Indonesia is the world’s fourth most populated country, covering approximately 17,504 islands, and has vast topographical diversity, as well as a rapidly expanding property/investment market. Using a combination of both international and domestic experience, we strive to accommodate all investment needs across the beautiful Indonesian archipelago.
Our services include assisting both foreign and domestic individuals and/or entities, who already hold property/investments in Indonesia, as well as, those who are interested in becoming part of Indonesia’s expanding economy and property market.
Although EBC Business Consulting is Bali-based, we offer services across the archipelago, including, but not limited to, Bali, Jakarta, Java, Sumatra, Lombok, Flores, Sumbawa, Bintan, Rote, Sumba, and other regions in Indonesia.
EBC Business Consulting offers a broad spectrum of services including due diligence/document review, consultation on contemplated transactions, contract drafting/review, and many other services to suit your investment and/or business needs. We cater to investors, residents, and developers, to complete your investment and property needs in a variety of industries.
With the increasing growth of the property sector in Indonesia, we combine the experience of foreigners and Indonesians to meet your investment and property needs.
Before engaging in property or business transactions in Indonesia, it is prudent to conduct due diligence as it pertains to the contemplated transaction. Such due diligence is usually done after the parties to a transaction have preliminarily agreed to the terms and condition of the transaction, subject to clear due diligence. Usually, once due diligence has been done and the parties are satisfied with the results, the transaction proceeds to finalization.
We can assist with either company or property due diligence. Please contact us for a list of services we can provide based on your investment interests.
Common Forms Of Land Holding
Investing in the real estate market in Indonesia requires a thorough understanding of the different forms of land ownership statuses. Here is a brief description of the most commonly used land holding mechanisms.
Hak Milik (“Right of Ownership” or “Freehold”) (hereinafter referred to as “HM”)
- HM is the fullest ownership right available under the law and is limited to individual Indonesian citizens.
- The period of ownership is unlimited.
Hak Guna Bangunan (“Right to Build”) (hereinafter referred to as “HGB”)
- HGB allows the holder to build, use, construct on the land, and is the most common form of land ownership used by Indonesian legal entities (whether foreign or domestically controlled). It can also be held by Indonesian citizens.
- The initial period of ownership is 30 years with a 20 year extension and an additional 30 year renewal period. Generally, administrative renewals/extensions are permitted.
- HGB can be converted to Hak Milik or Hak Pakai if the purchaser meets the necessary requirements.
- Foreign investment companies often invest/acquire property in Indonesian by establishing a limited liability foreign investment company (“PT PMA”). Such PT PMA’s are established for operational purposes which correlate to the PT PMA’s approved business activities as authorized by the Indonesian Investment Coordinating Board (“BKPM”) and the Ministry of Law and Human Rights.
- HGB title can be used to obtain a mortgage at the bank.
Hak Pakai (“Right to Use”) (hereinafter referred to as “HP”)
- HP allows an individual to use a plot of land, including to construct on such land, subject to local/regional permit/licensing requirements and zoning.
- Both Indonesian citizens/entities and foreign citizens/entities can hold HP, subject to certain requirements.
- Foreign citizens who wish to hold HP must have a valid KITAS.
- HP can be issued for an initial 30 years, with a 20 year extension and an additional 30 year renewal period.
- HP can be converted to Hak Milik or HGB if the purchaser meets the necessary requirements.
Hak Sewa (“Right to Lease” or “Leasehold”) (hereinafter referred to as “HS”)
- HS is open to both foreign and local individuals and/or entities.
- HS is not a form of actual land title, but simply a lease from the individual, Indonesian legal entity, or State, whereby lease payments and duration are established through either a private and/or notarial document.
There are multiple additional land status rights, including, but not limited to – Hak Pengelolaan (“Right to Manage” or “HPL”), Hak Guna Husana (“Right to Cultivate” or “HGU”), Hak Milik Atas Satuan Rumah Susun (“Strata Title” or “HMSRS”), and Hak Pakai Atats Satuan Rumah Susun (“Right to Use Strata Title” or “HPSRS”).
Please contact us for additional information should you be interested in knowing more about such titles.