Indonesia — Property: Buying Process

Why this matters

Foreigners may be interested in buying property in Indonesia for business or investment purposes, or as a retirement option.

Key facts

• Foreign nationals and foreign legal entities cannot hold hak milik, HGU or HGB; if they acquire them they must release the rights within a year or they lapse to the state.
• A foreigner may obtain limited-term hak pakai, a building lease right, or ownership of an apartment unit.
• Under the Basic Agrarian Law a foreigner can own a residence only with valid immigration documents and must be domiciled in Indonesia for hak pakai.
• A PPAT land deed official makes the transfer deed; Ministerial Regulation 18/2021 replaced Regulation 29/2016, so check current foreigner procedures.

Steps

1. Step 1: Find a property — Research and identify a property that meets the foreign ownership requirements, and is willing to be sold to a foreign buyer.
2. Step 2: Set up a foreign-owned company — If necessary, set up a foreign-owned company (PT PMA) to facilitate the property purchase, which is a complex and time-consuming process.
3. Step 3: Obtain necessary documents — Gather all required documents, including a copy of the property's deed, a property tax clearance certificate, and a letter of no objection from the local government.
4. Step 4: Conduct due diligence — Conduct a thorough due diligence review of the property and the company, including a review of the property's title, any outstanding debts, and any zoning or planning restrictions.
5. Step 5: Execute the sales and purchase agreement — Execute the sales and purchase agreement with the seller, which must be witnessed by a notary and the government's land office.