Thailand vs Bali: Foreign Property Ownership Compared (2026 Guide)

Foreign Property Ownership in Southeast Asia: Thailand and Indonesia Compared

The question “Can I actually own this?” is the first thing every international investor asks before committing capital to property in Southeast Asia. The answer depends entirely on which country and which ownership structure you choose.

Thailand (Phuket, Koh Samui) and Indonesia (Bali) are the two most popular villa investment destinations in the region. Both welcome foreign investment, but they offer fundamentally different ownership frameworks with different levels of security, flexibility, and long-term protection.

This guide provides a complete, honest comparison of how foreign property ownership works in each country as of 2026. It covers legal structures, practical realities, tax implications, inheritance planning, and exit strategies. As a developer operating in both Thailand and Bali, SKHAI structures every transaction to maximize investor protection under each country’s legal framework.

Quick Comparison: Ownership Structures at a Glance

Ownership Type	Thailand	Bali (Indonesia)
Freehold by Foreign Individual	Condos only (49% quota)	Not available
Leasehold	30 + 30 + 30 years (registered)	25 – 30 years + extensions
Company Ownership (Freehold Land)	Thai Co. Ltd. (established structure)	PT PMA (HGB, not freehold land)
Right to Use	Usufruct (30 years, once renewable)	Hak Pakai (25+25+30 years, residential only)
Foreign Freehold Land	Not available (foreigners cannot own land)	Not available (no path)

Thailand: Foreign Ownership in Detail

Option 1: Freehold Condominium

Thailand is unique in Southeast Asia in offering genuine freehold ownership to foreigners — for condominium units. Under the Condominium Act B.E. 2522 (1979), foreigners can own up to 49% of the total floor area of any registered condominium building in their personal name.

What this means in practice:

• Your name is on the title deed (Chanote)
• No expiry date, no renewals needed
• Full inheritance rights — can be passed to heirs
• Can be sold, mortgaged, or transferred freely
• Registered at the Land Office with government-backed title

Limitation: This applies only to condominiums, not to houses or villas with land. For villa investments, other structures are needed.

Option 2: Registered Leasehold (30 years, renewable)

The most common structure for foreign villa investors in Thailand. A 30-year lease is registered at the Land Office, with contractual options for two additional 30-year terms (90 years total).

Key points:

• The initial 30-year lease is registered at the Land Office and protected by Thai law
• Renewal options (the +30+30) are contractual commitments in the lease agreement. They are legally binding between the parties but not automatically registered at the Land Office until exercised
• The lessee has full use, modification, and subletting rights as specified in the lease
• The lease can typically be transferred or assigned (subject to lease terms)
• Registration fee: 1% of the lease value for the registered 30-year term

SKHAI’s approach: All SKHAI villa leases include registered 30-year initial terms with contractual 30+30 renewal options, drafted by specialist property lawyers with the renewal obligations binding on all future owners of the freehold land.

Option 3: Thai Company Structure

A Thai Limited Company can legally hold land only if it is a genuine Thai-majority business; using Thai shareholders as nominees to hold land for a foreigner is illegal and actively enforced. SKHAI does not use or recommend this route. The foreign investor is typically a director and minority shareholder (49%), with Thai shareholders holding 51%. The investor maintains effective control through director powers, voting rights, and contractual arrangements.

Key points:

• The company holds freehold title (Chanote) to the land
• The investor controls the company as director with broad management powers
• The 51% Thai shareholding must be structured with genuine Thai shareholders (not nominees)
• Annual compliance required: financial statements, tax filings, shareholder meetings
• Ongoing professional costs: $1,500-$3,000/year for accounting and compliance

Important: Thai authorities have increased scrutiny of “nominee” arrangements where Thai shareholders have no genuine economic interest. Proper structuring with legitimate Thai shareholders and appropriate corporate governance is essential.

Option 4: Usufruct

A usufruct grants the right to use and benefit from another person’s property. It can be registered at the Land Office for up to 30 years (or for the lifetime of the usufructuary, whichever is shorter).

• Often used in combination with a lease for additional protection
• Registered at the Land Office
• Survives sale of the underlying land
• Cannot be inherited (terminates on death of holder) but can be combined with other structures

Bali (Indonesia): Foreign Ownership in Detail

Option 1: Leasehold (Hak Sewa)

The most common and straightforward structure for foreign villa investors in Bali. The investor enters into a lease agreement (Hak Sewa) with the Indonesian freehold landowner.

