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19.02.2024

BALI: THE BENEFITS OF INVESTMENT

Article Content:

  1. Facts about Bali
  2. KITAS (residence permit) for investors
  3. Freehold and Leasehold in Bali: forms of ownership. Which one to choose
  4. Why it is beneficial to buy from trusted companies.

 

American author Elizabeth Gilbert once said: "Bali is more than a place; it is a mood, an aspiration, a tropical state of mind." Perhaps that is why Indonesia has become a country that attracts not only tourists, but also investors. In recent years, Russians are also interested in this issue, but not everyone knows how to do it correctly and profitably. This is the subject of our article. 

To begin with, let's reveal the facts that reveal Bali as a good investment for your money:

✅ fast-growing economy

✅ great opportunities for investors as Bali is a relatively young market

✅ digital nomads - an influx of foreigners who may stay on the island for more than three months 

✅ increase in the number of tourists through the construction of a second airport and a new cruise ship port 

✅ development of neighborhoods in the interior of the island. Previously, everything was tied to the airport and the beach lines. Now, however, infrastructure development is in full swing in less "beachy" areas as well. In addition, projects are being moved to the west of Changgu, on the Bukit Peninsula. Construction here is allowed only in special zones, which significantly increases demand. 

✅ you can earn money when investing in a ready-made project (although this is rare), and buying an object at the stage of unfinished construction, with the possibility of later selling it more expensive. 

✅ mortgage foreigners in Bali are not issued, but there is an opportunity to get from the developer, with which individually negotiated payment schedule, installments. 

✅ payment for real estate is much easier than with EU countries: with swift transfer of unauthorized banks, using cryptocurrency, it is possible and in rubles. 

✅ simplified tax system. The management company assumes the obligations of a tax agent and pays personal income tax itself, transferring the net profit to the investor 

✅ homeowners have virtually no restrictions on living in their homes or apartments

 

In order to stay on the island for an extended period of time, foreign nationals must obtain a residence permit. KITAS, which stands for Limited Permit to Stay Card, is the safest way to stay in the country for a long period of time.

For investors, this view can be obtained in two ways:

❇️ annual KITAS - stay in Bali for one year;

❇️ two-year KITAS - longer period of stay.

It is important to note that this type is received by investors who have invested a certain amount in a foreign company, the capital of the company must be at least 1 billion Indonesian rupiah (this is about 630,000 dollars).

A shareholder of a company may hold the position of director, but is not allowed to interact with customers, this is handled by salaried employees. 

 

Another way to obtain a residence permit is a long-term visa for 5 years. If necessary, it can be extended for the same period. The main condition is the possession of elite real estate in the country or an account in an Indonesian bank in the amount of 130,000 dollars. The only disadvantage is that you cannot work in the country on such a visa. 

 

The most advantageous program, which has recently started to operate in Indonesia, is the golden visa. In order to obtain a 5-year residence permit, an investor needs to:

- Buy $350,000 or more in stocks or government bonds

- open a deposit for a specified amount (350,000 dollars)

- start a company valued at $2.5 million or more

 

Since foreigners are not allowed to own land, we will tell you about two forms of ownership in Indonesia. These are leasehold and freehold.

The first form (lishold) is the right of long-term lease. When formalizing this property, it is important to properly prescribe the contract, which specifies the term of the lease and the right of its preferential extension. Risks in the execution of such a transaction are minimal, because by law, everything that is on the leased land - your, and the extension of the lease with the right agreement will be needed in 50-60 years. The land owner himself benefits from a long-term contract.

The second form (freehold) - it is less popular with foreigners, because it is problematic in the registration, and the price is three times higher than when buying under a lease agreement. The difficulty is also in the fact that for the registration of real estate on freehold buyer must become a legal entity and open a company in the country. Few people want to do this. 

The desire to buy real estate in Bali is gaining momentum. But often with such demand there are also scammers, whose goal is to sell not what is profitable for you, but what is profitable for them.

First, it is important to pay attention to the fact that not all buildings on the island are of high quality, local workers are not always diligent, which leads to a delay in the delivery of the object. And it is difficult to get such information without a trusted agent. 

Secondly, trying to make an online purchase on your own, there is a high risk of buying a "secondary" either at an inflated price, or without a legally competent contract. 

Thirdly, with a trusted company it is always easier to gather the necessary package of documents, to discuss all the details that concern you. And also to get answers to all questions about investments according to the laws of the country in question. 

Most importantly, trust agencies with a proven track record. 

Our managers will answer all your questions, advise you where to start and how not to make a mistake with your choice. We are ready to be your guide to an exotic island. 

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