Hidden capital in tourism economy: an ecology of money laundering risk through property in Bali

Mala Sondang Silitonga, Keisha Dinya Solihati, Irwinda Vanya, Rima Ranintya Yusuf and Alih Aji Nugroho

Journal of Money Laundering Control, 2026, vol. 29, issue 4-5, 200-218

Abstract: PurposeThis study aims to examine how money laundering risks are produced and normalized in tourism-driven property markets, focusing on Bali’s real estate sector, where foreign ownership restrictions and uneven enforcement shape informal ownership practices and anti-money laundering (AML) vulnerabilities.Design/methodology/approachThe study adopts a qualitative research design based on semistructured interviews with key actors involved in real estate transactions and governance, complemented by document analysis and court case review. An ecological analytical framework is used to analyze how economic pressures, regulatory constraints, informal ownership practices and gatekeeper power relations interact to shape money laundering vulnerabilities in the property sector.FindingsThe findings show that money laundering risk arises not only from loopholes, but from regulatory limitations, uneven enforcement, normalized informal practices and weak gatekeeping. Nominee arrangements, undercapitalized corporate vehicles and sham marriages function as ownership-substitution mechanisms that obscure beneficial ownership and weaken source-of-funds verification. These practices are reinforced by uneven know your customer implementation, limited AML coverage of nonfinancial professionals and trading influence by politically exposed persons.Originality/valueThis study reconceptualizes real estate-based money laundering as a systemic phenomenon embedded in tourism economies, rather than as a linear or bank-centric compliance failure. Because money laundering operates through multiple sectors and asset classes, this study examines real estate as one strategic channel within a broader ecosystem of illicit financial flows. It provides one of the first ecological analyses of laundering risk in a tourism-dependent property market in the Global South and highlights the need for ecosystem-level AML interventions that extend beyond the financial sector.

Keywords: Money laundering; Real estate; Tourism economy; Beneficial ownership; Gatekeepers; Bali (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/jmlc/article/29/4-5/200/13 ... conomy-an-ecology-of (text/html)
https://www.emerald.com/jmlc/article-pdf/29/4-5/20 ... c-01-2026-0021en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-01-2026-0021

DOI: 10.1108/JMLC-01-2026-0021

Access Statistics for this article

Journal of Money Laundering Control is currently edited by Dr Paul Gilmour

More articles in Journal of Money Laundering Control from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().