Key points:

• Typical terms: 25 or 30 years with extension options
• Not registered at the land office (BPN), but notarized
• The investor has use rights but does not appear on any land title
• Renewal depends on negotiation with the landowner at expiry
• Can be transferred to another party (subject to lease terms)
• Lower upfront cost than other structures

Risk factor: Because the lease is not registered at the national land authority (BPN), disputes can be more complex to resolve. The strength of the lease depends heavily on the notarial deed and the relationship with the landowner.

Option 2: Right to Use (Hak Pakai)

Foreigners holding a valid visa (KITAS or KITAP) can obtain a Right to Use (Hak Pakai) title, which is registered at the land office (BPN).

Key points:

• Maximum term: 25 years + 25 year extension + 30 year renewal = 80 years total
• Registered at BPN (stronger protection than Hak Sewa)
• Limited to residential use — cannot be used for commercial rental operations
• Requires valid Indonesian residence permit (KITAS/KITAP)
• The title is in the foreigner’s name
• Can be inherited by foreign heirs (who must also have valid permits)

Limitation: The residential-only restriction is significant for investment properties intended for short-term rental. Operating a villa rental typically requires a commercial structure (PT PMA).

Option 3: PT PMA (Foreign-Owned Indonesian Company)

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is an Indonesian limited liability company with foreign shareholding, established under the Investment Coordinating Board (BKPM).

Key points:

• Can be 100% foreign-owned (since 2021 Omnibus Law reforms for most sectors)
• Can hold Right to Build (Hak Guna Bangunan / HGB): 30 + 20 + 30 years = 80 years
• HGB allows commercial use, including villa rental operations
• Minimum investment requirements apply (typically $700,000+ for property sector, though structures vary)
• Full corporate compliance required: annual audit, tax filings, reporting to BKPM
• Ongoing costs: $3,000-$6,000/year for compliance

Important: The HGB held by a PT PMA is the strongest form of property control available to foreigners in Indonesia, but it is still a time-limited right (not freehold). The underlying freehold (Hak Milik) remains with the Indonesian landowner or the state.

Side-by-Side: Key Differences That Matter

Factor	Thailand	Bali
Strongest Foreign Title	Freehold condo (permanent)	HGB via PT PMA (80 years max)
Villa/Land Best Case	Company freehold or 90-year lease	80-year HGB or 25-30 year lease
Land Office Registration	Yes (leases over 3 years)	HGB and Hak Pakai only (not Hak Sewa)
Annual Compliance Costs	$1,500-$3,000 (company)	$3,000-$6,000 (PT PMA)
Legal Maturity	Decades of foreign investment precedent	Growing but less established
Reform Risk	Low (stable framework)	Moderate (ongoing regulatory changes)

Tax Implications Compared

Acquisition Taxes

Tax / Fee	Thailand	Bali
Transfer Fee	2% of appraised value	5% BPHTB (buyer)
Stamp Duty	0.5%	Included in transfer
Withholding Tax (Seller)	1% (personal) or 1% (company)	2.5% PPh (seller)
Lease Registration Fee	1% of lease value	N/A (Hak Sewa not registered)

Ongoing Taxes

• Thailand rental income: Progressive rates (5-35% on net income) for individuals. Companies pay 20% corporate income tax. Withholding tax structures can reduce effective rates. Double-taxation agreements with 60+ countries.
• Bali rental income: 10% final tax on gross rental income (Article 4(2) of Income Tax Law). This simplicity is an advantage — no deductions but no complex calculations. PT PMA companies pay 22% corporate tax on net profit (different from the 10% final tax).
• Property tax: Thailand: 0.02-0.1% of assessed value. Bali: 0.1-0.3% of assessed value (PBB).

Inheritance and Succession Planning

Succession is a critical but often overlooked aspect of foreign property ownership.

Thailand

• Freehold condos: can be inherited by foreign heirs (they must not cause the building to exceed 49% foreign ownership)
• Leasehold: depends on lease terms. Well-drafted leases include succession provisions allowing transfer to heirs
• Company shares: can be inherited and transferred, subject to company articles
• Thailand has no inheritance tax for estates under approximately $5 million (150M THB threshold for non-descendants; 100M THB for descendants, with 5% and 10% rates above those)

Bali

• Hak Pakai: can be inherited by foreign heirs who hold valid Indonesian permits. If heirs do not have permits, must be transferred or sold within one year
• Hak Sewa (lease): depends on lease terms. Good leases include assignment-on-death provisions
• PT PMA shares: can be inherited and transferred to foreign heirs
• Indonesia imposes no separate inheritance tax, but transfer taxes may apply

Analysis: Thailand provides more straightforward inheritance paths, especially for freehold condos. In both countries, proper legal structuring at the point of purchase — including succession clauses, wills registered in the local jurisdiction, and appropriate beneficiary designations — is essential.

