In Indonesia, land ownership laws are structured to protect the rights of its citizens while fostering opportunities for foreign investment. At Villa Ventures, we work within these frameworks to ensure transparency, sustainability, and respect for the local culture and community. Here’s how we approach land ownership, operations, and our commitment to benefiting the local Balinese community.
Understanding Land Ownership Rights in Indonesia
Indonesia recognizes several types of land titles, each with distinct purposes:
- Sertifikat Hak Milik (SHM) – Freehold Title
SHM is the strongest form of land ownership, reserved exclusively for Indonesian citizens. Even Indonesian-based or foreign-owned companies (PT PMAs) cannot acquire this title, ensuring land remains in the hands of Indonesians.
- Sertifikat Hak Guna Bangunan (SHGB) – Right to Build Title
SHGB allows companies, including PT PMAs, to acquire freehold land for development and operations for up to 80 years (renewable). It’s the ideal solution for businesses, balancing local ownership and business opportunities.
SHGB allows businesses, including PT PMAs, to acquire land for development and operations for up to 30 years, with the option to renew for an additional 20 years at a time, totaling up to 80 years. Renewal involves submitting an application to Indonesia’s National Land Agency (BPN), ensuring compliance with current regulations, proof of ongoing land use, and payment of renewal fees. Starting the process 2-3 years before the expiration is advised to avoid disruptions.
- Leasehold Agreements
Common among foreign individuals, leasehold titles typically span 25-30 years with options to extend. However, these agreements carry risks like renewal uncertainties and dependency on the landowner.
At Villa Ventures, we secure freehold land with SHGB titles, giving us secure development rights while allowing us to lease properties to investors, creating a win-win model for all stakeholders.
Why We Operate as a Formal Entity
Running a large-scale property business as a sole proprietor can lead to issues with compliance, transparency, and trust. Here’s why structuring as a PT or PT PMA is critical for us:
- Transparency and Trust
A formal entity ensures clear tax and financial reporting, avoiding scrutiny from tax authorities. It also reassures investors, partners, and clients that operations are conducted ethically and professionally.
- Professionalism and Organization
Structuring as a PT or PT PMA reflects professionalism and enables us to establish robust management, marketing, and operational strategies essential for scaling our business.
- Asset Protection
Sole proprietorship exposes personal assets to business risks, which is especially problematic for high-value properties. A formal structure separates personal and business liabilities, offering greater security.
By adhering to these standards, we ensure every Villa Ventures project is compliant, and built to last.
A Commitment to Local Communities
Critics may question whether property development only benefits investors while taking land from locals. At Villa Ventures, giving back to the local community is central to our mission. Here’s how we ensure our developments uplift Balinese families:
– Prioritizing Local Employment
Our operational teams are predominantly composed of Balinese locals. Beyond this, when we purchase land, we make a promise to the landowners: we prioritize their families for employment at our resorts. Whether they’re skilled as guest relations officers, front desk associates or restaurant operations manager, we create opportunities tailored to their expertise.
– Paying Back to the Community
The revenue we generate isn’t just shared with investors. We allocate funds to support the local community’s needs, cultural celebrations and infrastructure. This commitment is clearly outlined in our agreements with investors, ensuring a fair distribution of profits back to Bali.
Why We Choose SHGB Titles
While we cannot hold SHM (freehold) titles as a business, we secure SHGB titles for freehold land to ensure long-term development rights. This model allows us to become direct landowners, which eliminates the risks associated with leaseholds. Importantly, our agreements with local landlords include respect for their land and family well-being.
Our investors leasehold the properties from us, but we ensure the benefits of these developments ripple through the community. From job creation to supporting local communities, our model is designed to balance profitability with social responsibility.
At Villa Ventures, we’re not just building properties—we’re building trust, opportunity, and legacy. By operating transparently, respecting local laws, and prioritizing the Balinese community, we’re creating a development model that supports one another and is transparent.
Investing in Bali isn’t just about financial returns; it’s about making a meaningful, lasting impact. That’s the promise we bring to every Villa Ventures project.