especially as the region is at the early stages of a growing trend. Tourism in Sumba is rising, with visitors drawn to surfing, horseback riding, and exploring traditional villages. This trend points to increasing demand for accommodations, restaurants, and recreational facilities, creating investor opportunities. Land Opportunities: Sumba offers hectares of land at the price of a villa in Bali. It is a good opportunity for investors looking to buy asset and develop properties or just sit on the land waiting for capital gain. Untapped Market Potential: Unlike Bali, where the market starts to be saturated and land prices are at a premium, Sumba offers an untapped property market with vast tracts of affordable land. This affordability allows investors to purchase larger parcels for development or speculation. Infrastructure Development: The lack of infrastructure allows contractors and service providers to be part of the development process. Cultural and Natural Uniqueness: Sumba’s cultural richness offers a perfect setting for eco-friendly resorts, boutique hotels, private villas. Despite the accommodation, investors can also look for opportunities for surfing (surf shop, surf school), restaurants, travel agencies, taxis, etc. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. The island is now promoted by some developers and offers cheap opportunities, and it might be the time to purchase hectares of land at the price of a small apartment in Europe or even Bali. However, investing in Sumba requires some legal, due diligence and good strategic planning to maximize returns. Legal Framework for Property Investment in Sumba Foreign investors looking to purchase land or open a business in Sumba must comply with Indonesian regulations. Investments as foreigners are structured through the following legal mechanisms: Establishing a PT PMA for property and land investment With PT PMA, foreigners can acquire land in Sumba in two ways: Acquire land under a Hak Guna Bangunan (HGB). The land title is granted to the foreigner under its company rights and ownership for a total period of 80 years. The company can then develop and operate on the land with an additional business licence. Acquire a land under leasehold (Hak Sewa). The company gets right on the land based on a contract between the landlord and the company. This private agreement defines the terms and conditions. The parties define the duration of the contracts. Once established, the PT PMA acts as a legal entity that can hold land titles and conduct business operations. We recommend to avoid Nominee Arrangements. Some investors attempt to acquire freehold land by using Indonesian nominees, but this practice is fraught with legal risks. The last few years have demonstrated investors being scammed by local persons once they wanted to resell or the business started to work well. Big developers have been scammed by even partnering with certain local companies. We always recommend having strong agreements and always working in Indonesia on legality to avoid any further complications and having those types of arrangements turned against the investors. To know more about PT PMA you can visit our page How To Establish A PT PMA In Bali Things to Consider When Investing in Sumba Due diligence: The due diligence process is important on several aspects. It is a crucial part of the acquisition process if you want to buy land, invest in a business or partner with someone. The process includes verifying land titles, ensuring compliance with zoning regulations, and confirming that the seller has the legal right to transfer ownership, road access, building authorisation, building permit etc. Independent third party to handle the process: Sumba is a small island, and the connection between people is strong. We do recommend to use a third party to avoid collusion between parties. Contracts and notary: Notary is a key person, but a notary, unfortunately, sometimes does not have the time or experience to negotiate contracts and write a proper contract. Their role is not to work on making the best contract for the buyer or the seller. Working with a legal or lawyer is recommended to review or redact the contract. Strategic Investment Approaches Sumba’s growing tourism and untapped market present several lucrative strategies for property investors: Acquiring and Subdividing Land Purchasing large parcels of land at lower per-square-meter rates and subdividing them for resale or lease is a profitable approach. This strategy works particularly well as demand for property investment increases, especially in Sumba, where the trend is just beginning to take shape. Developing High-End Resorts or Villas Sumba has always been a secret gem for HNWI. Sumba is the perfect spot for buying a piece of land and developing Resorts and vills. Act As The Developer and offering Off Plan project in Sumba Sumba is
Comment acheter un bien immobilier à Bali ?
