PP 28/2025 Explained: What Changed for Foreign Property Buyers in Bali

Last updated: February 2026 · By Bali Property Rules Research Desk

Table of Contents

1. What Is PP 28/2025 and Why Does It Matter?
2. How Does PP 28/2025 Fit Into Indonesia’s Property Law Framework?
3. What Changed for Hak Pakai (Right to Use) Under PP 28/2025?
4. How Does the OSS (Online Single Submission) System Affect Property Licensing?
5. What Are the New Minimum Property Value Thresholds?
6. How Does PP 28/2025 Affect PT PMA Property Ownership?
7. What Changed for Hak Sewa (Leasehold) Arrangements?
8. How Does PP 28/2025 Compare to PP 18/2021 and PP 103/2015?
9. What Do Foreign Buyers Need to Do Differently After PP 28/2025?
10. Frequently Asked Questions
11. Sources & Legal References

What Is PP 28/2025 and Why Does It Matter?

PP 28/2025 (Peraturan Pemerintah No. 28 Tahun 2025) is an Indonesian Government Regulation that overhauls risk-based business licensing across multiple sectors, including property. It implements key provisions of the Omnibus Law on Job Creation (UU Cipta Kerja) and updates the licensing framework first established by PP 18/2021. For foreign property buyers in Bali, it changes how permits and licenses are processed — not what you can own.

The regulation’s full Indonesian title is Peraturan Pemerintah tentang Perizinan Berusaha Berbasis Risiko — Government Regulation on Risk-Based Business Licensing. The “risk-based” approach classifies business activities by their risk level (low, medium, or high) and applies proportionate licensing requirements. Property-related activities fall under this framework when they involve commercial use, rental operations, or corporate ownership structures.

Why does this matter for foreign buyers? Before PP 28/2025, the licensing process for property-related activities — particularly those involving PT PMA companies — required navigating multiple government agencies with inconsistent requirements. The regulation consolidates much of this into Indonesia’s Online Single Submission (OSS) system, aiming for faster processing and clearer requirements.

However, it is critical to understand what PP 28/2025 does not do. It does not create new ownership rights for foreigners. It does not allow foreigners to hold Hak Milik (freehold). It does not override the foundational restrictions in the Basic Agrarian Law (UUPA No. 5/1960). The regulation is a procedural and administrative reform — significant for efficiency, but not a fundamental shift in who can own what.

How Does PP 28/2025 Fit Into Indonesia’s Property Law Framework?

PP 28/2025 is the latest in a series of government regulations that progressively updated Indonesia’s property licensing system under the Omnibus Law. It builds on PP 18/2021, which first adapted the land rights framework to the Omnibus Law, and operates within the boundaries set by the UUPA No. 5/1960 — the foundation of all Indonesian land law.

Understanding how these regulations relate to each other is essential. Indonesia’s property law is layered: the UUPA provides the constitutional foundation, Government Regulations (PP) implement specific aspects, and Ministerial Regulations (Permen) provide detailed procedures. Each new PP refines or updates the layer above it without replacing the foundation.

The key milestones in this framework are:

• UUPA No. 5/1960 — Establishes that Hak Milik (freehold) is reserved for Indonesian citizens only. Article 26(2) declares that any transfer designed to circumvent foreign ownership restrictions is “null and void by law.” This remains the bedrock of all property restrictions on foreigners.
• PP 103/2015 — The first regulation specifically addressing foreign residential property ownership. It established that foreigners with valid residence permits (KITAS/KITAP) could hold residential property under Hak Pakai. It set the initial framework for minimum value thresholds and the conditions under which foreigners could own.
• Permen ATR/BPN 29/2016 — The implementing regulation for PP 103/2015. This ministerial regulation provides the detailed procedures for granting Hak Pakai to foreigners, including application requirements, documentation, and the forced divestment mechanism. It remains in effect and still governs the day-to-day procedures at land offices (BPN).
• PP 18/2021 — Issued under the Omnibus Law on Job Creation (UU Cipta Kerja), this regulation updated the broader land rights framework including Hak Pakai, HGB (Right to Build), and strata title provisions for foreigners. It confirmed the 30+20+30 year Hak Pakai duration and expanded provisions for apartment and strata ownership.
• PP 28/2025 — Updates the risk-based licensing system for all business activities, including property-related licensing. It streamlines the OSS framework and clarifies how property licensing integrates with the digital permit system.