Exit Strategies: Selling Your Investment

Thailand

• Freehold condos: straightforward sale to any buyer (Thai or foreign within quota). Transfer at Land Office takes days.
• Leasehold villas: assignment of remaining lease term to new buyer. The market is established with precedent.
• Company structure: sale of company shares (which holds the land). Can be structured as a share transfer rather than a property transfer, potentially reducing transfer costs.
• Resale market: well-established with international agencies, online platforms, and local brokers.

Bali

• Hak Sewa (lease): assignment of remaining lease term to new buyer. The remaining term significantly affects value — a lease with 5 years left is worth much less than one with 25 years.
• PT PMA: sale of company shares or sale of the HGB right. More complex and potentially more costly than Thai equivalents.
• Resale market: growing but less liquid than Thailand. Premium properties with proven rental track records sell well.

Analysis: Thailand offers more exit flexibility, especially for freehold condos and company structures. Bali’s resale market is functional but less mature. In both cases, properties with documented rental income histories and professional management command stronger resale prices.

SKHAI’s Ownership Structures

SKHAI structures each transaction based on the investor’s nationality, tax residency, investment goals, and the specific property type. Every purchase includes:

• Independent legal review by a qualified property lawyer in the relevant jurisdiction
• Clear ownership documentation and title verification
• Succession planning guidance
• Ongoing compliance support (for company structures)

For detailed ownership information specific to each destination, download our investment guides:

• Phuket Investment Guide
• Koh Samui Investment Guide
• Bali Investment Guide

Which Country Is Better for Foreign Property Investment?

Thailand is stronger for ownership security. The freehold condominium option has no equivalent in Indonesia. The established leasehold and company structures have decades of legal precedent, and the Land Office registration system provides robust title protection.

Bali is attractive despite ownership limitations. Lower entry prices, strong yields, and rapid capital appreciation can deliver excellent returns within a 25-30 year lease period. The PT PMA route provides up to 80 years of control for investors willing to accept the higher compliance costs.

The best approach depends on your priorities:

• If ownership security is paramount: Thailand
• If capital efficiency and growth potential matter most: Bali
• If you want to diversify across both: SKHAI operates in both markets with structures optimized for each

Frequently Asked Questions

Can a foreigner own freehold property in Thailand?

Yes, for condominium units. Foreigners can own freehold condos in their own name under the Condominium Act, up to 49% of the building’s total floor area. For land and villas, foreigners use leasehold or company ownership structures.

Can a foreigner own freehold property in Bali?

No. Indonesian law reserves freehold land titles (Hak Milik) exclusively for Indonesian citizens. Foreigners use leasehold (Hak Sewa), Right to Use (Hak Pakai), or PT PMA with Right to Build (HGB) — all of which are time-limited rights.

Is a 30-year lease in Thailand secure?

A properly registered 30-year lease at the Land Office is legally enforceable and protected by Thai law. The lease survives sale of the underlying freehold land. Renewal options (the +30+30) are contractual obligations that should be carefully drafted to bind future landowners.

What happens when a Bali lease expires?

The property reverts to the freehold landowner unless an extension has been agreed and executed. Well-structured leases include extension options that are negotiated and documented at the outset. It is critical to understand the extension terms before purchasing.

Do I need a visa to own property in Thailand?

No visa is required to own a freehold condo or to hold a registered lease in Thailand. You can own property as a non-resident. A company structure also does not require the foreign investor to hold a Thai visa, though being a director of a Thai company may have immigration implications.

Do I need a visa to own property in Bali?

For Hak Pakai (Right to Use), yes — you need a valid KITAS or KITAP. For Hak Sewa (lease), no visa is required. For a PT PMA, the foreign directors/shareholders do not necessarily need Indonesian residence, though having one can simplify operations.

Which country has lower transaction costs?

Thailand’s total transaction costs are approximately 6-7% (transfer fee, stamp duty, withholding tax combined). Bali’s total is approximately 7-8% (BPHTB + PPh + notarial fees). Both are competitive by international standards.

Can I use my property as collateral for a loan?

In Thailand, freehold condos can be mortgaged with Thai banks (some banks lend to foreigners). Leasehold rights can also be used as collateral in some cases. In Bali, lending against foreign-held rights is more limited, though some international banks and private lenders offer financing against PT PMA-held properties.

This guide is for informational purposes only and does not constitute legal advice. Property law in both Thailand and Indonesia is subject to change. Always engage a qualified local lawyer before making property investment decisions. SKHAI provides referrals to independent legal advisors in each jurisdiction.

Have questions about ownership structures? Contact us at [email protected] or call +66 65-242-3000.