Buying property in Bali can be confusing between all the different articles you can read. This article sheds light on how to buy a property in Bali and Indonesia and how to proceed. Key Takeaways Foreigners can securely invest in Bali real estate through leasehold, Hak Pakai, and HGB titles, with each option offering unique benefits. Investors must navigate legal aspects diligently, such as setting up a PT PMA company for legal entity status, performing due diligence, understanding taxes and fees, and working with real estate professionals to ensure a secure and profitable purchase. Understanding Property Ownership Options in Bali It can be challenging to understand how property ownership works in Bali when buying property in Bali, but being aware of the options set up for you as an investor is crucial. Leasehold, Hak Pakai (right to use), or HGB (right to build) are options available for foreign buyers depending on their price and income level as well as their needs. Only Indonesian citizens can hold land under Hak Milik when buying property in Bali. This knowledge also aids investors in making smart decisions about buying property in Bali. 1. Leasehold Properties for Foreigners Leasehold properties provide foreigners with a reliable and stable option for investment. Individuals, Foreigners or companies can lease a property. The party selling the leasehold is called Lessor while the buyer is called Lessee. A leasehold has no maximum duration as a court in Jakarta has recognized a leasehold for 100 years. Historically, buyers have been looking to buy a leasehold for a period of 25 to 30 years, although some can request a shorter or longer duration. A leasehold can be signed in front of a notary or between 2 parties without a notary A leasehold is a private contract between two parties. The clauses have to respect the Indonesian regulation. A leasehold contract should be reviewed by a legal or lawyer to make sure all clauses are protecting your rights. On a leasehold, the buyer doesn’t become the owner. The owner is still responsible for the land and building tax. The buyer has to make sure each clause on the contract cannot be used to cancel the agreement. 2. Hak Pakai: Right of Use for Foreigners Hak Pakai is a property ownership structure that permits foreign nationals holding a KITAS or KITAP to acquire property in Bali, but only on the condition that the property already has an existing building. This certificate does not allow you to buy bare land, and the property must meet a minimum value that varies from province to province. The first piece is a 30-year term, with 80 years of… 3. HGB Title for Commercial Use Foreign-owned companies (PT PMA) are permitted to hold the Hak Guna Bangunan (HGB), which is the highest property title for them. HGB is different from a leasehold agreement in that it gives the development right, including the right to resell, transfer, or mortgage the property. It is for a 30-year term, extendable to 80 years, making it ideal for those buying commercial properties or an apartment as part of a Second Home Visa. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. Legal Aspects of Buying Property in Bali Navigating through the legal intricacies of acquiring property in Bali requires adherence to crucial procedures for people looking to secure their property purchase in Bali. Secure a proper offer with a proper contract Undertaking thorough due diligence Establishing a PT PMA enterprise if you want to do business with your property and apply for a Vila license to list your property on Airbnb Sign a leasehold or purchase agreement and review your contract with a third party to ensure the contract does not favour one side. It is a crucial step, especially on a leasehold. Secure your contract Most issues result from a wrong contract or misunderstanding. The initial offer is the basis of the relationship and the rest of the process. Reviewing a leasehold contract is crucial. The language barrier, even with a notary, can lead to unpleasant situations. Optimize your tax exposure Creating a PT PMA (Perseroan Terbatas Penanaman Modal Asing) helps you to acquire a leasehold or HGB but it also helps you to optimize your tax exposure and make your business and investment legal. The inclusion of no less than two shareholders An allowance for entirely foreign-owned enterprises in the domain of real estate A director and a commissioner Setting a PT PMA company helps you to optimize your taxation and get a better Return on Investment (ROI) and secure your property. Due Diligence and Property Verification Conducting due diligence and confirming the validity of property are essential components in acquiring real estate. This includes: Verifying that the seller is legally allowed to sell the property Verifying liens or encumbrances on land title Confirming that there are no active legal disputes regarding the land Verified the clear and legal owning of the property Verifying that the size of the land corresponds to what’s mentioned on the title Soil test being made to make sure land can be constructed Getting a proper road access agreement Prevent future conflicts over land boundaries or ownership Indonesia classified the land and properties on different zoning. Checking the zoning can influence how you can build and licenses you can get, specially if you are willing to have a license for Airbnb or a restaurant, Hotel etc. Taxes and Fees Involved Freehold Under license property regulations, in freehold property transactions, sellers are subject to the PPH tax of 2,5%, whereas buyers should pay a 5% BPHTB tax according to the government valuation. Owners also pay a yearly 0.5% Property Tax (PBB). Leasehold Non-resident lessors must pay a lease tax of 20%, while those with a KITAS
