Last Updated on March 25, 2025 by Yasmina
Indonesia has long been an attractive destination for property investors, offering stunning landscapes, a growing tourism industry, and relatively affordable real estate compared to other Southeast Asian countries. However, one of the biggest questions foreign investors ask is: Can foreigners own freehold land in Indonesia?
The short answer is no—foreigners cannot directly own freehold land (Hak Milik) in Indonesia. But don’t worry! There are legal alternatives that allow foreigners to invest in property securely and profitably.
This guide breaks down everything you need to know about foreign property ownership laws in Indonesia and how to legally invest in land or real estate.
Table of Contents
1. Why Can’t Foreigners Own Freehold Land in Indonesia?
Indonesian law restricts freehold land ownership (Hak Milik) to Indonesian citizens only. This is part of the country’s effort to protect national land ownership and prevent excessive foreign land control.
If you’re a foreigner, you cannot directly own land in Indonesia, but you can legally control property through other ownership structures.
2. Legal Ways Foreigners Can Own Property in Indonesia
While freehold ownership isn’t possible, there are three secure and legal options for foreigners to invest in Indonesian real estate:
Option 1: Leasehold (Hak Sewa) – The Most Common Option
✔ Foreigners can lease land or property for up to 80 years.
✔ Lease terms typically start at 25-30 years, with renewal options.
✔ No Indonesian nominee required – the lease agreement is directly between the foreign investor and the landowner.
Best for: Foreigners looking to own a villa, house, or rental property without the complexities of a business structure.
Tip: Always structure leasehold agreements with clear renewal terms to protect your long-term investment.
Option 2: PT PMA (Foreign-Owned Company) – For Business & Investment
✔ Foreigners can set up a PT PMA (foreign-owned company) and buy land under a Hak Guna Bangunan (HGB – Right to Build) title.
✔ This allows the company to own property and operate a business in Indonesia.
✔ The HGB title is valid for 30 years and can be extended up to 80 years.
Best for: Investors looking to develop hotels, rental properties, commercial buildings, or long-term investments.
Tip: Setting up a PT PMA is the safest way for foreigners to legally control property for investment purposes.
3. Avoiding Risky Nominee Agreements (Warning!)
Some foreign buyers attempt to own land using an Indonesian nominee (local citizen) to hold the title. While this may seem like an easy workaround, it is highly risky and not legally protected.
Risks of Nominee Ownership:
- The land legally belongs to the nominee, not you.
- The agreement can be voided by Indonesian law, meaning you could lose your investment.
- If the nominee passes away or sells the land, you have no legal claim.
Legal Tip: Avoid nominee agreements! Instead, use a leasehold structure or PT PMA for a secure, legal investment.
4. What Is the Best Option for Foreign Property Investors?
The best investment structure depends on your goals:
| Investment Goal | Best Ownership Option |
|---|---|
| Renting a villa for personal use | Leasehold (Hak Sewa) |
| Investing in commercial or property | PT PMA with Hak Guna Bangunan (HGB) |
| Buying land for future development | PT PMA or Long-Term Leasehold |
General Advice: For long-term investment, a PT PMA is the safest and most flexible option. For personal use, leasehold is the most common choice.
5. FAQs About Foreign Property Ownership in Indonesia
1. Can foreigners inherit property in Indonesia?
Foreigners cannot inherit freehold land (Hak Milik), but they can inherit leasehold properties if the lease agreement allows transfer.
2. Can foreigners get a mortgage in Indonesia?
No, Indonesian banks do not typically offer mortgages to foreigners. Most foreign investors buy property with cash or private financing.
3. How long does it take to set up a PT PMA?
Setting up a PT PMA takes 6-8 weeks and involves legal documentation, licensing, and registration with the Indonesian government.
4. Can leasehold property be sold?
Yes! Foreigners can sell their remaining lease term to another buyer, making leasehold properties a viable investment option.
Final Thoughts: Can Foreigners Own Freehold Land in Indonesia?
No, foreigners cannot directly own freehold land (Hak Milik).
Yes, foreigners can invest securely through leasehold, or PT PMA ownership structures.
The safest legal investment for foreigners is through a long-term lease (Hak Sewa) or PT PMA (for business investors).
For foreign investors looking to own property in Indonesia legally and securely, leasehold and PT PMA are the best options. Always work with a trusted notary (PPAT) and legal consultant to ensure a safe and compliant investment.
About Nour Estates
We started Nour Estates with a simple idea: to make finding your dream land in Lombok as easy and enjoyable as a day at the beach. Our team is a mix of local folks and people from around the world who fell in love with Lombok like you. We’ve been in your shoes, faced the challenges of buying land here, and learned all the ins and outs. Now, we’re here to share that knowledge with you.
We are here to find you the perfect land to invest in. Contact us today, and let’s start this exciting journey together!
Email: hello@nourestates.com
Follow us on Instagram and LinkedIn for the latest Lombok Real Estate news and listings!
