The nominee type of structure is, as far as I can tell, the most used. When notarized in a good way, there are usually no problems. My advice is to find a good lawyer to arrange it all for you. Find a foreign lawyer, with long time experience in Bali, there are a few.
Even the "incomplete contracts" with plenty of "holes" in them are still respected.
Of course there are the stories of the crooked nominee, exploiting the holes in contracts. Even when a contract is made up with the best legal structure, a nominee may try to "go for it".
A typical exploit would be that you have a contract with somebody that dies, and you did not arrange inheritage in the contract. The heirs don't have a contract with you, but now they own the land...
Since this nominee structure is used a lot, it has a "legal mass". If this way of owning land in Bali would be declared "illegal", the public relations for Bali would suffer enormously, so nobody will challenge this "en mass".
I heard once, that if you hold this structure "against the exact letter of the law" it is a doubtful structure.
But, I know plenty who use the nominee structure, and all are happy with it, both the nominee and the foreign owner. The main thing is, when done properly, it works. But don't use a nominee you don't know very well. Don't go for the beautiful smile and "It's all ok, trust me". Ask around, talk with foreigners, talk with Notaries married to a foreigner, there are a few.
A rather "new" thing is the "Hak Pakai" title. It is not freehold, but it is right of use. A freehold title "Hak Milik", can be changed to "Hak Pakai", and this title can be in a foreigners name, so you don't need a local nominee.
Hak Pakai for foreign investors
Since March 2004 in effect in Bali:
The government offers foreign investors land rights that are relevant to the nature of their business. Prospective buyers of land for any purpose should consult the local government authorities on land use, planning and zoning. Based on a Presidential Decree issued in June 1996, foreigners domiciled in Indonesia are allowed to own one residential property. To meet the regulations of ownership of a house or an apartment, a foreigner must be deemed to be "beneficial to national development" and must be either:
An Indonesian resident (domiciled permanently in Indonesia) in possession of a permanent resident permit
A non-resident (domiciled in Indonesia only at particular times) in possession of appropriate visit and immigration stamps in his/her passport.
A foreigner can purchase or construct a house built only on land with the right of use (Hak Pakai), the right of use with the right of proprietorship, or the right of lease (Hak Sewa). An apartment can only be purchased by a foreigner on land with right of use (Hak Pakai). Foreigners are not, however allowed to purchase houses or apartments classified as "low cost housing" or "very low-cost housing".
Ownership is limited to 25 years, and is extendible for another 25 years provided that the foreigner remains an Indonesian resident or meets the status requirements. If the foreigner departs from Indonesia, the property must be sold or transferred within one year after departure. If the foreigner or his family does not use the house for more than 12 consecutive years, then the foreigner forfeits the "being domiciled" status, for the purpose of owning residential property.
The downside of this arrangement is that with every 25 year renewal you have to pay a 5% tax on the current value of the land.
And then there is of course the lease, which is supposed to be the "safest", but not always financially attractive, unless you can earn you money back within the lease period, and leases are hard to sell, say after half the lease period.....
For larger properties a PMA structure may be suitable. A PMA is a Ltd, same sort of structure, and this PMA can obtain the use of property by means of "Hak Bangunan" right to build. The land is "owned" by the PMA, this PMA can be owned by foreigners, without the "use" of Indonesian Citizens. The shares of this PMA can be traded. A PMA assumes a business, so owners would be elgible for tax, at least USD 1200 a year, but they would also get a Kitas and Working Permit for 5 years.
I heard the stories about people loosing their "Nominee" property, but I never met anyone in person who has, I wonder if anyone on this forum actually met someone.. All I know, are happy with it, allthough somewhat scared sometimes, after all we are strangers overhere. Some may say that the law is not in favor of foreigners, and know examples of this, but I know otherwise too. Just recently a guy who borrowed money to a Balinese, but the Balinese failed to pay back, and this foreigner now holds the property of this Balinese, by nominee....
And, don't trust anyone with green glasses.... They may tell the "Agrarian Office" that they lost their certificate, and have a new one issued 8) (Another possible exploit)
Just kidding rinto...
I think its important too, that when you have decided to buy something somewhere, to "go local", meet the people living in the area, the Kapala Desa and other officials there, if possible. Meet the people of the Desa, village, without the presence of who ever introduced you to the property....