Tendance des investissements immobiliers à Ubud (mise à jour 2025)
In 2005, I jumped in a plane to start my journey to Southeast Asia and a ticket to Bali, an island that promised to be a haven of culture and natural beauty. At the time, my knowledge of this distant island was pieced together through documentaries and the vivid stories of the Lonely Planet, as Instagram and social media had not yet shrunk the world. Two places stood out for an authentic Balinese experience: Uluwatu, with its majestic temple perched on a cliff overlooking the Indian Ocean, and Ubud, the cultural heart of Bali, nestled among verdant rice paddies—now a focal point for the property investment trend in Ubud. Back then, Bukit Peninsula, south of Bali, was a sparsely populated area with early signs of development like Pecatu and Dreamland Beach. However, Ubud was already a celebrated hub for its art galleries and rejuvenating spas, the epicenter of Balinese culture as I had imagined it. UBUD the essence of Balinese culture Fourteen years have flown by since that initial voyage, and the landscape of Bali has undergone profound changes. The island has become a magnet for investors and tourists from every corner of the globe. Amidst this transformation, while places like Canggu, Kuta, and Seminyak have seen fluctuating reputations, often swayed by the fleeting whims of influencers, Uluwatu and Ubud have risen above, now leading in terms of occupancy rates. Despite the chatter among expats and long-term visitors willing to stay now in Uluwatu, my intrigue was drawn towards Ubud. I wanted to delve into why it had become an increasingly popular choice for investment and we had to deal more and more investments there. My recent time in Ubud revealed a bustling town with tourists from India, Europe, America, and Korea. It wasn’t just a matter of numbers or client interest; Ubud radiated a magnetism that drew people from all over the world. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. Ubud as an investment place Ubud has indeed been the last few years the place for Yoga, wellness and other mystical trends. Despite the trends, it seems that Ubud is this place magneting anybody to visit once in their trip. I was talking to a developer recently who also had the same understanding. Everybody includes UBUD on its list. People might choose to stay in Seminyak one night OR in Canggu but UBUD is always combined in the trip while other areas are an option. UBUD is not an option in a trip and it is a MUST. By correlation the occupancy rate makes UBUD a stable investment place in terms of recurring revenue. Additionally, the property investment trend in Ubud is becoming increasingly significant, as the area’s popularity continues to grow. Read Also: Bali and Lombok Investment Trend for 2025 The essence of travel has evolved. Visitors from hubs like Frankfurt, Paris, London, Delhi, or LA are not traversing the globe to stay in a small apartment. They seek an escape, an experience that transcends the ordinary. While some developers have eyed apartments as a lucrative venture, the true essence of travel lies in its ability to offer an escape from the day to day, a gateway to new experiences. Influencers may flock to Seminyak’s beaches for the perfect picture or story, but the majority of travelers yearn for tranquility and a chance to rejuvenate their souls amidst nature. As an expat, when family or friends visit us, Ubud is invariably on the showcase list, often bypassing places like Sanur, Nusa Dua, or Kuta. The reason? Ubud has managed to preserve its essence. No place remains frozen in time, untouched by the years, but some manage to retain their core identity amidst the change. Maximizing Rental Yields in Ubud: A Strategic Guide for Investors Ubud appears to be a secured market for property investors. From the 80’s to today the market has shown is attractivity and maintained a stable occupancy rate through the decades. While some markets can provide a high and fast ROI yield, Ubud is providing a secured and long term investment with a high ROI. The property investment trend in Ubud underscores this stability, making it an appealing choice for investors. Travelers from countries such as India are also now spending vacation and honeymoon there assuring a continuity of the attractivity of Ubud while some places like Canggu start to have their attractions in question through some travelers. Read Also: Navigating Bali’s Property Maze – A Comprehensive Guide for Savvy Investors How to optimize your return on investment in Ubud? Tourists moving to Ubud are expecting to find the heritage of the balinese culture and staying in a place pervaded by the balinese culture with a touch of modernity. The recents development of some properties in Bali have shown that the most successful projects are the one maintaining the essence of Bali. The property investment trend in Ubud reflects this, as investors are increasingly drawn to the area’s unique cultural appeal and potential for high returns. Expecting a ROI of 15% on an investment in Ubud is reasonable, especially by developing a sustainable villa including materials and decoration in harmony with the environment of Ubud. How this trend will be in 2025? Ubud continues to be at the top of the property investment destination list in 2025, combining cultural charm and natural beauty with an ever-growing demand. With its serene rice fields, vibrant arts scene, and wellness retreats, Ubud offers a haven for tourists, long-term residents, and digital nomads alike, ideal for rental properties and boutique developments. While Ubud doesn’t yet bring in as much money per listing as Seminyak does, its lower initial investment costs and consistently
