Selling a Bali villa by selling the PT PMA's shares

A villa held by a PT PMA can be sold two ways: the company sells the villa, or the shareholders sell the company. The second is often pitched as a way around transfer taxes. It moves the tax rather than removing it, adds company-law steps, and hands the buyer the company's history. This page reads the tax regulation that took effect in 2025, the company law and the investment ministry's 2025 rules.

Seven words in a share sale

The terms in the deed, the company law and the tax rules.

The tax on the seller

A non-resident seller

UU PPh Pasal 26(2) taxes a non-resident's income from selling assets in Indonesia at 20% of estimated net income. PMK 81/2024 Pasal 238 applies that to shares in an Indonesian company and fixes the estimate at 25% of the sale price: 5% of the sale price, final. It is withheld only where the applicable tax treaty gives Indonesia the taxing right (ayat (2)) — a question for the seller's country's treaty, not one we answer here. The 2024 regulation replaced the 1999 decree on the same point.

Who withholds, and the hold on the register

The tax is withheld by the buyer; the company if the buyer is also foreign (Pasal 239), deposited by the 15th of the following month. The company records the share-transfer deed only after the seller proves the tax paid (Pasal 240(1)) — so the register itself waits for the tax.

Holding through an offshore company

Selling shares of a related conduit company in a tax haven, instead of the PT itself, may be treated as a sale of the Indonesian company's shares (UU PPh Pasal 18(3c)), with the same 20% of estimated net income (Pasal 26(2a)).

A resident seller

For a resident, a gain on transferring assets is ordinary taxable income (UU PPh Pasal 4(1)(d)); the 5% final rule is for non-residents.

Shares or the villa: a worked comparison

The example uses the same price for the villa and the shares, which is rarely true: the share price is what the company is worth after its debts and tax exposure. A treaty can take the 5% to nil, and the allowance on BPHTB differs by regency. Taxes on selling the villa. The dividend layer.

The company-law steps

The deed and the register

Shares are transferred by deed; the deed or a copy goes to the company; the directors record it in the shareholder register and notify the Minister within 30 days of recording (UU 40/2007 Pasal 56). Until the Minister is notified, filings based on the new line-up are refused (ayat (4)).

Restrictions in the articles

The articles may require offer to other shareholders first, or approval of an organ or authority (Pasal 57). Offered shares not bought within 30 days may go to a third party (Pasal 58); an organ that does not answer within 90 days is taken to approve (Pasal 59).

When control changes

An acquisition is a share acquisition that shifts control (Pasal 125(3)). For a purchase directly from the shareholders, the directors must announce a summary in at least one newspaper at least 30 days before the meeting is called, and creditors may object within 14 days (Pasal 127(2), (4), (8)); the acquisition is made by notarial deed in Indonesian (Pasal 128(2)), and the result is announced within 30 days (Pasal 133(2)). The 1998 regulation on acquisitions, still listed as in force, says two newspapers and 14 days; the texts do not settle which governs.

The investment side, and the land right

OSS and the investment rules

Changes to shareholders and their countries made outside OSS must be adjusted in OSS (Permen Investasi/BKPM 5/2025 Pasal 225-226). If the buyer is Indonesian and buys every share, the PMA becomes a domestic company; a domestic company selling to a foreigner becomes a PMA; either must adjust to the investment and capital rules (Pasal 227). We found no clause requiring a new foreign shareholder of a continuing PMA to re-meet the IDR 10 billion and IDR 2.5 billion thresholds. Shareholders and directors. Quarterly LKPM.

Why a share sale is not a land transfer

BPHTB is charged on the acquisition of a land or building right (UU 1/2022 Pasal 44); the 2.5% is charged on income from transferring a land or building right (PP 34/2016 Pasal 1). In a share sale the HGB holder — the PT — does not change, and a share sale is not among the listed grounds. That neither tax arises is our reading of those definitions; we found no provision saying so in terms. The HGB's remaining term goes with the company.

What this page does not cover

• Tax treaties — whether the seller's country takes the taxing right.
• Valuing the company or its tax exposure.
• Whether the villa license can be held by a PMA — the KBLI page.

Common questions