Foreign nationals can buy property in Indonesia, under certain structures.
There are a few ways foreign nationals can own and buy property or real estate in Indonesia:
- Invest in property through a PT PMA
- Buy leasehold property.
- Buy under a Hak Pakai title.
- Buy under a Hak Guna Bangunan title.
- Buy with a passport.
- Buy through an Indonesian nominee.
Invest in property through a PT PMA
PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign-owned company that can conduct business and buy property in Indonesia. Foreign investors can establish a PT PMA and acquire freehold or leasehold property through the company. Most foreigners opt for this option, as it is one of Indonesia’s safest ways of property ownership. One of the benefits of buying through a PT PMA is that it allows obtaining an Investor KITAS, a two-year residency permit.
Setting up an Indonesian PT PMA takes around 4 to 5 weeks.
You may need additional land titles and certificates before using, building, or renting PT PMA-purchased property. The most important title for PT PMAs is Hak Guna Bangunan (HGB), which allows legal entities such as PT PMAs to build and own freehold property on leased land. This makes acquiring land through leasehold and constructing a freehold building possible.
Do you want to start property rentals, a restaurant, or any other type of business? You might have to apply for additional licenses, depending on the industry your business is in.
Buying leasehold property
Foreigners can buy Indonesian real estate through a leasehold agreement. This gives an individual or legal entity the right to own and use real estate for a certain period. They can use the property for residential or commercial purposes. Buying a property through leasehold instead of freehold can be smart, as this option is often cheaper.
Many foreigners use a PT PMA to lease land and later construct a house on top of it. In most cases, a leasehold agreement is valid for 25 years and can be extended for another 30-year and 25-year period, up to 80 years.
Buying under a Hak Pakai title
Hak Pakai (HP), meaning Right to Use, is a title that gives foreigners and Indonesians the right to buy and use a property. Ownership only applies to buildings or units; not all properties can be purchased under Hak Pakai. One of the criteria for foreigners to buy property in Indonesia under a Hak Pakai title is having a residency permit in Indonesia, such as KITAS, KITAP, or a Second Home Visa.
Indonesian nationals who hold property through Hak Milik can, if the property is eligible for it, transfer the land title to Hak Pakai for it to be sold to a foreigner. The Hak Pakai certificate is valid for 30 years and can be extended to 80 years. The title can be sold or transferred to another eligible foreigner if it’s valid.
Buy under a Hak Guna Bangunan title
Hak Guna Bangunan (HGB) means Right to Build and is a land certificate that gives the holder the right to hold ownership over a property built on someone else’s land. Usually, the land is owned by an Indonesian national, business, or government. The HGB title can only be obtained by Indonesian nationals or companies, such as a PT PMA. This means an individual foreigner can’t buy a property under the Hak Guna Bangunan title.
Buy with a passport
The Indonesian government announced 2023 that foreigners can buy Indonesian property with just a passport. There is no need for a residency permit or a foreign-owned company, although other requirements exist. A foreigner can own one plot of land with a maximum size of 2,000 m2, and the property must have a minimum value, depending on the region.
