Land & Property Ownership

Learn About Property & Land Ownership in Indonesia

Obtaining property & land ownership in Indonesia offers some challenges for foreigners. However, buying property in Indonesia is attainable with specific resources and documents – Indo prime Indonesia can help expedite the process.

Property & Land Ownership in Indonesia

Offering a wide range of business opportunities, Indonesia is often seen as an attractive Asian country for foreign investment. One of the thriving sectors is the construction industry, valued at USD 238 billion in 2021 and projected to grow by more than 5% in the next four years. This projection will attract more interest from investors, which will aid in job creation.

With such an optimistic projection, foreign investors need more convenience regarding property regulation and land ownership in Indonesia. The Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency has issued Regulation No. 18 of 2021 on Procedures for Determining the Right to Manage and Rights over Land.

Regulations for Owning Property in Indonesia

The regulation states that foreigners who have secured immigration documents could own landed houses or multistory housing that occupy certain types of land with specific requirements:

1. Landed houses

Luxury houses following the relevant laws and regulations
One plot of land is permitted per person or family
The purchased area can be a maximum of 2,000 sqm. One can be exempt from this limitation if:

The relevant property positively impacts local economic and social life,
Foreigners have secured a permit from the Minister
Residency ownership for foreign representatives

2. Multistory housing

Multistory housing is a residential building with 4 or more stories and 10 or more dwelling units. This category includes:

Apartments: Individual units with private kitchens and bathrooms, accessible through shared hallways and stairs.
Condominiums: Individually owned units within a larger building, often with shared amenities like pools or gyms.

Restrictions for foreigners in buying property in Indonesia

Foreigners face restrictions on owning land with property rights in Indonesia, as governed by the Basic Agrarian Law (BAL), specifically Article 24. Therefore, it is important to be aware of the prohibited actions related to foreign ownership of land and property in Indonesia.

Direct Purchase of Land with Property Rights: It is illegal for foreigners to directly acquire land with property rights under the BAL.
Using Nominee Agreements: Agreements where an Indonesian citizen holds the land title on behalf of a foreigner are considered illegal and pose significant legal risks.

Steps of Buying Land and Property in Indonesia

Buying property in Indonesia can be complicated due to specific regulations and exceptions. These three ways will help you navigate the process of buying land and property in Indonesia.

Right to Use (Hak Pakai): Leasehold rights granting use for up to 80 years (renewable).
Company Ownership: Invest in an Indonesian company that can own land with full rights.
Marriage to an Indonesian Citizen: Gain indirect rights through joint ownership (legal complexities apply).

Indo prime Indonesia as The Solution for Land & Property Ownership in Indonesia

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Frequent Asked Questions

How many types of business licenses are there in Indonesia?

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Is it mandatory to apply for a permanent business license in Indonesia?

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.

What Our Clients Say

After comparing several consultants, I found Indo Prime Indonesia is a international and professional organization with good understanding of local market. Indo Prime Indonesia helped our company to set up our first Indonesian entity, and also helps with day-to-day operation. Indo Prime Indonesia showed high level of professionalism. Jump start the business in Indonesia, take care of routine process, therefore we can focus more on our core business.

We were searching for suitable partner for the begining of our operation on Indonesian market. After short exploration and recommendation from our business partners we decided for Indo Prime. Local knowledge, orientation at our business problematics, contacts and language. In a friendly approach combined with professional service. Consultation before the project – avoids so much unnecessary act of “foreigners” worse overview of the Indonesian legislative.

We chose Indo Prime because we considered Indo Prime as a professional company with a good attitude and a streamlined business model. Indo Prime met all our expectations as it created the atmosphere of accountability and transparency. The most significant added values that we received from cooperation with Indo Prime are the time we saved and mistakes we avoided.

Indo Prime provided outstanding services in registering our representative office in Indonesia in a timely manner. Their financial services have been helping us a lot — our local employees feel secure working for our company. Indo Prime became our reliable partner with quick response on our needs. Their flexibility and full support of our business in Indonesia are the main reasons to continue in our cooperation.