Understanding HGB When Buying a Villa Through a PT PMA

If you’re a foreigner looking to buy property in Bali, it’s important to understand land titles. The highest land title in Indonesia is Hak Milik (Right of Ownership), also known as Freehold Title, but this is only available to Indonesian citizens. Foreigners cannot own land indefinitely in Indonesia. However, if you set up a PT PMA (foreign-owned company), you can legally acquire a Hak Guna Bangunan (HGB), or Right to Build, which is the best title a foreigner can obtain.

What is HGB?

HGB is a land title that allows your PT PMA company (not you personally) to own and develop property in Indonesia. The title is initially valid for 30 years, extendable for 20 years, and renewable for another 30 years—giving you control over the property for up to 80 years.

Advantages of HGB

Ownership Stability: Your company legally holds the property under Indonesian law.
Long-Term Security: HGB properties maintain or increase in value over time.
Resale Potential: You can sell your HGB property at market value, just like freehold properties.
Legal Protection: HGB ensures your purchase is protected under Indonesian law.

Can HGB Be Extended Beyond 80 Years?

Yes, HGB can be extended beyond 80 years by applying for a new HGB title after the final renewal period expires. While the law currently allows a maximum of 80 years (30+20+30), there is no restriction on reapplying for a fresh HGB title once the period ends.

How Does This Work?

When the 80-year period is nearing expiration, your PT PMA can apply for a new HGB with the Indonesian Land Office (BPN).
As long as your company is active and complies with regulations, the renewal process is straightforward.
You will need to pay renewal fees and ensure the property is being used according to its intended purpose.

This effectively allows indefinite ownership under an HGB structure, making it a secure option for long-term property investment in Bali.

Conclusion

For foreigners looking to invest in Bali, HGB through a PT PMA is the safest and most secure way to own property. It provides long-term stability, legal protection, and resale value. If you’re serious about investing, setting up a PT PMA is a worthwhile step to secure your property in Bali.