Real estate investment in Bali for French investors

Bali, Indonesia's paradise island, attracts thousands of tourists every year, but also an increasing number of foreign investors. The island, known for its idyllic beaches, spectacular volcanic landscapes and unique culture, has become a privileged destination for investors looking for new opportunities. If you are a French investor and want to explore the possibilities of investing in Bali, this comprehensive guide is for you. It will provide you with all the essential information to make informed decisions, whether for real estate purchase, local businesses or opportunities in the tourism and agriculture sectors.

1. Why invest in Bali?

1.1 A growing market 🌱

Bali is one of the most popular tourist destinations in the world. This popularity has generated steady economic growth, particularly in the hotel, retail, real estate and services sectors. The number of foreign tourists is increasing every year, supported by improved local infrastructure and simplified administrative procedures for international travellers.

1.2 Tax and Regulatory Benefits for Foreigners 📜

The Indonesian Government has put in place a legislative framework favourable to foreign investors. Although the purchase of real estate by foreigners is regulated, there are mechanisms such as long-term leases or investments via local companies, allowing many investors to settle on the island in a sustainable manner.

1.3 Quality of life and cost of living 💸

Bali combines the quality of life of a tropical setting with a very advantageous cost-of-living structure compared to other popular Asian destinations. Daily life is much cheaper than in France, allowing expatriates and investors to benefit from an excellent return on investment.

2. Investment sectors in Bali

2.1. Real estate: a dynamic market 🏡

Bali offers a wide range of real estate opportunities, whether for luxury residences, villas, hotels or commercial spaces. The real estate market in Bali is attractive to investors, thanks in particular to strong demand in tourist areas such as Seminyak, Ubud and Canggu.

Popular types of real estate

• Villas and residences : Private villas and luxury residences are highly sought after, especially by tourists and expatriates.
• Hotels and hostels : The hotel sector is very profitable in Bali due to the constant influx of international tourists.
• Agricultural land Investing in agricultural land is an attractive option, especially for those who want to invest in sustainable agriculture or long-term real estate development.

How to invest in real estate in Bali

Although foreigners cannot purchase land directly in Indonesia, there are solutions to invest in real estate, such as the creation of local companies (LDPT). This type of company allows a foreign investor to own 100% of a business and buy property on behalf of the company.

2.2. The tourism sector 🌴

Tourism is an economic pillar in Bali, and many tourism businesses thrive on the island. Whether for excursions, car rental, guide services, restaurants and bars, the market is in constant demand. In addition, the growth of eco-responsible tourism and wellness opens up new opportunities in niches such as green hotels, spas and wellness retreats.

2.3 Agriculture: an increasingly popular niche 🌱

Agriculture in Bali, including the production of rice, tropical fruit and coffee, represents a great investment opportunity. The island is a major producer of high-quality coffee, and sustainable development initiatives in this sector are attracting more and more foreign investors. Integrated agricultural projects, combining production and tourism, are also growing.

3. Regulation and legal aspects

3.1. Real estate legislation 🏡

Although the direct purchase of property by foreigners is prohibited in Indonesia, there are several ways to circumvent this prohibition:

• Long-term lease : You can sign a lease contract lasting 25 to 30 years, with the possibility of renewal. This option allows for long-term enjoyment without ownership.
• Limited liability companies (LDCPs) : Creating a 100% foreign owned company is another way of investing in real estate. This allows you to buy land on behalf of the company.
• Contracts under customary law (Hak Pakai) : This type of contract allows foreigners to rent real estate for up to 70 years (with several periods of 25 years).

3.2 Taxation in Bali 💰

Bali follows Indonesia's tax regulations, and foreign investors need to be aware of certain tax obligations:

• Income taxes : The income tax rate in Indonesia varies, with tax brackets ranging from 5% to 30%, depending on income.
• Property tax : Although the acquisition of land by foreigners is limited, once real property is acquired through a company, property taxes apply.
• VAT and other taxes : The value added tax (VAT) is 10% in Indonesia, which applies to goods and services sold on the island.

3.3 Business start-up in Bali 💼

The creation of a business in Bali is relatively simple, especially for foreign investors who choose to create a business. PT LDCs (limited liability company). This legal structure allows a foreign investor to control 100% of the business and to establish itself in the local market. The process of registering a company in Bali requires administrative action by the Indonesian authorities, and minimum social capital is required.

4. Best areas to invest in Bali

4.1 Seminyak and Canggu: for tourism investment 🌴

Seminyak and Canggu are among the most popular areas to invest in Bali. Both cities attract high-end and expatriate tourists looking for modern properties, quality restaurants and leisure facilities. The real estate sector in these areas is experiencing strong demand, making it strategic choices for investment.

4.2 Ubud: cultural and spiritual oasis 🧘‍♀️

Ubud is renowned for its soothing atmosphere, rice fields and spiritual retreats. It is the ideal place to invest in projects related to well-being, culture and alternative tourism. Investors interested in retirement homes, spas, or eco-friendly hotels will find Ubud a fast growing market.

4.3 Nusa Dua and Jimbaran: luxury and hospitality 🏨

Nusa Dua and Jimbaran are luxury destinations in Bali, perfect for investors who want to get involved in high-end hotels. These areas host large tourist complexes, and real estate is in high demand.

5. Risks and precautions before investing

5.1. Real estate market volatility 📉

The real estate market in Bali, although in strong growth, can be volatile in response to global economic fluctuations and political changes in Indonesia. It is essential to study the local market well and to be prepared for any changes in property value.

5.2. Complex administrative procedures 🛠️

Administrative procedures can be complex, especially for foreign investors. It is essential to surround competent local advisers, such as lawyers and specialized accountants, to navigate the legal framework and avoid pitfalls.

Investing in Bali offers many opportunities, including real estate, tourism and agriculture. With a booming market and a relatively favourable tax environment, the island is an attractive destination for French investors. However, it is essential to have a thorough knowledge of legal, tax and regulatory aspects before engaging. By following the advice and taking the necessary precautions, investing in Bali can prove

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