DENPASAR – The Bali Provincial Government is drafting a Nominee Regional Regulation (Perda Nominee) to curb the growing trend of foreign nationals (WNA) illegally leasing villas in Bali. The regulation aims to close loopholes that allow foreigners to own and operate properties through nominee agreements.

Nominee agreements involve an Indonesian citizen (WNI) lending their name to a foreigner (beneficial owner) to bypass property ownership restrictions.

Bali Deputy Governor I Nyoman Giri Prasta stated that he aims to finalize the regulation by 2025 to tackle various foreign ownership schemes, including contract marriages used to gain property rights.

“We hope to implement this regulation this year. We must act swiftly,” Giri stated at the Bali Tourism Office on Thursday.

Contract Marriages as a Property Ownership Loophole

Giri revealed that some Indonesians are paid up to IDR 2 billion to engage in contract marriages with foreigners, allowing them to legally invest in Bali’s property market.

“Through the Nominee Regulation, we will address all illegal schemes, including contract marriages. Some citizens are paid IDR 500 million, IDR 1 billion, or even IDR 2 billion to engage in contract marriages and facilitate property transactions,” he explained.

Additionally, secret transactions via apps like WeChat allow foreigners to discreetly acquire and operate unlicensed villas without oversight.

Targeting Illegal Foreign Investment in Bali

Giri emphasized that many foreign investments in Bali are below IDR 5 billion, classifying them as small-scale businesses, which the new regulation aims to monitor more closely.

He stressed that law enforcement authorities (APH) currently lack the legal foundation to take action against foreign-owned illegal villas.

“Without this regulation, authorities cannot act against foreign investments or illegal villas,” Giri stated.

The Bali government hopes that enforcing the Perda Nominee will establish stricter control over foreign nationals operating businesses in Bali, ensuring compliance with local laws.

“We must take decisive action to ensure that foreign tourists and investors follow the rules in Bali,” Giri concluded.