Land and Property Ownership for Foreigners

Regulations and restrictions do apply for foreign property ownership in Indonesia. However, purchasing property is possible if you know who to talk to.

Owning Property in Indonesia: Overview

Indonesia’s Agrarian Law called Undang-Undang No.5 Tahun 1960 Article 16 (1) is based on the Indonesian Constitution. It covers seven kinds of ownership structure but for our purposes only four of these apply.

These are:

  1. Hak Milik or Freehold
  2. Hak Guna Bangunan (HGB) or Right to Build
  3. Hak Pakai or Right to Use
  4. Hak Sewa or Leasehold

An Indonesian citizen is entitled to use any of these structures. A foreigner, however, cannot own property under a Hak Milik (freehold) title.

In December 2015, the government updated the property ownership laws making it easier for foreigners to own land and property under Hak Pakai and Hak Sewa for residential properties and Hak Guna Bangunan for commercial titles.

In all cases, as a foreigner, you need to show that you are partly living, working, retiring or investing in Indonesia. 

Hak Pakai certificates are valid for 80-years with automatic extensions after 30-years and 50-years.  

Hak Sewa certificates can range from one year up to the same maximum length as Hak Pakai, for a total of 80-years.

If you’re not comfortable with either Hak Pakai or Hak Sewa another option is to create a foreign owned company (called a PT PMA.) This company can legally have a Right to Build (HGB) certificate. You own the company and the company owns the property.

Apartment Ownership for Foreigners Residing in Indonesia

President Jokowi issued Government Regulation No. 18 Year 2021, concerning management rights, land rights, unit flats, and the land registry.

This rule is a derivative of the provisions of Article 142 and Article 182 Letter B of Law Number 11 of 2020, concerning job creation, otherwise known as the Omnibus Law.

The regulation states that foreigners or foreign citizens can now own an apartment unit.

Ownership rights to apartment units are granted to Indonesian citizens; legal Indonesian entities; foreigners who have permits in accordance with the provisions of laws and regulations; legal foreign entities that have representatives in Indonesia; or representatives of foreign countries and international institutions that are or have representatives in Indonesia.” 

Not all foreigners are free to live and own a condominium unit, as stated in Article 69.  Instead, only foreigners who have an official immigration permit can own a condominium unit or residence.

What will be the impact of apartment ownership by foreigners on the property industry?

Responding to this, Deputy General Chairperson of Real Estate Indonesia (REI) Bambang Eka Jaya said the apartment ownership policy could encourage growth in the property sector. This will be the case especially in the upper-middle segment of apartments worth more than IDR 5 billion.  

Ownership of residential houses or residences for foreigners as referred to in Article 71 is granted with the following limitations: minimum price; land area; the number of land parcels or units; and designation for residential purposes.

Further provisions regarding the procedures for granting and limiting ownership of residential houses by foreigners, as referred to in Article 69 to Article 72, are regulated in a ministerial regulation.

Furthermore, if a foreigner who owns a condominium unit or occupancy in Indonesia with this usufructuary status dies, the ownership of the condominium unit can be passed onto their heirs. In the event that the heir is a foreigner, the heir must have immigration documents in accordance with the provisions of the legislation.

Government Regulation No. 18 Year 2021 concerning management rights, land rights, unit flats, and the land registry has been in force since enacted on 2nd February 2020. (Source: Indonesia Expat.)

Minimum Price Thresholds for Purchasing Property in Indonesia

Zone HouseApartment
Minimum price thresholds for foreignersMinimum price thresholds for foreigners
JakartaIDR 10 billionIDR 5 billion
Banten, West JavaIDR 5 billionIDR 2 billion
East JavaIDR 5 billionIDR 1.5 billion
BaliIDR 3 billionIDR 2 billion
Central Java, YogyakartaIDR 3 billionIDR 1 billion
NTB, North Sumatra, East Kalimantan, South SulawesiIDR 2 billionIDR 1 billion
Other RegionsIDR 1 billionIDR 750 million

Price thresholds taken from Government Regulation No.13 Year 2016.

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These are answers to questions we get asked the most about company set ups. If your question isn't here, drop us a line.

Of course. To do so, you need to engage with a local nominee service provider.
Yes, this particularly applies to import and export businesses. Instead of establishing a company, you can use an undername import service, also known as importer of record.
It should take between 1 to 1.5 months. For speedy incorporation, you can choose a shelf company (ready-made company) instead.
Yes. A joint venture company can be in the form of PT PMA (foreign company) or PT (local company). Requirements for each establishment are different.
Business Registration Number is proof that a company, regardless of type, is legally registered in Indonesia. A company that does not have a Business Registration Number may have to face dissolution.

Contact Our Consultants

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.

Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.