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Can Foreigners Own Land In Indonesia? - Peter Fanning, of Counsel, Hutabarat Halim & Rekan, Lawyers Jakarta

Saturday, 25 February 2012 13:50

IL&P – The most frequently asked question we hear is “I heard foreigners cannot own freehold land in Indonesia – so how can we invest?”. Could you summarize the titles under which a foreign person or entity can legally hold land in Indonesia.

Peter Fanning -­‐ In summary:

  • Hak Milik (equivalent to freehold) can be owned only by Indonesian citizens, and evidence is a registered Torrens-­‐style title. Such owners fully own freehold as it is generally understood.

  • HGB and HGU are leaseholds which can be owned by Indonesian citizens or companies (which includes Indonesian companies owned by foreigners -­‐ PMAs), and evidence is a registered Torrens-­‐style title ........

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Last modified on Monday, 18 March 2013 17:34

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Glossary of Land Title / Key Terms

Hak Guna Bangunan [HGB] - Building Rights Title: The transferable right to build and own buildings on land. HBG titles can be granted to foreign investment [PMA] companies. PMA companies can be 100% foreign owned. HGB title rights are granted for 30 years, renewable for an additional 20-30.

Hak Guna Usaha [HGU] - Land Cultivation Rights Title: The right to use state-owned land for agriculture, for 35 years extendable by 25 years. Agricultural use includes crop cultivation. cattle-rearing, plantations and fishing.

Hak Milik – Freehold Title: Cannot be held by non-Indonesians.

Hak Pakai [HP] – The Right To Use Title: The non-transferable right to use the land for any purpose. Granted for up to 25 years, extendable for another 20.

Hak Sewa - The Right To Rent Title: A lease on the land from the freeholder, usually for 30 years renewable for an additional 20. The name on the title remains that of the freeholder.

"Ijin Mendirikan Bangunan [IMB]" - A building permit

"Pondok Wisata" - A license to operate a guesthouse

"Sporadik" – Land that has been registered but has no physical certificate. A certificate under the owners name can be drawn up.

Please note that certain titles can be held by resident / non-resident foreigners or by foreign investment companies, others cannot. For more information please click here. Always take detailed legal advice before investing.


 

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