There are 5 basic categories of land ownership in Indonesia
Hak Milik (HM) This is the equivalent of a freehold land title. The right of ownership, which can be sold, transferred, bequeathed and mortgaged to another individual. Ownership:
100% Indonesian Owned Companies
Indonesian Citizens
Hak Guna Bangunan (HGB) - Right to Build HGB titles give the lease holders the right to construct and own buildings on a plot of land. The right is transferable and may be encumbered. HGB can be considered the closed to a `freehold title’ that may also be owned by non Indonesians via legal entities established under the Indonesian Law and domiciled in Indonesia. This includes foreign-owned companies (PT PMAs) and joint-venture companies. HGB titles may be transferred back into HM titles.
HGB titles are the most common and safest title that foreigners can use by setting up a PT PMA to hold real estate in Indonesia. Banks and financial institutions may accept HGB land titles for mortgage and securitization purposes because it can be bought, sold and bequeathed and it is covered by the same planning and land use provisions that would apply with HM titles.
HGB titles are granted by the National Land Agency for an initial period of up to 30 years and are extendable for subsequent 20-year and 30-year periods. Upon the expiration of such extensions, a new HGB title maybe granted on the same land with the same terms.
Ownership:
100% Indonesian Owned Companies
Indonesian Citizens
PT PMA
Hak Sewa Bangunan (HSB) - Right to Lease This land title provides the right to use for a specified period of time, with extension options, similar to HGB. This type of land title is available to Indonesians, foreigners permanently domiciled in Indonesia, or a foreign company with a representative office in Indonesia.
Ownership:
100% Indonesian Owned Companies
Indonesian Citizens
Foreigners
PT PMA
Hak Pakai (HP) – Right to Use This land title provides the right to the land owner to lease a property to either a foreigner or Indonesian national. The lease agreement must be provided and witnessed by a Legal Notary under local law. The length of the lease can vary but will normally be up to 25 years with extension options.
Ownership:
100% Indonesian Owned Companies
Indonesian Citizens
Permanent Resident Foreigners
PT PMA
Hak Guna Usaha (HGU) – Right of Managing This land title provides the right to manage state-owned property for agriculture or husbandry for up to 35 years with extension options.
Ownership:
100% Indonesian Owned Companies
Indonesian Citizens
PT PMA
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