Foreign Ownership In Indonesia

Ownership of Freehold land is a benefit only available to Indonesian citizens. Foreign citizens who wish to acquire land with freehold status often partner with an Indonesian citizen who they have an existing relationship with and trust to be the legal owner of that land. The Foreigner pays for the land and signs several non-registered legal agreements to gain beneficial ownership and control over that land for their own use. The Indonesian partner will normally charge an annual fee and percentage of the eventual selling price as part of this arrangement.

Foreigners, Indonesian citizens and Indonesian domiciled companies have rights to lease land and buildings on land classified as Hak Sewa Bangunan which can be arranged directly between the Lessee and the Lessor.

Some foreigners prefer to use the “Right of Use” ownership structure, which is an official certificate issued by the land registry and can be granted over Freehold or even State-owned property and this certificate has precedence over any other certificate issued. It is only for landed houses in certain areas with a reasonably high minimum value. It can be issued to foreigners who are domiciled in Indonesia and also companies domiciled in Indonesia. A foreigner may only have one Right of Use certificate which is normally issued for 30 years with 20 + 30 year extensions possible, up to 80 years in total. This certificate is freely transferable and can be inherited by both foreigners and Indonesian citizens.