There are 5 basic categories of land ownership in Indonesia
Hak Milik (HM) - Land Ownership This is the equivalent of a freehold land title. The right of ownership, which can be sold, transferred, bequeathed and mortgaged to another individual. Hak Milik titles can only be owned by 100% Indonesian companies or Indonesian citizens.
Hak Guna Bangunan (HGB) - Right to BuildKapal Oasis is held under this title by PT Private Sanctuary Indonesia Limited.
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 is the form of `freehold title’ that may be owned by Indonesian citizens and legal entities established under the Indonesian Law and domiciled in Indonesia, including foreign-owned companies and joint-venture companies. HGB titles may be transferred back into HM titles.
HGB titles are the most common title that foreign companies use 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 as would apply with HM titles.
HGB titles are granted by the National Land Agency for an initial period of up to 30 years and is extendable for subsequent 20-year and 30-year period. Upon the expiration of such extensions, a new HGB title maybe granted on the same land with the same terms.
Hak Sewa Bangunan (HSB) - Right to Lease 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.
Hak Pakai (HP) – Right to Use 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.
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.
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