Investing in the Bali property market can be an incredibly lucrative business. There are several ways you can go about it but the main routes are buying or leasing land, building from scratch and then selling or leasing the property, or buying an existing property and renovating then renting or selling it.
Whichever option you choose, you will need a company to operate your business legally in Bali. Today we will explain the process of setting up a Property PT PMA so you can legally buy land, build property and sell or lease it.
Setting Up Property PMA in Bali
You will need to set up a PT PMA in the category ‘OWNED OR RENTAL REAL ESTATE’:
“This group includes the business of buying, selling, renting and operating real estate, both owned and leased, such as apartment buildings, residential buildings and non-residential buildings (such as storage/warehouse facilities, malls, shopping centres and others) as well as the provision of houses and flats or apartments with or without furniture for permanent use, either monthly or yearly. These include the activities of selling land, developing a building for self-operation (for leasing spaces in the building), dividing real estate into land plots without developing land and operating a residential area for movable houses.”
Cost of Property Investment PMA
The majority of real estate PMAs are considered Medium Risk and the price for setting up the company will be IDR 35,000,000. This is a one-off cost so once you have the PMA set up it is yours until you close it down.
Requirements For Registering A Property PT PMA
It is possible to register a property PMA from outside of Indonesia or from within Indonesia. We will need the following:
- Copy passport shareholders (full pages)
- Copy ID and tax register number of local shareholder (if any)
- Overseas and Indonesia address of each investor
- Company name (3 variations in case they are not available)
- Company address (in most cases will be the VO)
- Line of business (which will be OWNED OR RENTAL REAL ESTATE)
- The share of capital for each investor (total capital min. US $ 1.000.000 and issued capital min. US $250.000)
- Position of each investor in the company (Director, Commissioner)
You need to have at least 2 shareholders, 1 director and 1 commissioner. There can be up to 3 people for each position, which later can be called as Board of Directors and Board of Commissioners.
The company address for your property business needs to be registered as an office with the relevant local authorities, so in most cases cannot be your house or an alternative place of business you might be affiliated with. The simplest solution is to use a Virtual Office. We have connections with VO’s in all districts of Bali and prices range from IDR 7,000,000 – IDR 14,000,000 per year.
How Long Does It Take To Create A Real Estate Company In Bali?
The process of starting a property company in Bali takes 3-4 weeks.
Applying For Investor Visa Through Your Property Company
Once you have your Property PMA set up you can use it to sponsor several Investor KITAS. The Investor Visa is valid for two years and available onshore for IDR 20,000,000 with a processing time of 3 months, or offshore for IDR 17,500,000 + USD 150 with a processing time of 7-10 business days.
There is also a one-year version available for IDR 12,500,000 (+ USD 150 if processing offshore.)
For more information on what you can and can’t do with an Investor KITAS, take a look at this blog post.
Operating a PMA – Important Information
Visa Agency Bali is partnered with an accounting firm that is available to help with both of these requirements at an additional cost.
Company Tax in Bali
For every company in Indonesia, it is mandatory to report the annual tax. The general income tax rate is around 12.5-25% of the net profit if the company’s gross revenue is above IDR 4.8 billion. A flat rate of 25% is applied when the yearly revenue of the company is above IDR 50 billion. If the company’s gross income is below IDR 4.8 billion, the final income tax rate is 0.5% of the monthly gross income.
PMA Investment Reports
Additionally, to paying taxes, you will need to do a quarterly investment report. This report usually contains the profit and loss statement of your company, information on the number of employees, etc. This report is important as the government will see that your company is up and running instead of being a dormant company. Failing to provide such a report will attract the authorities to run an audit of your company.
Running A Property Business In Bali
For more insight into the Bali real estate scene, we have written a post with tips on running a Bali property business here.
If you would like to learn more about setting up a company in Bali, get in touch with us today. You can do so by sending an email to info@visaagencybali.com, by messaging our Facebook page or sending a message on WhatsApp:
+6281338277350 (Claudia)
+628191562006 (Gede Darsana)
+6281338704627 (Agus)
+628123813470 (Gede Arya)
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