Indonesia’s stunning landscapes and growing economy have been drawing in foreign investors for years. But the country’s property ownership laws? Yeah, they’re a maze.

Foreigners can’t directly own freehold land in Indonesia. Instead, they have to go through legal mechanisms like leasehold agreements, Hak Pakai (Right to Use) permits, or set up Indonesian corporate structures.

Wrapping your head around these foreign ownership regulations is a must before jumping in with both feet.


There are a handful of pathways for foreign buyers, ranging from old-school leaseholds to setting up local companies for property purchases. The rules? They shift depending on property type, location, and your residency status.

This guide digs into title types, buying procedures, and special economic zones. If you’re eyeing a Bali villa or a Jakarta office, you’ll get the legal lowdown and the steps needed for a legit purchase.

Check out the legal framework governing foreign property ownership if you want to dive deeper.

Overview of Property Ownership in Indonesia

Indonesia runs on a state-controlled land system. The government calls the shots on all land, period.

The legal framework for foreign property ownership has shifted a lot lately, especially with reforms. The National Land Agency is the main referee for property transactions.

Legal Framework and Recent Reforms

Under Indonesian law, the state owns all land. Hak Milik—that’s full ownership—remains for Indonesian citizens only. Period.

Foreigners? No Hak Milik, no exceptions. That’s just how it is.

The Omnibus Law on Job Creation (2020) shook things up. Government Regulation No. 18 of 2021 tweaked land rights rules even further.

Key reforms include:

  • More property rights for foreigners in special economic zones
  • Minimum price requirements that change by province
  • Electronic land registration rolled out
  • Smoother procedures for foreign buyers

The reforms are the biggest shakeup in decades. They mostly target foreign investment in specific economic development areas.

There’s more flexibility now, but core restrictions on land ownership are still in place.

Key Government Agencies Involved

The National Land Agency (BPN) is the main authority for property deals. BPN handles land title registration and issues property certificates.

Every property purchase needs BPN registration to get a valid title. The agency keeps track of who owns what, all over Indonesia.

Provincial governments set minimum prices for foreign buyers, and these numbers aren’t the same everywhere. Bali, Jakarta, and other provinces each have their own rules.

The Ministry of Agrarian Affairs and Spatial Planning sets policy and oversees regulations. They work closely with BPN to keep things running (well, as smoothly as possible).

Local notaries are a must for property deals. You’ll want someone who gets Indonesian property law, trust me.

Immigration authorities check residency permit requirements. You’ll need a valid KITAS or KITAP for most categories.

Restrictions on Foreign Property Ownership

Indonesia keeps a tight grip on property rights. Full ownership is for citizens only.

Foreigners can get access to some property rights, but only through special legal frameworks.

Legal Limitations for Foreigners

Foreigners can’t get Hak Milik (freehold) rights. That’s the strictest part of Indonesia’s property laws for non-citizens.

You’ll need a valid Indonesian residency permit (KITAS or KITAP) for any property rights. No permit, no deal.

The state keeps control over all land. This is the foundation for every restriction you’ll run into as a foreign investor.

Regional authorities sometimes add extra hoops to jump through. Provinces can set their own minimum property values and location rules.

Main Legal Restrictions:

  • No direct land ownership
  • Residency permit required
  • Limited durations on property rights
  • Regional minimum value rules
  • Some zones are off-limits

Prohibited and Permitted Property Types

Foreigners can’t buy landed residential properties with freehold status. Agricultural, forest, and strategic national lands are also off the table.

But certain property types are still an option—like apartment units under strata title, where you own the unit but not the land.

Not Allowed:

  • Freehold landed homes
  • Agricultural land
  • Forest zones
  • Strategic national assets
  • Properties below set value

Allowed:

  • Apartment units (strata title)
  • Hak Pakai agreements
  • Commercial properties via PT PMA
  • Properties in special economic zones
  • Leaseholds

The Omnibus Law opened up more options in industrial estates and free trade zones. These areas are a bit more flexible for foreign investors.

Recent Changes Affecting Foreigners

Government Regulation No. 18 of 2021 brought big changes after the Omnibus Law. Foreigners now have more opportunities in special economic zones.

