The three legal routes for foreigners
- Hak Pakai (Right to Use). Granted to foreigners who are Indonesian residents (with a valid permit). Terms can extend up to 80 years cumulatively. Suitable for a personal villa or a held-for-income property.
- Hak Sewa (Leasehold). A lease of land/property for a fixed term, commonly 25–40 years, often with agreed extension options. The most common route for managed villa and studio investment, as it is straightforward and transferable.
- HGB via PT PMA. A foreign-owned Indonesian company (PT PMA) can hold HGB (Right to Build) title — typically used for larger, commercial-scale or portfolio investments and for those who want a corporate ownership vehicle.
What about permits and due diligence?
Beyond title, a legitimate project needs the correct building permit (PBG, formerly IMB) and clean land certification. Before investing, verify the land certificate, the developer's right to build, the PBG, and that the structure you are buying into is correctly documented. A reputable developer will provide this transparently. Our broader Indonesia property guide for foreigners covers taxes and the full due-diligence checklist.
Which structure is right for an investor?
For a hands-off, income-producing investment, Hak Sewa leasehold (or Hak Pakai for residents) is the most common and simplest route, while a PT PMA suits larger or multi-asset holdings. The trade-offs are cost, duration, control and resale value, all of which an independent advisor can model for your situation. Malasama Development structures each project clearly and guides investors through the process — but the independent legal review is always yours to commission.
Sources
- Indonesian Agrarian Law No. 5/1960
- Government Regulation PP 18/2021 on land rights for foreigners