Desribes land rights, immigration service and import licensing facility. Land rights consist of hak guna usaha (leasehold), hak guna bangunan (building rights) dan hak pakai (right of use). I also describes about how the foreigner can acquire hak milik (right of property). This description is based on Law Number 25 of 2007 concerning Investment and Law Number 5 of 1960 Concerning Basic Agrarian Principles. Government regulation Number 40 of 1996 Concerning Leasehold, Building Rights and Rights of Use.

1. Mariske Myeke Tampi
Law of Investment in Indonesia:
Land rights,
immigration service and
import licensing facility

2. Land right permit may be given, extended and renewed in
advance simultaneously and may be further renewed
upon request of investors in 3 (three) form of right:
a. Hak Guna Usaha (Leasehold)
b. Hak Guna Bangunan (Building Rights)
c. Hak Pakai (Right of Use)
(Article 22 paragraph (1) of Law Number 25 of 2007)
Land Rights

3. Hak Guna Usaha (Leasehold) is a right to work on land
directly controlled by the state for a period of time which
for use by an agricultural, fisheries or animal husbandry
company.
(Article 28 of Law Number 5 of 1960)
Hak Guna Usaha (Leasehold)

4. Hak Guna Usaha (Leasehold) may be given for 95 (ninety-
five) years and simultaneously renewed in advance for 60
(sixty) years, and it may be further renewed for 35 (thirty-
five) years.
(Article 22 paragraph (1) point a of Law Number 25 of 2007)
Hak Guna Usaha (Leasehold)

5. Hak Guna Bangunan (Building Rights) is a right to
construct and posses buildings on land which is not one’s
own.
(Article 28 of Law Number 5 of 1960)
Hak Guna Bangunan (Building Rights)

6. Hak Guna Bangunan (Building Rights) may be given for 80
(eighty) years and simultaneously renewed in advance for
50 (fifty) years, and it may be further renewed for 30
(thirty) years.
(Article 22 paragraph (1) point b of Law Number 25 of 2007)
Hak Guna Bangunan (Building Rights)

7. Hak Pakai (Right of Use) is a right to use, and/or to collect produce
from land directly controlled by the state or land owned by another
individual (tanah milik) which grants authority and obligations as
determined in the relevant right-granting decree by the official who
is authorized to grant it or as determined in the agreement with the
owner of the land, whereas the agreement is not a land-lease
agreement (perjanjian sewa-menyewa) or land-exploitation
agreement, given that everything is possible as long as it does not
contradict the spirit and provisions of this act.
(Article 28 of Law Number 5 of 1960)
Hak Pakai (Right of Use)

8. Hak Pakai (Right of Use) may be given for 70 (seventy)
years and simultaneously renewed in advance for 45
(forty-five) years, and it may be further renewed for 25
(twenty-five) years.
(Article 22 paragraph (1) point c of Law Number 25 of 2007)
Hak Pakai (Right of Use)

9. In Indonesia, only Indonesian citizens can have a hak milik
(right of ownership). A hak milik (right of ownership) is
the inheritable right, the strongest and fullest right on
land which one can hold. Though, a hak milik (right of
ownership) can be transferred to other parties in a
particular conditions.
(Article 21 paragraph (1) of Law Number 5 of 1960)
Why foreigners may not apply for Hak Milik
(Right of Ownership)?

10. A foreigner acquires a hak milik (right of ownership) by
inheritance without a will or by joint ownership of
property resulting from marriage.
(Article 21 paragraph (3) of Law Number 5 of 1960)
Can foreigners acquire a hak milik
(right of ownership) in a particular condition?

11. As long as one who has Indonesian citizenship
concurrently holds foreign citizenship, he/she cannot
have land with the status of a hak milik (right of
property).
(Article 21 paragraph (4) of Law Number 5 of 1960)
Can one who has two citizenships (Indonesian citizenship
and another one) acquire a hak milik
(right of ownership) in a particular condition?

12. Service and/or licensing convenience for
immigration facility may be granted for:
a. Any investment requiring foreign workers for realising the
investment;
b. Any investment requiring workers whose nature is temporary
for repairing machinery, other production supports, and post-
sale service;
c. Any prospective investors making inquiry in investment.
Immigration Service Facility

13. a. Limited residential permit for 2 (two) years for foreign
investors;
b. Change of status from limited residential permit into
permanent residential permit for foreign investors after living
Indonesia for 2 (two) consecutive years;
c. One year re-entry permit will be granted for several trips to any
holders of limited residential permit that will apply for 12
(twelve) months starting from the day such limited residential
permit is granted;
Facilities Granted For Foreign
Investment

14. d. Two-year re-entry permit will be granted for several trips to any
holders of limited residential permit that will apply for 24
(twenty-four) months starting from the date such limited
resindential permit is granted; and
e. Re-entry permit will be granted for several trips to any holders
of permanent residential permit that will apply for 24 (twenty-
four) months starting from the date such permanent
residential permit is granted.
The granting will be done by the Directorate General of
Immigration based on recommendation of the
Investment Coordinating Board.
Facilities Granted For Foreign
Investment

15. a. Any goods so long as it does not violate the law governing
merchandise trade;
b. Any goods that have no negative impact on the safety, security,
health, environment, and moral of the nation;
c. Any goods for plant relocation from abroad to Indonesia; and
d. Any capital goods or material for production demand of its
own.
Granted Import Licensing Facility

16. Law Number 25 of 2007 Concerning Investment
Law Number 5 of 1960 Concerning Basic Agrarian Principles
Recommended reference:
Government Regulation Number 40 of 1996 Concerning Leasehold,
Building Right and Right of Use
References