Property and Land Ownership in Indonesia
Overview
Business Hub Asia provides comprehensive assistance to both foreign and local investors in the legal acquisition of land and property ownership within Indonesia. This support encompasses regulatory consultations, strategic selection of ownership frameworks, and the complete processing of all requisite permits and legal documentation.
Key Features
Legal Ownership Scheme Consultation
Guidance to determine the suitable form of ownership, such as Hak Guna Bangunan (HGB), Hak Pakai, or through a PMA (Foreign Investment) legal entity.
Establishment of PMA Legal Entity
For foreign investors, we assist in establishing PT PMA as a legal entity to lawfully own properties in Indonesia.
Property Verification and Due Diligence
Checking the legality of land or property, title status, boundaries, and validity of certificates from BPN (National Land Agency).
Transaction Process Assistance and Notarization
Including drafting and executing sale and purchase deeds, certificate transfer, and payment of taxes and other fees.
Post-acquisition Services
Comprehensive real estate and land tenure services, including construction permits (IMB/PBG), environmental compliance, and legal counsel.
Minimum Requirements
Identity Documents
Passport and official identity (for foreign investors)
Legal Entity Documents
Legality of PT or PT PMA (if ownership is done through a legal entity)
Property Documents
Data and documents of the property to be owned
Tax & Financial Documents
NPWP and source of funds statement letter (for certain transactions)
Process and Timeline
1
Initial Consultation and Determination of Ownership Scheme
Determine the suitable property ownership structure: personal name (Indonesian citizens), Hak Pakai (foreigners), or PT PMA. Estimated Time: 1-2 working days.
2
Establishment of Business Entity (for foreigners)
Foreigners seeking property ownership via a PT PMA must first register their PT PMA business entity. Estimated Time: 15-25 working days.
3
Property Search and Verification
Search for suitable land or property and verify legality, including certificate status and land zoning. Estimated Time: 5-10 working days.
4
Negotiation and Signing of Sales and Purchase Agreement (PPJB)
Negotiate the price and terms of purchase, then sign the PPJB as an initial commitment. Estimated Time: 3-5 working days.
5
Payment and Signing of Sale and Purchase Deed (AJB)
Make payment according to the agreement and sign the AJB in front of the Land Deed Official (PPAT). Estimated Time: 3-5 working days.
6
Ownership Transfer and Certification
Process the title transfer to the National Land Agency (BPN) and obtain a certificate in the name of the new owner. Estimated Time: 14-30 working days.
*Assuming all processes run smoothly and without obstacles, the total estimated time needed to complete the land and property ownership process is 5-15 weeks
Important Consideration
- Foreign investors cannot fully own land (Hak Milik), but can utilize Hak Guna Bangunan or Hak Pakai.
- Foreign ownership of property must comply with the latest regulations from BPN and BKPM.
- The ownership scheme should be tailored to the purpose of the investment, duration of use, and location of the property.
- Nominee/Undername (in the name of residents) use in property and land ownership is not recommended due to legal risks.
Frequently Asked Questions
Can foreigners own land in Indonesia?
Not directly, but they can own the Right to build or the Right to use land through the establishment of a PT PMA.
What is a PT PMA and why is it needed?
PT PMA is a foreign-owned Limited Liability Company that can be used as a legal entity to purchase property in Indonesia.
Can I buy a house as a foreigner without setting up a PT?
Yes, if the property is an apartment and meets the minimum investment value criteria and uses Hak Pakai (Right of Use).
Is there a minimum property value limit for foreign ownership?
Yes, this limit depends on the location (Jakarta, Bali, etc.) and property type, usually ranging from IDR 3-5 billion.
What are the risks of buying a property in the name of a local (nominee)?
The nominee structure presents risks for foreign investors due to its weak legal basis in ownership dispute scenarios.
Can land be inherited by foreign heirs?
Yes, as long as the property is legally owned and the heirs meet the requirements of Indonesian law.
Comprehensive Support to Keep Your Business Running Smoothly
From operations to local compliance, our support services are designed to help your business grow sustainably in Indonesia.