Bali's Land 'Nominee' Practice Risks Tax Losses and Legal Disputes, Expert Warns

On November 7, 2026, Dr. I Made Pria Dharsana, a land law expert and notary based in Badung Regency, Bali, told RRI.CO.ID that the practice of using Indonesian citizens' names as 'nominees' to disguise foreign ownership of land poses risks of legal disputes and reduced state tax revenue.

According to Dharsana, this practice violates Indonesian regulations that restrict freehold land ownership (hak milik) to Indonesian citizens, creating legal exposure for everyone involved. He explained that nominee arrangements obscure who the real 'beneficial owner' is—whether of land or of controlling shares in a business entity—which in turn enables avoidance of regional and national tax obligations. For instance, a transaction that appears to be between two local Indonesians may actually involve an agreement granting real ownership to a foreign party, meaning the taxes that should be paid go unpaid.

He noted that oversight becomes especially difficult when such arrangements are made through private, unregistered agreements. Dharsana called on the government to strengthen monitoring and enforcement against nominee practices, and to educate citizens about the legal risks of lending their names for land or share ownership that actually belongs to someone else. He emphasized that regulations alone are insufficient without consistent implementation and effective enforcement by local authorities.

Beyond land ownership nominee schemes, Dharsana also flagged long-term leasing arrangements as another avenue through which foreigners may effectively control land. He urged that leasing regulations also be tightened so they do not become loopholes that obscure foreign control. He expressed hope the government can balance investment openness with protecting land ownership rights and environmental sustainability in Bali.