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Indonesia or Thailand: The Best Investment Destination for Europeans in 2025

Indonesia Thailand Investment by Indoned

For decades, Southeast Asia has been a magnet for European investors seeking growth opportunities in tourism, real estate, and hospitality. In 2025, two countries stand out as the most promising: Indonesia and Thailand. Both offer strong tourism markets, affordable labor, and growing middle classes. Yet, when it comes to legal frameworks for foreign investors, property rights, and long-term security, there are important differences.

This article provides a professional comparison between Indonesia and Thailand to help European investors decide where to allocate their capital in 2025.

Legal Framework for Foreign Investors

Indonesia

  • Foreigners cannot directly own freehold land.
  • Investment route: establishing a PT PMA (foreign-owned company).
  • PT PMA grants access to Hak Guna Bangunan (Right to Build) for up to 80 years.
  • Government actively supports foreign investment through BKPM (Investment Coordinating Board) and digital OSS system.

Thailand

  • Foreigners cannot own land directly.
  • Common route: long-term leasehold (30 years, renewable).
  • Foreigners may own up to 49% of condominium units in a building.
  • No equivalent structure to PT PMA; foreign investors often rely on local nominee arrangements (legally grey).

Market Outlook 2025

  • Indonesia:
    Bali, Lombok, Labuan Bajo, and Sumba are booming, supported by massive infrastructure investments (airports, toll roads, energy). Tourism arrivals are projected to rise 15% annually post-pandemic.
     Foreign investors with a PT PMA can engage in villa rentals, resorts, and real estate development legally.
  • Thailand:
    Phuket, Koh Samui, and Bangkok remain strong, but the market is mature and highly competitive. Property prices are significantly higher, and legal restrictions limit long-term control for foreigners.

Tax & Compliance

  • Indonesia:
    • Corporate Tax: 0.5% in the first 3 years and subsequently 11%-22% depending on the transaction.
    • Dividend Withholding Tax: 20% (reduced via EU treaties).
    • VAT: 11%.
    • Transparent PT PMA framework ensures compliance and stability.
  • Thailand:
    • Corporate Tax: 20%.
    • Complicated rules on land leases and nominee structures can expose investors to risks.
    • Lack of a unified framework for foreigners in property investment.

Comparative Table: Indonesia vs Thailand (2025)

Criteria Indonesia (PT PMA) Thailand (Leasehold/Nominee)
Foreign Land Ownership No (but PT PMA allows Hak Guna Bangunan – up to 80 yrs) No (30-yr lease, renewable, condos up to 49%)
Company Setup PT PMA – fully recognized & legal No direct foreign-owned company for landholding
Investment Security Strong legal basis (BKPM, OSS) Risky (nominee loopholes, less secure)
Corporate Tax 0.5% in the first 3 years and subsequently 11%-22% depending on the transaction. 20%
Tourism Growth 2025 +15% annually (Bali, Lombok, Labuan Bajo) +6–8% annually (Phuket, Samui, Bangkok)
Property Prices More affordable, high growth potential Higher, saturated market
Best For Long-term investors, Europeans setting up PT PMA Short-term rental investors, condo buyers

Why Indonesia is the Safer Bet for Europeans in 2025

For European investors, legal certainty is everything. While Thailand offers short-term opportunities, Indonesia provides a clear legal structure through PT PMA, making it easier to operate businesses, own property rights (Hak Guna Bangunan), and remain compliant with tax obligations.

If you are considering to set up company in Bali as foreigner, establishing a PT PMA is the recommended first step toward secure property and business investment.

Conclusion

Both Indonesia and Thailand are attractive in 2025, but Indonesia clearly offers greater legal security, long-term ownership structures, and higher growth potential.

At Indoned Consultancy, we specialize in helping Europeans establish PT PMAs in Bali, Lombok, Labuan Bajo, and Sumba. Contact us today for a free consultation and learn how to start your property investment journey the legal way.

Disclaimer

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.

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