Stratégie pour optimiser votre ROI à Bali en 2025
With a market having thousands of properties under construction, ILA is sharing with you the different strategies to apply in order to maximise your return on investment (ROI) while investing in the real estate market in Bali. Bali is an island in Indonesia that has attracted thousands of investors in the last few years. As legal and investment advisors, we advise investors in their investment choices. In the last few years, we have seen thousands of investors making choices between different types of investments and locations. Real estate agents and developers have promised ROI of around 15 to 20%, while investors who bought properties a few years back start to have hidden costs and realize that their investment is not bringing the expected returns. Is Bali a place with a great Return on Investment? Bali is certainly, at the moment, one of the greatest places to invest in Real Estate, even in 2024 and 2025. Indeed, in the last few years, Bali has generated some ROI at 20% or more after the Covid. However, be clear: any real estate agent promising 20% or more would be a fool today or lying. Indeed, after deducting the tax, property management cost, and marketing fee, the return on investment in Bali on the properties is around 10 to 15% nowadays for a well-located property and 7 to 12% on average. So, Bali is a place to invest? The answer is yes, as long as investors are informed correctly and choose the right property project. Despite a drop in real estate return, ROI is higher than in most other countries. Average annual rental yields range from 7% to 15%, which is significantly higher than in other countries. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licenses, and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. Property investment strategy to invest in Bali in 2025 When it comes to making choices, there are several types of investment strategies. Putting on the side the leasehold versus freehold and how to get a licence to rent out a property in Bali. Long-term investments and Renting out the property This strategy is the easiest and most commonly used in Bali. It consists of leasing a property or buying a property in the long run and rent out the property on Airbnb, Booking.com, or with other travel and accommodation providers. However, ongoing management fees and high maintenance costs are required to keep the property appealing. Investors can expect returns of 14-25% annually, helping to improve their ROI real estate in Bali. This strategy forces the investor to keep the property and not flip the investment. This strategy can work for a well-located property for daily rental. One of the other options in this strategy is to rent out the property on a monthly basis. This strategy avoids high maintenance costs and management fees. Expect a return on investment from 7 to 12% Off-plan villa (purchase on plan) and Resell The strategy here is to purchase a property off-plan and finance the development of the property. Developers are calling for funds to develop the property. Off-plan villas are usually cheaper than a ready-made property investment, and they allow the investor to invest with an investment plan during the development of the property. These properties can offer a higher ROI real estate, but it’s important to note that the invested cash may not generate returns during the first year or development phase, especially until the property is ready for the market. Average Expected Return on investment from 20% to 40% after reselling Off-plan villa (purchase on plan) and Resell after 5 years Similar to the previous strategy, this option is a mix between the first strategy and the second one. As the price of freehold property is high, we advise clients to invest for 30 years, rent out the property for 5 years, buy an extension of 5 years, and resell the property for 30 years. Investors also have to consider that once the property is on the market, the villas have no review on Airbnb and Booking.com, and some discounts are sometimes necessary or a higher marketing cost. An off-plan property usually needs 2 to 3 years to really bring a return. It is however realistic to consider doubling your investment with this strategy as long as the property market is expanding. Some developers and platforms, such as TokoInvest, offer this type of investment strategy. Average expected return on investment from 50% to 130% Common mistakes in property investment in Bali When it comes to investing in Bali, some investors quickly accept some contracts without checking the terms and conditions. Wrong project with the wrong strategy A strategy works with a good project, and a good project works with a good strategy. Some strategies can match some projects and vice versa. Unfortunately, it is common nowadays to see investors investing in projects such as Lombok or Tumbakbayu and applying a daily rental strategy. Developers are selling some projects off-plan, letting you think the property is close to the beach, while in Bali, it takes 30 minutes to go to the beach from the property. Property management companies Unexperienced property management has emerged in the last few years. It is unfortunate to see property management companies in Bali taking 30% from the clients while a good rate should be between 15 to 20%. Some companies, such as Pulse Villa Management or Bukit Vista, usually offer a complete service at a reasonable price. Developers offering property management If there was a strategy to avoid it would be this one. Indeed a lot of developers are trying to offer the property management services after selling the property. However, most developers have no experience managing properties. Some companies
