July 22nd, 2026
PT PMA vs Bali Nominees: One Is Legal, the Other Can Cost You Anything
If you are looking to buy real estate or build a villa in Bali as a foreigner in order to make it profitable on Airbnb or Booking, you will encounter two paths: create a PT PMA, or use a nominee arrangement. It is not a matter of preference. One is legal. The other is not. If you haven't already read our guide on building a villa as a foreigner, start there.
What is a nominee arrangement?
A nominee arrangement is when a foreign buyer places land in the name of an Indonesian citizen. Sounds practical. It's really dangerous. Indonesian law explicitly forbids it. The Constitutional Court ruled that the nominee arrangements were illegal. The nominee can legally claim the land — no Indonesian court will rule in your favor.
What is a PT PMA?
A PT PMA is a foreign-owned limited liability company, registered under Indonesian law — the government's official mechanism for foreign investment. It can legally own land, operate a rental business, employ staff, and open bank accounts. It pays standard Indonesian corporate income tax, with a reduced rate available for small companies.
The real comparison
A foreigner can hold a lease in their personal name — it's legal. But running a short-term rental business in your own name is not. Without a PT PMA, there is no legal mechanism for collecting rental income. For a clear explanation, check out our guide on freehold vs leasehold explained.
The honest answer
Anyone who offers you a nominee arrangement in 2026 is either misinformed or prioritizing their fees over your protection. A PT PMA costs more to create — but it's the only structure that really protects your investment.
