Indian Investment in Amed, Bali: Exploring Property Market Trends

• Researching and selecting a property.
• Negotiating terms and price.
• Conducting due diligence to check property legality and encumbrances.
• Signing a sales and purchase agreement (Akta Jual Beli) or lease agreement.
• Transferring payment.
• Updating the property title under the new ownership or leaseholder’s name.

The process and timeframe for buying land in Bali can vary depending on a number of factors, such as the location, the type of land, the ownership structure, and the specific regulations and requirements involved. Once you have found the land you want the land transfer process takes about a month.

1. Inspection and due diligence (2 weeks)Contracts (1 week)Money transfer (1 week)
Timeframes can vary for many reasons, but the above timeline is a fair representation.

The costs of buying a villa and leasing land in Bali can vary depending on factors such as the location, size, and condition of the property, as well as the terms of the lease and the fees charged by agents and lawyers. Generally speaking, you can expect to pay the following costs:

• Purchase price of the villa: Initial capital outlay for your villa.Leasehold fees: This includes the cost of the lease, which can vary depending on the location and size of the land, as well as any renewal fees and taxes. A typical leasehold fee is around 10-15% of the purchase price per year.Legal fees: You will likely need to hire a lawyer to assist with due diligence, drafting contracts, and registering the property, which can cost around 1-2% of the purchase price.

1. The first step in setting up a PT.PMA business is to determine your business activities and the type of company structure you require. This will involve choosing a business name and identifying the shareholders, directors, and commissioners of the company.
2. Obtain a Tax Identification Number (NPWP). To obtain a Tax Identification Number (NPWP) for your company, you will need to register with the tax authorities in Indonesia. This will involve submitting a range of documents, including your business plan, company registration documents, and other supporting materials.
3. Secure your Business License and Company Registration.
   1. Once you have your NPWP, you will need to secure a business license and register your company with the relevant authorities in Bali. This will involve submitting a range of documents, including your articles of association, shareholder agreements, and other supporting materials.
4. Setup a business bank account in Indonesia and deposit the minimum paid-up capital.
5. Obtain other necessary permits and licenses.

Depending on the nature of your business activities, you may need to obtain other permits and licenses from various government agencies in Bali. These may include licenses related to construction, environmental impact, or other regulatory requirements.

The approximate costs of setting up a PT.PMA business in Bali can vary widely depending on a range of factors such as the nature of your business activities, the size of your company, and the complexity of the regulatory requirements. A simple company setup is approximately $2,500 and takes around two weeks to complete incorporation.

The terms of leasing land in Bali are agreed between the land owner and the individual or party interested in leasing the property. A typical lease will last from 25-30 years, however, some leases are as short as 20 years, while others can be longer than 40 years. The figures refer to the initial lease.

The lease contract will normally permit the leaseholder to extend the lease for a similar period to the initial lease, however, the price will reflect the updated market value of the land at the time of the renewal.

Foreigners are allowed to own villas and land in Bali through a leasehold or a Right-to-Use (Hak Pakai) agreement, as owning land in Indonesia is restricted to Indonesian citizens and Indonesian legal entities.

A leasehold agreement grants the foreigner the right to use the land and villa for a certain period of time, typically up to 25 years, with an option to renew the leasehold agreement. A Right-to-Use agreement grants the foreigner the right to use the land and villa for up to 80 years, which is a longer term than a leasehold agreement.

1. PT.PMA – Foreign-owned investment companyNPWP – Tax Identification NumberIMB -IMB (Izin Mendirikan Bangunan) is a building permit.Pondok Wisata – License to rent your villa out to tourists.Notaris – An official responsible for drafting and authenticating lease & legal agreementsBPHTB – Land and Building Acquisition TaxHak Malik – FreeholdGreen zone – Cannot build onYellow zone – legal to build on.Hak Pakai – LeaseholdAre – Unit of measure predominantly used in Indonesia. 1 are = 100sqm’sIDR – Currency used in Bali. 15,250 IDR = $1

When buying a villa and leasing land in Bali, there are several taxes and fees that you may need to pay, including:

• Value-Added Tax (VAT): This is a tax imposed on the sale of new properties and is typically around 10% of the purchase price. However, if the seller is not a taxpayer or does not have a VAT ID number, the tax rate is increased to 20%.Land and Building Acquisition Tax (BPHTB): This is a tax on the transfer of ownership of land and buildings and is typically calculated based on the sales price or the assessed value of the property, whichever is higher. The tax rate varies depending on the location and value of the property but can range from 1% to 5%.Notary and Land Deed Fees: You will need to pay fees to the notary for drafting and registering the land deed, which is typically around 1% of the sales price.Legal Fees: You will need to hire a lawyer to assist with due diligence, drafting contracts, and register the property, which can cost around 1-2% of the purchase price.Rental Income Tax: If you plan to rent out the villa, you will need to pay income tax on the rental income. The tax rate varies depending on your residency status and can range from 5% to 30%.
It is important to note that taxes and fees can change over time, and the above information is accurate as of 2023. We recommend consulting with a qualified tax advisor or lawyer to get up-to-date information on tax implications when buying a villa and leasing land. Please Contact Us for more information on this subject

The return of investment is around 7 years. This is a conservative estimate based on the current real estate market in Amed. However as land and property prices are on the increase, buying a villa in Amed before prices explode gives you the best chance to generate outsized returns on your investment.

Our property management services cover everything from maintenance to rental bookings. We offer a complete villa management solution along with monthly reporting and tax accounting assistance.

For a luxury, 3-bed pool villa, investors can buy a home in Amed for around USD$249,000. The cost of buying a villa in Amed is considerably cheaper than a like-for-like property in Seminyak, Sanur or Canggu.

The real estate market in Amed is entering the early stages of a property boom. Land and property prices are currently low compared to the more established areas in the Southern part of Bali. Property investors are looking to profit from low prices in Amed as they anticipate significant land and property value appreciation.