Foreigners can own land through a PMA (Perseroan Terbatas Penanaman Modal Asing) in Indonesia. A PMA is a foreign-owned limited liability company that can conduct business and buy property in Indonesia. Foreign investors have the option to set up a PT PMA and purchase freehold or leasehold property via the company.
To establish a PT PMA, foreign investors must submit an application to the Investment Coordinating Board (BKPM). The application must include a business plan, financial statements, and proof of investment funds. Once the application is approved, the PT PMA will be registered with the Ministry of Law and Human Rights.
Once the PT PMA is registered, it can purchase land and property in Indonesia.
The PMA establishment process can be complex and time-consuming, but don’t worry; you can rely on InvestinAsia’s Indonesia PMA company registration services to simplify the process.
Owning a Land in Indonesia through PMA
A PMA can own land in Indonesia, but only through a Hak Guna Bangunan (HGB) title. This is the closest a foreigner can get to owning land in Indonesia, as it gives the holder the right to build on and use the land for a period of up to 80 years. The HGB title can be extended for additional periods of 20 years each, up to a maximum of 100 years.
Only Indonesian citizens and businesses can own land in Indonesia with a Hak Milik (HM) title, which is the highest form of land ownership in the country. HM titles are perpetual and can be passed down to heirs.
While PMAs cannot own land outright in Indonesia, the HGB title gives them a great deal of flexibility and control over their land holdings. PMAs can build on the land, sell the land, or lease the land to others. Additionally, PMAs can use the land as collateral for loans.
Benefits of Owning Land through a PMA in Indonesia
Here are some of the benefits of owning land through a PMA in Indonesia:
- PMAs have full ownership and control over the land.
- PMAs can build on the land, sell the land, or lease the land to others.
- PMAs can use the land as collateral for loans.
- PMAs can extend the HGB title for additional periods of 20 years each, up to a maximum of 100 years.
Limitations on the Types of Land a PMA Can Possess
There are a few restrictions on what type of land a PMA can own. For example, PMAs are not allowed to own land in certain strategic sectors, such as defense and natural resources. Additionally, PMAs must obtain special permission from the government to own land in certain areas, such as near military bases and airports.
How a PMA Can Acquire Land in Indonesia?
Here are the steps involved in acquiring land in Indonesia through a PT PMA:
- Establish a PT PMA in Indonesia.
- Obtain approval from the BKPM to acquire land.
- Identify a suitable piece of land.
- Negotiate a purchase or lease agreement with the seller or lessor.
- Have the purchase or lease agreement notarized by a public notary.
- Register the purchase or lease agreement with the National Land Agency (BPN).
- Once the purchase or lease agreement is registered with the BPN, the PMA will be the official owner or lessee of the land.
It is important to note that the process of acquiring land in Indonesia can be complex and time-consuming. It is advisable to consult with an expert to ensure that the process is completed correctly.