Conseils pour la recherche d'une propriété à Lombok
Lombok is promoted as the new place to invest in property since Bali has been overdeveloped in the last few years. However, finding the right property in Lombok is not as easy as it could be in Bali. Although it could appear at first sight, Lombok is complex to access. Actors are less welcoming than Bali when it comes to closing a deal, and getting the right information can be confusing for a buyer as sellers are more than Bali tell you everything is possible. Is Lombok a new Eldorado or a market pushed by developers? How to find a good property in Lombok. Return on Investment on Lombok Property Lombok is a booming market currently pushed by developers who are promoting several beautiful projects. In comparison, in Bali, the projects were pushed just after COVID-19 by the demand for accommodation due to a lack of supply, as a lot of people were moving to Bali to visit the Island of Gods. Projects in Lombok are certainly profitable in the long term. However, investors have to be cautious about where and how to select their investment or where to develop their project. The breakeven point can vary depending on how the market is going to grow in Lombok. Indeed, if the number of projects grows faster than the demand for holiday homes, with Lombok being more seasonal, the Return On Investment for buyers can take time. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. The best strategy to invest in Lombok There are several ways to approach a property market with high potential. Below, we describe the different strategies currently applied by actors in Lombok in the real estate market. Acting as a developer in Lombok Often, developers are the ones getting the highest margin in real estate but also assuming the biggest risk. This strategy is to buy land, build a house and resell the house. In his strategy, the investor has to manage the construction by hiring contractors. This strategy has a high return as the developer takes margin on several aspects, from the land value appraisal increasing to the property value. Developing a project in Lombok can take 1 to 2 years, depending on the size of the project. Land Banking in Lombok Buying land at the right time and not developing it can be a good bet in a growing property market. As the demand for land increases, several investors will need land to develop hotels, villas, restaurants, and commercial buildings. This strategy is beneficial for people not looking for immediate cash flow. Land value in some circumstances can be expected to double or triple depending on the location. Renting out a villa or hotel in Lombok This strategy is the easiest way to apply. The investor buys a villa already developed or off-plan (in construction) and rents out the villa on Airbnb, booking.com, Agoda, etc. This strategy brings a good ROI in a market pushed by demand and when other projects are not yet finalised before the competition arrives. However, this strategy involves some structure to ensure some legalities, as renting out as an individual is illegal. Investors need to go through different structures and ensure to optimise it for better taxation. Also read: 7 Real Estate Investment Mistakes to Avoid in Bali & Lombok Where to find a property in Lombok Finding a property in Lombok is not as easy as in Bali. There are different actors promoting lands, and Lombok is sometimes confusing to buyers. Unfortunately, a few brokers are not yet professionalised, and it is not rare to see several brokers overlapping each other and not having the land in their listing but getting it from another person. We recommend ensuring the broker is in direct contact with the landowner and ensuring this person has all the papers and certificates regarding the land before entering into any deal. Another suggestion is to work with professional sellers or brokers who follow proper rules. One of the red flags is usually to hear that Lombok is different. Lombok real estate and property development has the same rules as the rest of Indonesia. It is usually a sign of forced sales leading to later complications. Work with a proper and licence agent Work with somebody having all the documentation regarding the property Do not pay any fee before any agreement or contract and having seeing the paper of the property Work with somebody in Lombok who do not push the investment with the timing and say there is a lot of buyers (we all know this technique) Some professional agencies are located in Lombok and have a great understanding of the place. Despite receiving commission from the sales, they follow correct procedures and normally do proper due diligence on the product. Location to invest in Lombok As in every country or property market, the investment has to be at the right place at the right time. While the Mandalika area is a great place to invest with Kuta Lombok, Sekotong, and Selong Balanak, each piece of land in each area doesn’t have the same value. All those locations are close to the beach, but the infrastructure with access to facilities and utilities can vary from one land to another. Obviously, land close to the beach, beachfront, or on the hill is a good location. However, it is important to check a few things. While a top hill provides a great sea view, road access management and utilities can lead to several issues in getting the water and all the supplies. Conduct a proper due diligence and inspection In order to confirm the location, there are several factors to