Indonesia 2026: what changed for foreign buyers

For agencies in Bali, 2026 has been a year of tighter limits on how foreigners may do business with property, even though the basic rules on what a foreigner may own did not change. This briefing sets out what the sources we read report, what they leave open and how to adjust your advice.

Foreign investment in small hotels and guesthouses

Bali's provincial government told foreign-owned companies that new registrations in low-risk and medium-low-risk sectors associated with small local businesses are no longer open. Reports describe the governor's concern that foreign companies had used the national online licensing system to enter sectors that belong to small local operators, and the list includes budget hotels and guesthouses, small star-rated hotels in buildings under 6,000 square metres, cafes, vehicle rentals, retail and fitness centres. The restrictions are reported as in force from the third week of May 2026 (report by What's New Indonesia).

For agencies the point is practical. A foreign buyer who plans to buy a villa and run it as a small hotel or guesthouse through a foreign-owned company may now find that the licence is not available. We did not confirm whether the new limits affect companies that were registered before the change, so ask a lawyer before you sell any business plan together with the property.

Development limits

The governor has also announced plans to halt the building of new hotels, villas and nightclubs in the four busiest areas of the island. Reports describe it as an announced direction, and we could not confirm that it is already law or exactly which areas and dates apply. Before you sell land for a villa project, ask the notary for written confirmation of the zoning and of what can be built there now.

Short-term rentals

In December 2025 the governor announced a proposal to restrict or even ban the operation of short-term rental platforms such as Airbnb. One summary describes it as a direction rather than an enacted regulation, with stricter enforcement of the existing rules for licences in the meantime (Emerhub). The same summary lists what a letting villa should have: a homestay licence, a location in a tourism zone, building permits, and, for foreign nationals, a company with foreign investment to collect rent and pay tax. It reports a stricter approach to illegal operators, including audits and deportation.

If a buyer's plan depends on letting the property to tourists, say in writing that the rules are tightening, check the licence position of the specific property and do not use past rental income as a promise.

What did not change

We found no report of a change in 2026 to the basic rules: a foreigner cannot hold freehold land and may hold a right of use, a building right through a foreign-invested company or a lease. The sources are broker and law-firm pages, so check the current position with the notary. The title routes are described in the client-checks briefing.

Costs at closing

The acquisition duty of up to 5 percent of the value above a local threshold, the seller's income tax of 2.5 percent and the notary's fees are described in the payments briefing. We found no report of a change in these in 2026, but the duty is set and collected locally, so ask the notary for the figure that applies in the regency where the land lies. Give that figure to the buyer in writing before the reservation.

Residence and visas

One broker source says a second home visa and a golden visa have made the right of use more relevant for residents. We could not confirm the details, so do not market a property purchase as a way to obtain a visa and ask the buyer to check the immigration rules with an Indonesian immigration lawyer.

Nominee arrangements

A single source claims that a provincial regulation in 2026 made nominee agreements a criminal matter in Bali. We could not confirm it. Whether or not it is true, the legal risk of a nominee structure is the same as before, and the safer course is to refuse it.

What to do with this

• stop selling small-hotel plans to foreign-owned companies without a lawyer's confirmation
• add a line to your buyer notes saying that the short-term rental rules are tightening
• ask for written zoning confirmation before any land sale
• keep a record of what you told each buyer about the title and about rentals

Working with D.H. Realting

D.H. Realting is a trilingual (Russian, English, Polish) overseas-property platform. We introduce buyers, including expats and cross-border buyers, and support the process. Agencies that handle the deal locally and want to be introduced to such buyers can contact us through our partners page.

This briefing is informational only and is not legal, tax or investment advice. Facts were checked on 12 October 2026 from the sources named in the text; rules change, so confirm with a local lawyer before relying on any point.