Investing in Bali through a French company or holding company: what you need to know

With Bali’s growing appeal for French-speaking investors, many are asking whether they can use a French company or holding company to invest there, particularly in property or in commercial activities. Between local specifics, Indonesian regulation and the choice of the most suitable structure, it is essential to understand the rules of the game. Here is what a director or an informed investor absolutely needs to master before setting out on a venture in Bali.

What restrictions apply to foreign investment in Bali?

Bali remains subject to Indonesian law, which draws a clear distinction between local nationals and foreign investors as regards access to land and to economic activities. The classic route of acquiring through a French company cannot therefore be transposed without particular precautions.

Indonesian law formally prohibits full ownership (hak milik) for any foreign individual or legal entity. The solutions then involve specific legal structures (such as a PT PMA) in order to provide security and compliance for the investor.

A holding company or a French company: what are the possibilities for investing in Bali?

The idea of a French company owning or operating directly in Bali looks attractive, but it meets two major limits. On the one hand, foreign companies cannot acquire land rights in Indonesia without complying with specific approvals. On the other, only PT PMA status (Penanaman Modal Asing) truly opens the way to direct investment.

Two main models exist for investing in Bali in a structured way: a local structure through a PT PMA held by a French company or holding company, or acquisition and operation in your own name, often under the leasehold regime.

How does a PT PMA work for a foreign investor?

Definition and role of a PT PMA

A PT PMA is a limited liability company recognised by Indonesia as owned wholly or partly by foreign capital. It makes it possible to gain lawful access to certain types of commercial activity and to indirect holding of property through an HGB.

For a French investor, this structure offers the possibility of channelling funds, managing the investment, and even operating a hotel or rental project directly. It is common for a French holding company to hold the shares in the PT PMA, thus centralising asset management from France while complying with local regulation.

Limits and obligations of a PT PMA held by a French company

Opening a PT PMA involves several steps: investment authorisations, a corporate purpose permitted by the investment list in force, and capital set by the regulation applicable at incorporation. The amount is confirmed before registration. The foreign shareholder company must demonstrate the traceability of the funds and comply with certain important reporting obligations.

Restrictions exist on the proportion of foreign ownership depending on the business sector, together with an obligation of annual reporting to the Indonesian authorities and regular audit for certain activities. It is also important to refer to the official public finance bulletin: BOFiP — France–Indonesia tax treaty. Dividends remain subject to the foreign-exchange rules and to the withholdings provided for, on the Indonesian side as on the French side.

Comparison of investing in your own name, by leasehold, and through a company

Leasehold and hak pakai: common solutions for non-residents

The model most widespread among private individuals is hak sewa. Its term is that of the contract, and renewal exists only if it is written down. This contract does not stand in place of an operating licence.

Hak pakai, available only to natural persons, allows long-term occupation with broader rights of use (including on succession), but does not confer full ownership, which is reserved for Indonesian citizens.

Investing through a company or holding company versus investing as an individual

Using a PT PMA held by a French company makes tax structuring and the pooling of ambitious projects easier, while offering stronger security for a commercial operation (tourist letting, hotel management). This solution mainly attracts directors who want to make an activity last and to repatriate profits lawfully.

By contrast, a hak sewa may suit personal enjoyment. A rental operation, even an occasional one, requires the licences for the activity. The lease does not replace them. Renewal is checked in the contract.

HGB, shareholding and tax specific to Bali

Within a PT PMA, it is possible to obtain an HGB, held by the company and not by the foreign individual. On state land, Government Regulation No. 18 of 2021 caps it at 30 years, then at an extension of up to 20 years and a renewal of up to 30 years. This is not a single 80-year title, and each stage must be applied for.

The shares in the PT PMA can be held by different investors, including one or more French companies, making it possible to keep effective control over the property asset and to make its later transfer or assignment easier.

• PT PMA: gives access to an HGB and makes it possible to invest in property or in commercial activities
• French company or holding company: holds the shares, simplifying overall asset management
• Leasehold and hak pakai: available to private individuals, less flexible for large-scale operations
• Compliance with local obligations: essential in order to secure financial flows and guarantee regulatory compliance

Rental management, dividends and financial flows: operational constraints

A professional rental activity in Bali requires not only that the holding of the property be lawful, but also that the appropriate licences be obtained, in particular for short-term letting. A company, such as a PT PMA, thus provides a framework better suited to letting lawfully to travellers, paying dividends and transferring the financial results.

The treatment of a transfer of profits abroad depends on the structure, on the nature of the sums and on the applicable rules. No withholding rate is stated here.

France–Indonesia tax: key points to anticipate

Local tax in Bali

The treatment of income of a PT PMA, and then of sums paid to a holding company, depends on the structure, on the nature of the income and on the applicable provisions. No rate is stated here. The France–Indonesia treaty does not make relief from double taxation automatically secured.

Specific taxes also exist on short-term letting, on the disposal of assets or on the distribution of profits to foreign holders. Each flow can trigger a distinct levy, always to be checked when the structure is put in place.

Tax consequences in France

The upstreaming of dividends from an Indonesian subsidiary to a French holding company can give rise to tax at the level of the holding company. The treatment depends in particular on the structure, on the nature of the income and on the applicable tax provisions. A tax credit is not automatically applicable.

Take care: an international investment does not guarantee automatic tax optimisation. Anti-fraud controls between France and Indonesia are very strict: any omission or lack of knowledge engages the taxpayer’s liability.

Comparison of the main investment options in Bali for a foreign investor:

FAQ: frequently asked questions on investing through a French company in Bali

Can you buy an apartment in Bali directly through a French holding company?

No. Indonesian law does not recognise a direct right of ownership for foreign companies. Only certain structures through a PT PMA make this possible, subject to compliance with local regulation.

What are the concrete advantages of going through a PT PMA rather than a leasehold?

A PT PMA may be suitable when the activity and the regulation allow it. It does not, on its own, simplify the distribution of dividends. A hak sewa is not reserved for private use. Nor is it, on its own, an authorisation for a tourism operation.

Can a French company operate a villa in Bali?

Yes, but only if it holds a local PT PMA that manages the property asset and holds the necessary licences. The operation must meet the requirements of the Indonesian authorities, and holding a lease or a property is not enough to act lawfully.

How is income from a property investment made from France into Bali taxed?

The treatment of the income, in Indonesia and then on a transfer to France, depends on the structure, on the nature of the sums and on the applicable provisions. It cannot be deduced from a single mechanism.

Outlook for French investors considering Bali

Structuring an investment in Bali through a French company or a holding company requires careful preparation and adaptation to a legal environment very different from European standards. Support from experts who know both French tax and Indonesian regulation remains essential in order to secure each stage.

Bali continues to attract foreign investors who want to diversify their assets. Those who take the time to compare a local structure, a leasehold and the tax implications will find lasting opportunities, suited to their profile and compliant with both legal systems.