How to invest in Nusa Penida

Long considered dry land, Nusa Penida is now a target for investors looking to invest in the tourism sector. At 30 minutes from the mainland, the island of Nusa Penida offers idyllic scenery for investors.

Nusa Penida is rapidly emerging as one of Bali’s most promising investment destinations, especially in the tourism and property sectors. With government backed infrastructure projects underway and increasing tourist traffic from the mainland of Bali, now is considered a strategic time to invest in the island.

However, navigating land ownership in Nusa Penida requires careful due diligence, as administrative complexities, unclear boundaries, and unmapped plots still pose challenges. Investors must also decide between leasehold and freehold structures, understand taxation, and secure proper legal agreements, preferably under a PT PMA for foreign ownership and rental licenses. Despite the risks, with the right guidance and legal structure, Nusa Penida offers high potential for long-term returns in hospitality, real estate, and tourism related ventures.

With years of experience assisting international clients, ILA Global Consulting has earned a strong reputation for guiding investors through the legal, tax, and regulatory landscapes across Asia, including Indonesia. Our team combines deep local expertise with global best practices to deliver strategic, fully compliant solutions tailored to each client’s goals. Whether you’re exploring high potential areas for tourism and property investment including investing in Nusa Penida we provide end-to-end support to ensure your venture is secure, legally sound, and built for long-term success. With a proven track record, clear communication, and client-first approach, ILA Global Consulting is the trusted partner you need to make confident investment decisions in Indonesia.

Is it the right time to invest in Nusa Penida?

The island has several projects in construction supported by the Indonesian government, such as the controversial elevator going to the famous Broken Beach, Crystal Bay. Long developed on its East Side facing Nusa Lembogan, and the North coast facing the Bali mainland, the island is now seeing development all around.

The provincial government and the kapubaten are trying to improve the infrastructure to make Nusa Penida a significant attraction for tourists. Nusa Penida receives thousands of tourists coming from Bali for a day tour or a multi-day trip. With new investments and new businesses opening, offering a large panel of restaurants and accommodations, it is definitely the right time to invest in Nusa Penida.

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What are the risks of investing in Nusa Penida?

Despite being part of Bali, Nusa Penida still has some administrative difficulties. Nusa Penida is part of the KlungKung Kabupaten and is dependent on the land office of KlungKung. Some of the lands in Nusa Penida are not yet mapped, and some land owners have not yet established a land certificate.

When it comes to dealing with land ownership and boundaries, some difficulties may emerge, and patience and diligence are key for a successful investment. We strongly recommend conducting due diligence to ensure important information before entering into a lease agreement or purchasing freehold land or any business in Nusa Penida.

• Land ownership

• Boundaries. Indeed despite having a land certificate, the boundaries are sometimes unclear

• Check any dispute on the land with the heirs or family

• Land and building ratio (having a land is great but knowing which percentage of the land can be built is important before any purchase

• Tax payment to ensure there is no tax outstanding

• Water access. As Nusa Penida is dry land, the water supply can be a challenge in the long term and obtaining legal permit is a key

• Road access agreement. Some lands may cross or print on other lands, public or private, and it is important to ensure that if the land access is secured through a road access agreement.

How to invest in Nusa Penida?

Once you have found your dream land or good land opportunity and before entering into an agreement with a local owner of a land there are some steps to follow to ensure a secured investment without any rush. Local owners or brokers have the habit of pushing the sales by intimidating that several buyers are interested and it sometimes leads to unsecured decisions.

Steps to invest in Nusa Penida

1. Take your time to discuss with the seller and do not rush to make any payment before signing any contract
2. Ensure to clearly understand the object of the deal and avoid all misunderstandings
3. Ask as many questions as you can on all the boundaries, to whom the land surrounding your land belongs.
4. Understand how electricity and water supply are provided
5. Negotiate the terms and conditions of the purchase.
6. Contact your lawyer or us to prepare a secured contract based on your discussion, or contact us to discuss with the local owner.
7. Sign a memorandum of understanding (MOU) or Intention to Purchase (ITP) to secure the land. Once this document is signed, you usually have 30 days to complete the next step.
8. Complete a FULL due diligence. Ownership is not sufficient, and if you want to use a notary, ensure it is a FULL one.
9. Define how you want to invest by choosing the proper structure to optimize the taxation.
10. Sign under a PT PMA or individual name by reviewing carefully the contract with a lawyer or a trusted notary.

Purchase a leasehold or freehold

Before finalizing a deal with a land owner or a property owner, it is essential to define how you want to invest and choose between freehold and leasehold property. Despite some misunderstandings, foreigners can own property under a company and without a local person. You do not need to be an Indonesian to buy a freehold property. The company will purchase the SHM (Hak Milik), and the land title will transfer to the company under a new title called HGB. This title is valid for 30, 20, and 30 years. During this period, the land title can be reconverted into an SHM and sold as a freehold property without depreciation.

Difference between freehold and leasehold land

Set up a PT PMA and get the proper license

Once you have secured the deal, it is essential to define how to invest to avoid legal and tax issues. Investors are indeed authorized to invest under their name if they do own a KITAS. Some notaries agree to sign a lease agreement with a foreigner despite the agrarian law strictly defining that only foreign residents can obtain a leasehold called Hak Sewa.

Investing under a personal name is a fast solution, but it doesn’t authorize the person to rent out the property. Even local Indonesians typically need a licence to rent out daily property or to run a small business.

As a foreigner, the only legal way to rent out a property is to set up a company called PT PMA and to obtain the proper license under the business or the property. The license called Hotel or Apartment Hotel authorizes the foreigner to rent out a property on a daily basis.

Having a PT PMA also offers some tax advantages such as:

• Having some expenses under the company and using the money before this is taxed.

• Lower tax when it comes to reselling the property.

• Tax advantages at 0% if the profit is reinvested for at least 3 years.

• Invest from overseas using a holding and take part in a business.

We strongly recommend contacting us or another lawyer before taking any steps to invest in a property. Indeed, some property managers may recommend investing fast under a personal name without explaining the tax implications.

Key Terms & Definitions for Investing in Nusa Penida

The table below defines crucial terms from property ownership types to local regulations that every investor should know to make informed and secure decisions.