The important takeaway: PP 28/2025 does not replace the earlier regulations. PP 103/2015 and Permen ATR/BPN 29/2016 still govern the specific conditions and procedures for foreign Hak Pakai ownership. PP 28/2025 adds a layer of licensing reform on top of the existing property rights framework.

What Changed for Hak Pakai (Right to Use) Under PP 28/2025?

The Hak Pakai entitlement itself — including the maximum 80-year duration (30+20+30 years) and the residency requirement — did not change under PP 28/2025. What changed is how the licensing and permit process for property-related activities integrates with the government’s digital OSS system. The core rights and restrictions established by PP 103/2015 remain intact.

This is an important distinction that is frequently misunderstood. Media coverage of PP 28/2025 sometimes implies broader changes to foreign ownership rights. In practice, the regulation’s impact on individual Hak Pakai holders is primarily procedural:

• Duration unchanged: Hak Pakai is still granted for an initial 30-year period, renewable for 20 years, and extendable for a further 30 years — totaling 80 years maximum. This structure was confirmed by PP 18/2021 and has not been altered.
• Residency requirement unchanged: Foreigners must hold a valid KITAS or KITAP to be eligible for Hak Pakai. The Second Home Visa also qualifies. If your residence permit expires, the forced divestment provisions under Permen ATR/BPN 29/2016 still apply.
• Detailed procedures unchanged: Permen ATR/BPN 29/2016 still governs the specific requirements for applying, obtaining, and renewing Hak Pakai at the land office (BPN). PP 28/2025 does not supersede this ministerial regulation.
• What did change: Where property-related activities require business licensing — such as operating a rental property or holding property through a company structure — the licensing process now falls under the updated OSS risk-based framework. This affects the administrative pathway, not the property right itself.

For an individual foreigner purchasing a residential property under Hak Pakai for personal use, the practical impact of PP 28/2025 is minimal. The change is more significant for those using corporate structures (PT PMA) or engaging in property-related business activities that require separate licensing.

For a detailed explanation of how visa status affects your Hak Pakai, see our guide: What Happens to Your Bali Property If Your Visa Expires?

How Does the OSS (Online Single Submission) System Affect Property Licensing?

The OSS (Online Single Submission) system is Indonesia’s centralized digital platform for business licensing. Under PP 28/2025, all business licensing — including property-related permits for rental operations, commercial use, and corporate property holding — must be processed through OSS. This replaces the previous process of applying separately at multiple government agencies.

The OSS system was first introduced under Government Regulation No. 24/2018 and has been progressively updated. PP 28/2025 represents the latest iteration, refining the risk-based classification system and expanding the scope of activities processed through the platform.

How the risk-based classification works for property:

• Low risk: Activities that require only a Business Identification Number (NIB) — no additional permits needed. Simple property holding may fall into this category.
• Medium risk: Activities that require a NIB plus a Standard Certificate (Sertifikat Standar). Property rental operations with certain capacity thresholds may fall here.
• High risk: Activities that require a NIB plus a formal Permit (Izin). Large-scale commercial property development typically requires full permitting.

For foreign buyers, the practical interaction with OSS depends on how you structure your ownership:

• Individual Hak Pakai for personal use: You are unlikely to interact directly with the OSS system. The Hak Pakai application process at BPN remains governed by Permen ATR/BPN 29/2016.
• PT PMA holding property: The company’s business licensing — including its NIB and any sector-specific permits — is processed through OSS. PP 28/2025 streamlines this process.
• Rental or commercial operations: If you operate a villa rental, pondok wisata (guesthouse), or other accommodation business, the business licenses are obtained through OSS under the risk-based framework.

The key benefit of the OSS system is consolidation. Previously, a PT PMA operating a rental villa might need to coordinate licensing across the Investment Coordinating Board (BKPM), the Ministry of Tourism, local government offices, and other agencies. The OSS system brings these into a single digital platform with standardized timelines. Practitioners report that this has reduced processing times in many cases, though implementation varies by region.

What Are the New Minimum Property Value Thresholds?

Indonesia maintains minimum property value thresholds for foreign ownership under Hak Pakai. These thresholds vary by province and property type, and they are updated periodically by ministerial regulation. PP 28/2025 does not set the specific threshold amounts — those are determined by separate implementing regulations — but it maintains the framework requiring minimum values as a condition of foreign ownership.

The minimum value thresholds were first established under PP 103/2015 and its implementing regulations. The purpose is to ensure that foreign property ownership is directed toward higher-value properties, preventing foreign speculation on low-cost housing that serves the domestic market.