You can own apartments and even landed houses in these zones and free trade areas—if you meet the minimum price, which depends on the province.

Electronic land registration is now required. It’s supposed to cut delays and make things more transparent, though, well, it’s still Indonesia.

2021 Regulatory Changes:

  • Broader ownership in economic zones
  • Minimum prices set by province
  • Mandatory digital registration
  • Simpler approval steps
  • Some stronger legal protections

There are still plenty of hoops to jump through. Local authorities might add their own twists, so you’ve got to stay on your toes.

Property Title Types and Rights for Foreigners

Foreigners can access Indonesian property through legal frameworks that grant usage or building rights—not full ownership. Options include Hak Pakai for residential use, building rights for development, and leaseholds with flexible terms.

Hak Pakai (Right to Use)

Hak Pakai lets foreigners use land for living or business, but not own it outright. It’s the go-to for most foreign buyers.

Duration and Renewals:

  • Initial term: 30 years
  • First extension: 20 years
  • Second renewal: 30 years
  • Up to 80 years total

You’ll need a valid KITAS or KITAP for Hak Pakai. Property value minimums depend on the region.

The right covers both the land and any buildings you put up. You can transfer these rights to other eligible foreigners or locals while they’re still valid.

Hak Guna Bangunan (Right to Build)

Hak Guna Bangunan (HGB) lets foreigners build and own structures via a foreign-owned company (PT PMA). This one’s mostly for commercial or development projects.

Key Features:

  • Initial term: 30 years
  • Extension: 20 years
  • Renewal: 30 years
  • Max: 80 years total

Right to build needs a foreign investment company. You own the buildings, not the land.

Companies with HGB can mortgage, lease, or transfer the building rights. It’s common for hotels, offices, and big residential projects.

Leasehold and Other Arrangements

Hak Sewa allows foreigners to lease property for 25–30 years, sometimes with extension options. There’s no legal cap on how many leaseholds you can have.

Leasehold Benefits:

  • Flexible terms
  • Lower upfront costs
  • Easier to exit if needed
  • No limit on number of properties

Strata title means you can own an apartment unit directly. The land stays under a master title.

Some foreigners try nominee arrangements, where a local holds the property for you. But honestly, this is risky and can turn into a legal mess fast.

Purchasing Property As a Foreigner in Indonesia

Foreign nationals can buy property in Indonesia, but only through certain legal paths and with the right paperwork. The process is different for condos versus landed properties, and you’ll have to meet some strict requirements.

Buying Condominiums and Apartments

Foreigners can own apartment units under a strata title. Condominiums are by far the most accessible property type for international buyers. This ownership covers the unit itself, not the land beneath it.

Key Requirements:

  • Valid Indonesian residency permit (KITAS or KITAP)
  • Minimum price thresholds that vary by province
  • Location in eligible zones such as special economic areas

The Omnibus Law lets foreigners own apartments in special economic zones and free trade areas. Jakarta, Bali, and Yogyakarta are especially popular—no surprise there.

Strata title ownership gives foreigners the strongest property rights available. But before buying, it's smart to double-check that the development actually meets government criteria.

Investing in Landed Homes

Foreigners can't own land outright. Instead, they can get landed homes through Hak Pakai (Right to Use) agreements, which grant residential use for set periods.

Hak Pakai Terms:

  • Initial period: 30 years
  • First extension: 20 years
  • Second renewal: 30 years
  • Total possible term: 80 years

The Right to Use system requires a valid residency permit the entire time. KITAS or KITAP documents have to stay current.

Landed properties need to meet minimum value requirements, which change by region. It's important to verify zoning and make sure the property qualifies for foreign ownership before moving forward.

Documentation and Eligibility Requirements

All foreign property purchases require valid Indonesian residency permits. KITAS or KITAP holders can buy property once they hit the minimum value thresholds.

Essential Documents:

  • Valid passport
  • Current KITAS or KITAP
  • Tax identification number (NPWP)
  • Bank statements showing financial capacity
  • Property valuation certificates

The property acquisition process involves hiring a notary and doing some homework. It's necessary to verify land titles, check for debts, and confirm zoning compliance.

