The Bali Provincial Government is drafting a regional regulation (Perda) to address the widespread practice of foreign nationals (WNA) illegally renting out villas without proper permits.
The so-called nominee system involves an agreement in which an Indonesian citizen (nominee) lends their name to represent a foreign investor (beneficial owner). This practice has enabled foreign ownership of properties in Bali through legal loopholes.
Deputy Governor Pushes for Completion in 2025
Bali’s Deputy Governor, I Nyoman Giri Prasta, stated that he aims for the regulation to be finalized by the end of 2025.
“Hopefully, we can get this done within the year. We need to act on this as soon as possible,” Giri said at the Bali Provincial Tourism Office on Thursday, 6 March 2025.
Addressing Contract Marriages and Hidden Transactions
The proposed regulation seeks to curb various strategies used by foreign nationals to gain control over Bali’s properties. This includes the practice of contract marriages with Indonesian citizens, a method that has become increasingly common.
According to Giri, some Indonesians are reportedly being paid up to Rp2 billion to enter into contract marriages, allowing foreign nationals to invest and conduct business in Bali under their names.
“With this Nominee Perda, we can take action against all of this, including contract marriages. Some of our citizens are being paid Rp500 million, Rp1 billion, even Rp2 billion just to enter these agreements, allowing foreigners to conduct transactions and investments,” he explained.
The Bali Media has made no independent verification of Giri’s claim about contract marriage payment.
According to Giri, another concerning practice is the use of secretive transactions, often conducted through specific applications like WeChat, which makes monitoring these dealings difficult. This has ultimately facilitated the establishment and operation of unlicensed villas across the island.
Strengthening Law Enforcement Against Illegal Villas
Giri further emphasized that many of these illegal investments involve amounts below Rp5 billion, categorizing them as small-scale foreign investments. The regulation is expected to provide law enforcement with a legal basis to take action against illegally operated villas in Bali.
“Without this regulation, law enforcement agencies (APH) cannot take action against foreign direct investments (PMA), let alone illegal villas,” Giri stated.
“We must implement this to ensure firm measures are taken so that foreign tourists comply with regulations while in Bali,” he concluded.