Key points about the threshold system:

• Provincial variation: Threshold amounts differ between provinces. Bali, Jakarta, and other high-demand areas typically have higher minimums than less developed regions. This reflects the varying property markets across Indonesia’s diverse geography.
• Property type distinction: Thresholds may differ between landed houses (rumah tinggal) and apartment or strata units (sarusun). Apartment units generally have lower thresholds than landed properties.
• Periodic updates: The specific amounts are updated through ministerial decisions and may change as market conditions evolve. Any threshold figure published online may be outdated by the time you read it.
• Verification requirement: When applying for Hak Pakai, the land office (BPN) will verify that the property’s assessed value meets or exceeds the applicable threshold for its province and type.

For a full breakdown of what you will pay beyond the purchase price — including taxes, notary fees, and legal costs — see our guide: Bali Property Costs for Foreigners.

How Does PP 28/2025 Affect PT PMA Property Ownership?

PT PMA (foreign-owned Indonesian company) structures benefit most directly from PP 28/2025. The regulation streamlines the business licensing process for PT PMA companies through the OSS system, making it faster and more standardized to obtain the NIB, investment licenses, and sector-specific permits required for a company to hold and operate property in Indonesia.

A PT PMA can hold property under HGB (Hak Guna Bangunan — Right to Build) or Hak Pakai as a legal entity. Unlike individual foreign ownership, the company’s property rights are not tied to any individual’s immigration status — the company is an Indonesian legal entity and holds title independently of its shareholders’ nationalities.

PP 28/2025’s impact on PT PMA property structures includes:

• Simplified licensing: The company’s NIB (Nomor Induk Berusaha — Business Identification Number) is obtained through OSS. This number serves as the company’s primary business identity and is required for all subsequent licensing activities.
• KBLI classification: Property-related business activities must be classified under the correct KBLI (Klasifikasi Baku Lapangan Usaha Indonesia — Indonesian Standard Industrial Classification) codes. The OSS system uses these codes to determine which risk category applies and what additional permits are needed.
• Risk-based streamlining: Depending on the KBLI classification and the scale of the property activity, the company may need only a NIB (low risk) or a NIB plus additional certificates or permits (medium or high risk). This replaces the previous system where multiple agency approvals were needed regardless of scale.
• Investment compliance: PT PMA companies must still meet minimum investment thresholds set by the Investment Coordinating Board (BKPM). The company must maintain compliance with its investment plan and reporting obligations.

The Company Law (UU 40/2007) continues to govern the corporate structure, share ownership, and governance requirements for all PT PMA entities. PP 28/2025 does not modify corporate law — it modifies the licensing pathway.

For foreign buyers considering a PT PMA structure, the practical effect is that the company setup and licensing process has become more predictable. However, the costs and compliance obligations remain substantial — a PT PMA is not a casual structure and should be established only with qualified legal and tax advice.

For a step-by-step breakdown of PT PMA setup, capital requirements, and costs, see our guide: PT PMA Bali Property: Capital and Setup Guide.

What Changed for Hak Sewa (Leasehold) Arrangements?

PP 28/2025 has minimal direct impact on Hak Sewa (leasehold) arrangements. Hak Sewa is a contractual right governed primarily by PP 44/1994 and general contract law, not by the business licensing framework. Since Hak Sewa is not a registered land title and does not require BPN registration, the OSS and risk-based licensing changes under PP 28/2025 do not directly affect lease agreements.

Hak Sewa remains the most accessible property structure for foreigners in Bali. Any foreigner — regardless of visa type — can enter a leasehold agreement. The lease is typically notarized and may be registered at the local village (desa) office, but it is not recorded at BPN and does not appear on the land certificate.

Where PP 28/2025 may have an indirect effect on leasehold arrangements:

• Business operations on leased property: If you lease a villa and operate it as a rental business, the business licensing for that operation falls under the OSS risk-based framework. The lease itself is unaffected, but the business you run on the property requires licensing under PP 28/2025.
• Pondok wisata (guesthouse) licensing: Operating a pondok wisata on leased property requires a tourism business license, which is now processed through OSS. PP 28/2025 clarifies the risk classification for these activities.
• Landlord compliance: Indonesian landowners who lease property to multiple foreigners as a business activity may face updated licensing requirements under the risk-based framework. This is a landlord obligation, not a tenant obligation, but it could affect the availability and terms of lease agreements.

For most foreign buyers who hold Hak Sewa for residential or investment purposes, PP 28/2025 does not require any action regarding the lease itself. The regulation’s impact is concentrated on the business licensing layer that sits above the property right.