Registration with the National Land Agency (BPN) wraps up the transaction. Having a good legal advisor helps with Indonesia’s tricky property laws and keeps you out of trouble.

Using Indonesian Legal Entities for Property Ownership

Foreign investors can legally buy property rights through PT PMA structures. This opens up access to land rights like Hak Guna Bangunan for up to 30 years. It’s a legit workaround for Indonesia’s tight foreign property laws.

PT PMA Structure and Legal Process

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign investment company. It lets foreigners legally hold property rights in Indonesia. The minimum investment is 10 billion IDR (about $650,000-$700,000 USD in 2025).

Setting one up takes a few steps. You'll need to prepare passports, Indonesian tax IDs, and a business plan. The company can be entirely foreign-owned and needs at least one director and one commissioner.

Through a PT PMA, foreigners can get rights like:

  • Hak Guna Bangunan (HGB) – Right to Build for up to 30 years, extendable for 20 years
  • Hak Pakai (HP) – Right to Use for up to 25 years, extendable for another 20 years
  • Hak Sewa – Leasehold rights for up to 25 years with possible extensions

The PT PMA structure gives a government-approved investment route for foreign buyers. Registration with the Investment Coordinating Board (BKPM) is required, and ongoing reporting is a must.

Advantages and Disadvantages

Key Advantages:

  • Legal Security: Government-approved structure, so you avoid risky nominee setups
  • Development Rights: Full rights to build hotels, villas, or commercial properties
  • Business Operations: You can legally run rental properties with the right permits
  • Profit Repatriation: Transfer profits home without legal headaches

Primary Disadvantages:

  • High Capital Requirements: 10 billion IDR minimum investment is a big hurdle for smaller players
  • Complex Compliance: Strict BKPM rules and penalties for mistakes
  • Shareholder Control Issues: Major decisions need a General Meeting, which can get messy
  • Banking Challenges: Opening a local bank account isn’t always straightforward

The PT PMA structure can't be used everywhere. Some areas are restricted, like those near military bases, national parks, or heritage sites. No-go zones are off-limits for everyone, really.

Special Economic Zones and Regional Exceptions

Indonesia has set up special areas where property rules are more relaxed for foreigners. These zones make it easier for international investors to buy real estate in strategic spots.

Ownership in Special Economic Zones

Special economic zones and free trade zones give foreigners better property rights than the rest of Indonesia. These areas are designed to pull in foreign investment and boost development.

Key benefits in these zones include:

  • Direct ownership of apartments and landed houses
  • Less bureaucracy for property deals
  • Longer lease periods for commercial properties
  • Faster registration processes

Foreigners can own both residential and commercial properties in these zones, as long as they meet the minimum price requirements. These thresholds are usually higher than regular property prices.

Most special economic zones are in places targeted for tourism or industry. Bali, Batam, and some spots in East Java are standouts.

Ownership in these zones still uses the Hak Pakai system, not full freehold. But the 30+20+30 year setup is better than standard leaseholds.

Free Trade Zones and Other Strategic Areas

Free trade zones work a lot like special economic zones but focus more on business and industry. They offer extra perks for foreign companies setting up shop in Indonesia.

Strategic areas for foreign investment include:

  • Industrial estates with housing options
  • Tourism zones along the coast
  • Tech parks and innovation centers
  • Port cities with special status

Industrial estates and economic zones often mix residential and commercial properties. Foreign companies can get both factory space and staff housing.

The minimum investment in these areas is usually pretty high. Most zones require property purchases above the provincial minimums, which can be steep.

Foreigners still need valid residency permits and must follow local zoning. The main benefit is streamlined ownership rights, not easier residency.

Legal and Practical Considerations for Foreign Buyers

Buying property in Indonesia isn’t something to rush. Legal verification and help from certified professionals are a must. The role of authorized land deed officials can’t be ignored.

Due Diligence and Professional Assistance

It's wise to check everything before closing a deal. That means digging into land certificates, ownership history, and zoning rules.

