Land ownership and property regulations in Indonesia
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OWNERSHIP IN INDONESIA

Invest Islands has spent significant time and resources to establish the correct legal structure to ensure full compliance with Indonesian foreign ownership laws as well as Hong Kong (Commonwealth) investment regulations.

Penanaman Modal Asing | PMA

Penanaman Modal Asing (PMA) translates as: Foreign Investment Company

The legal entity through which a foreign person, foreign company, or foreign government body can conduct business in Indonesia is the PT PMA, which is the only safe method to ensure full compliance with Indonesian property ownership regulations.

Individuals who are Indonesian citizens are entitled to own land under the Hak Milik title. 

HAK PAKAI

Right to Use

HAK GUNA BANGUNAN​

Right to Build

HAK MILIK

Right to Own

Property Ownership in Indonesia Under
a Foreign Investment Company

The right to build title (Hak Guna Bangunan or HGB) gives the holder the right to possess land for an 80-year period, with the freedom to construct and develop buildings on the land during that period. HGB can be owned by Indonesian individuals or by a legal entity, including a PMA-licensed company. A PMA company may be up to 100% foreign-owned, thereby allowing a foreign investor to have direct legal control over the company and its business activities. A PMA requires a minimum paid-up share capital of US$170,000.

For foreign investors, the best solution in terms of cost and peace of mind is to purchase land through an existing PMA. Invest Islands offers a full-service agreement between the PMA and individual investor that specifies amounts, duration of investment hold, security of investment, and exit strategy.

If a buyer decides to develop their land holdings, the PMA structure will even allow them to fully own, develop and control the property within the lawful term of the HGB. It will also allow them the freedom to sell any interest in the property offshore should they wish to do so.

Lease agreements will be registered directly in the buyer’s name without the need for an Indonesian nominee. A PMA is a business that has to be compliant with the regulations of the BKPM (Indonesia’s Investment Coordinating Board). This ensures it is a more secure method of investing compared to using an individual nominee.

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How to Set Up a PMA Company in Indonesia

This free downloadable “How To…” guide is the first part of a step-by-step legal manual to investing in Indonesia. Focused on establishing a PMA, it includes an introduction to corporate structures and a guide on how to start a foreign investment company in Indonesia. We define what a PMA is, list the requirements for starting one, and what you can expect post-establishment.

With our professional advice and personalised service, the details of Indonesia’s foreign ownership laws and regulations are easy to navigate and understand, making investment in one of the world’s most idyllic locations clear and painless.

Investing in Indonesia through a company is one of the safest options available, allowing you to remove risk and comply with Indonesian law. For foreign investors, the best solution in terms of legality, cost, and peace of mind is to consult with experienced professionals to guide you through the process and ensure your investment roadmap is clear, long-term, and structured.

CONTENTS

  • Corporate Structures Available to Foreigners in Indonesia
  • Relevant Departments
  • The Governing Regulations
  • A PT PMA Defined
  • Requirements for a PT PMA
  • Establishment of the Company
  • Registering your Company in OSS
  • Positive Improvements for Foreign Investment Companies
  • What You Can Expect Post Company Establishment

OUR PARTNER:

Understanding Your Visa Options in Indonesia

Our “Guide to Understanding your Visa Options in Indonesia” is part two of our step-by-step legal manual to investing in Indonesia. It includes an introduction to the various different types of visas available.

For each type of visa, we cover its purpose, requirements, validity, extension eligibility, and how to apply. 

Obtaining a visa in Indonesia is a simple process that you can undertake yourself. Or you can acquire the services of an agent or lawyer, the latter option costing more but reducing time and stress.

With our professional advice and personalised service, the details of Indonesia’s immigration and visa laws and regulations are easy to navigate and understand, making investment in one of the world’s most idyllic locations clear and painless.

CONTENTS

  • Applying for a Visa
  • Free Visit Visa on Arrival
  • Social Cultural Visa
  • Single-Entry Business Visa
  • Multiple-Entry Business Visa
  • Investor Visa / Itas
  • Working Visa / Kitas
  • Retirement Visa
  • Spouse Visa
  • Dependant Visa
  • Permanent Stay Visa / Kitap
  • Other Possible Visa Options

OUR PARTNER:

Legal Framework for Land Titles in Indonesia

This explanatory guide to understanding the land titles available in Indonesia is the third part of our step-by-step legal manual for investing in Indonesia. Land titles and property rights acquired by foreigners are governed by Law No. 5 from 1960 regarding the Basic Principles of Agrarian Law.

The guide includes an introduction to the different types of land titles and describes which ones are relevant for foreigners. For each land title, we cover the applicable legislation, duration, purpose, and who is eligible to acquire each title.

With our professional advice and personalised service, the details of Indonesia’s property laws and regulations are easy to navigate and understand, making investment in one of the world’s most idyllic locations clear and painless.

CONTENTS

  • Land Titles Available in Indonesia
  • Property Ownership For Foreigners in Indonesia

OUR PARTNER:

Legal Guide to Tax Regulations in Indonesia

Our guide to understanding the tax regulations of Indonesia is the fourth part of our step-by-step legal manual to investing in Indonesia. It includes an introduction to the various tax compliance matters.

Taxes in Indonesia are straight forward, however are wrapped within a complex framework. We highly recommend seeking the help of a certified professional. Our team is happy to connect you with or merely recommend experts.

Advisory disclaimer: Please note that neither Invest Islands nor Seven Stones is a certified tax consultant and the information contained in this guide is introductory and based on publicly available information. For specific tax advice, please consult with a registered tax professional.

With our partner’s professional advice and personalised service, the details of Indonesia’s taxation laws and regulations are easy to navigate and understand, making investment in one of the world’s most idyllic locations clear and painless.

CONTENTS

  • Double Taxation Agreements (DTA)
  • Personal Taxation
  • Corporate Income Tax (CIT)
  • Property Taxes
  • Tax Assessment and Tax Return Filing
  • Tax Governance
  • Tax Dispute and Resolution

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WAIT! Do you know which questions you should ask in order to set up a PMA company as a foreigner in Indonesia?

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