Real Estate in Indonesia – Foreign Owners and Tenants

There are various types of land title in Indonesia, and not all of them can be acquired by foreign entities and individuals, even if such foreign individuals reside in Indonesia or the foreign entities have a presence or do business in Indonesia.

Below are the types of land title and the parties who are permitted to acquire them:

• right of ownership: Indonesian individuals and specific Indonesian institutions;
• right to build: Indonesian individuals and Indonesian companies;
• right to cultivate: Indonesian individuals and Indonesian companies;
• right to use: Indonesian individuals, Indonesian companies, governmental institutions, religious and social agencies, diplomatic offices, international agencies, diplomatic offices, international agencies, foreign representative offices and foreign citizens;
• right to manage: government institutions (including regional governments, state-owned business entities, regional government-owned business entities, PT Persero, authority bodies and other government legal entities designated by the government);
• right of ownership over apartment units: parties who are entitled to hold title for the land on which the building is built; and
• lease: Indonesian individuals, Indonesian companies, foreign companies and foreign individuals.

As the types of title that can be held by foreign parties are very limited, foreign investors who wish to invest in the real estate sector will usually establish an Indonesian entity as an investment vehicle to acquire the desired land.

This first appeared in Lexology GTDT Real Estate 2021.

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