Essential verification steps include:

  • Checking title deed authenticity
  • Searching for debts or liens
  • Validating building permits
  • Reviewing tax payments

Legal help is a lifesaver with Indonesia's complicated property laws. Many foreigners miss details that could cause big headaches later.

It’s best to work with property lawyers who know foreign transactions. They’re up to date on the rules and can spot problems early.

Key professional services needed:

  • Legal document translation
  • Checking regulatory compliance
  • Help with contract negotiations
  • Advice on structuring the deal

Role of Pejabat Pembuat Akta Tanah

The Pejabat Pembuat Akta Tanah (PPAT) is the official who finalizes property transfers. Without them, you can’t legally transfer property.

PPATs check if buyers qualify and make sure all foreign ownership requirements are met. They prepare the deeds and send the paperwork to the land office.

PPAT responsibilities include:

  • Checking buyer eligibility
  • Drafting legal documents
  • Acting as transaction witnesses
  • Coordinating with government offices

Choosing a good PPAT is crucial—their expertise really matters. Only certified PPATs can create binding property transfer documents for foreigners.

The PPAT will check your KITAS and confirm you meet the requirements before moving forward. This protects everyone involved from future legal messes.

If you are looking at purchasing a home in Indonesia and are worried about the potenetial pitfalls, Rumavi also offers a boutique and affordable advisory service to guide foreign investors through this process. Click here for more details.

Frequently Asked Questions

Foreign nationals need a valid residency permit and must meet minimum property value rules to buy in Indonesia. The longest lease is 30 years, with possible extensions. Land ownership is still for Indonesian citizens only.

What are the eligibility criteria for foreigners to own property in Indonesia?

Foreigners need a valid residency permit—KITAS or KITAP—to qualify for property rights. Understanding the legal framework is important before diving in.

The property has to meet the region’s minimum value, and it must be in an eligible zone like a special economic area, free trade zone, or industrial estate.

Can expatriates purchase land in Indonesia, and if so, under what conditions?

No, expatriates can’t buy land outright in Indonesia. Foreign ownership laws are strict and block direct land ownership by non-citizens.

However, you can get property rights through leaseholds or nominee arrangements with Indonesian citizens. These let you use and develop the land, but not actually own it.

What types of property titles are available to foreign buyers in Indonesia?

We can get Hak Pakai (Right to Use) for either residential or commercial land. This title gives us usage rights for 30 years to start, and it's usually possible to extend.

Hak Guna Bangunan (Right to Build) lets us construct buildings if we're working through a foreign-owned company. There's also Hak Sewa (Right to Lease), which is just what it sounds like—a lease for a set rental period.

If we're looking at apartments, strata titles let us own the unit itself. The catch? The land underneath is always held under a master title by an Indonesian entity.

How does the Right of Use (Hak Pakai) differ from the Right of Ownership (Hak Milik) for property in Indonesia?

Hak Milik is full ownership, but it's strictly for Indonesian citizens. Foreign nationals like us can't get this title, no matter what.

Hak Pakai, on the other hand, gives us the right to use the property, but not to own the land outright. We can use it for living or business, within a set timeframe, and usually there's a way to renew.

Really, it comes down to permanence and control. Indonesians with Hak Milik own the land forever, while we just borrow it for a while with Hak Pakai.

What is the maximum lease period for foreigners acquiring property in Indonesia, and can it be extended?

With Hak Pakai, we start with a 30-year lease. After that, we can extend for 20 more years, and then renew for another 30 if we're still interested.

So in total, that's up to 80 years if we play our cards right. Hak Sewa leases usually run 25 to 30 years, and often there's an option to extend.

There's no official cap on how many leasehold properties we can pick up in Indonesia, at least for now.

Are there any restrictions on the resale of property by foreigners in Indonesia?

We can transfer our property rights to other foreign nationals, but only if they meet the same residency and property value rules. The buyer needs a valid KITAS or KITAP permit, and the property itself has to hit certain minimum value requirements.

Transfers have to go through the right legal channels, and a notary should be involved. Selling to Indonesian citizens just to get around foreign ownership laws? That's not allowed.

Professional legal guidance helps navigate the complexities of property transfers and ensures compliance with current regulations.