For a detailed explanation of how leasehold agreements work, including contract clauses and renewal risks, see our guide: Bali Leasehold (Hak Sewa) Guide for Foreign Buyers.

How Does PP 28/2025 Compare to PP 18/2021 and PP 103/2015?

PP 28/2025 focuses on business licensing procedures, while PP 18/2021 addresses land rights and titles, and PP 103/2015 specifically governs foreign residential ownership conditions. They operate in different domains but form an interconnected regulatory framework. Understanding how they differ is essential to avoid misinterpreting what PP 28/2025 changed.

The evolution of Indonesia’s foreign property regulation framework:

The critical distinction: PP 103/2015 and PP 18/2021 define what foreigners can own and under what conditions. PP 28/2025 defines how business licensing related to property is processed. They answer different questions:

• PP 103/2015: “Can I, as a foreigner, own this property?” — Yes, under Hak Pakai, with a valid residence permit, above the minimum value threshold.
• PP 18/2021: “How long can I hold this property?” — Up to 80 years (30+20+30). Also covers strata and apartment ownership.
• PP 28/2025: “How do I get the business licenses for my property company or rental operation?” — Through the OSS system, under the risk-based framework.

For a practical decision matrix comparing how these ownership structures — Hak Pakai, leasehold, and PT PMA — differ in cost, duration, risk, and suitability, see our foreign ownership comparison guide.

What Do Foreign Buyers Need to Do Differently After PP 28/2025?

For most individual foreign buyers purchasing under Hak Pakai for personal use, the practical changes are minimal. The same requirements apply: valid residence permit, property above the minimum value threshold, and application through the local land office (BPN). The significant changes affect those using PT PMA structures or operating property-related businesses, who now interact with the updated OSS licensing system.

Specific actions to consider based on your situation:

If you are buying under individual Hak Pakai

• The process at BPN remains governed by Permen ATR/BPN 29/2016. No immediate changes to your application process.
• Confirm that your property meets the current minimum value threshold for the applicable province. Ask your PPAT to verify this before proceeding.
• Ensure your KITAS or KITAP is valid and will remain valid through the purchase process.
• Continue to work with a qualified PPAT (notary) who is familiar with foreign buyer procedures at the local BPN office.

Before signing anything, work through a systematic verification process. Our Bali Property Due Diligence Checklist covers the 20 steps practitioners recommend. Once you own the property, annual tax obligations begin immediately — PBB, potential rental income tax, and BPHTB at acquisition. See our property tax guide for the full breakdown by ownership structure.

If you are setting up or operating a PT PMA

• All business licensing now goes through the OSS system. If you are establishing a new PT PMA, your legal counsel should process the NIB and investment licenses through OSS.
• Ensure your KBLI codes accurately reflect your intended property activities. Incorrect classification can cause licensing delays or compliance issues.
• If your existing PT PMA has licenses issued under the previous system, verify with your legal counsel whether any licenses need to be migrated or updated under the new OSS framework.
• Annual compliance and reporting obligations remain — the OSS system does not eliminate these requirements.

If you operate a rental or tourism business

• Tourism business licenses (izin usaha pariwisata) are processed through OSS under the risk-based framework.
• Pondok wisata and villa rental operations should verify their risk classification and ensure appropriate licensing.
• Local regulations (peraturan daerah) may impose additional requirements beyond the national OSS framework — consult with local authorities or a legal advisor familiar with Bali-specific regulations.

For every license, permit, and tax registration required to legally rent out a villa in Bali, see our guide: Bali Short-Term Rental Compliance for Foreigners. For the specific licensing types — including when you need a Pondok Wisata license versus a full villa license — see our villa licensing guide.

Indonesia’s new tourism law (UU 18/2025) introduces additional requirements for tourism businesses — see our analysis: UU 18/2025: What Indonesia’s New Tourism Law Means for Foreign Property Investors.

For all foreign buyers

• Do not rely on nominee agreements. PP 28/2025 does not change the legal prohibition on nominee ownership. Article 26(2) of the UUPA still renders such arrangements “null and void by law.” For a detailed explanation, see our guide: Why Nominee Ownership in Bali Is Illegal.
• If you plan to build or develop, check current construction restrictions. Bali’s ongoing construction moratorium affects multiple districts — especially in South Bali where most foreign investment is concentrated.
• Work with professionals who are up to date on the latest regulations. Property law in Indonesia evolves frequently, and the interaction between national regulations and local implementation can vary.

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