Quick Guide to Property Ownership by a Foreign Investment Company (PT PMA) in Indonesia

How can Indonesian property be owned by a foreign investment company (PT PMA)?

By using a foreign corporate ownership model, a foreigner owns shares in a limited liability company that has been approved for foreign investment, what is referred to as a PT PMA. Then, the PT PMA company, not the individual shareholder, owns the property title. Thus, the foreigner owns the company, and the company owns the property. For more information, see our Quick guide to Establishing a Foreign Investment Company (PT PMA) in Indonesia

What are the main types of Indonesian property that can be owned by a foreign investment company (PT PMA)? 

A Foreign Investment Company (PT PMA) can own property that is subject to the title of Hak Pakai (Usage Rights), Hak Guna Bangunan (Building Rights) and Hak Guna Usaha (Cultivation Rights).   

Can Hak Milik (Ownerhsip Rights) property be owned by a foreign investment company (PT PMA) or an individual foreigner? 

No. Only an Indonesian citizen can own Hak Milik (Ownership Rights) property. For comparative purposes, Hak Milik (Ownership Rights) title is the closest equivalent to Freehold title under the common law system.  If a foreign investment company (PT PMA) wants to own property that is currently under Hak Milik (Ownership Rights) title, they must convert it into another title that they are allowed to own, e.g. Hak Guna Bangunan (Building Rights). 

Can a foreign individual directly own property in Indonesia? 

A foreign individual who is a resident in Indonesia can directly own a residential home or apartment. For example, a foreigner can own a landed house under Hak Pakai (Usage Rights) title or an apartment under Hak Pakai atas Satuan Rumah Susan (Usage Rights on Apartment Unit).  For more information, see our Quick guide to Foreign Individual Direct Ownership of a Landed House and our Quick Guide to Foreign Individual Direct Ownership of an Apartment.

When is a property converted to Hak Guna Bangunan (Building Rights) title? 

If you are a foreign Investment company (PT PMA) who is buying Hak Milik (Ownership Rights) property from an Indonesian citizen, then the conversion to Hak Guna Bangunan (Building Rights) occurs at the time of the sale and purchase of the property. If the property is already under Hak Guna Bangunan (Building Rights) title, then there only needs to be a transfer of ownership, no conversion of title is needed. 

What is the duration of the Hak Guna Bangunan (Building Rights) title? 

The Hak Guna Bangunan (Building Rights) title is valid for up to 30 years (or for the duration left on the existing Hak Guna Banguan (Building Rights) title). Then the title is extendable for an additional 20 years, upon expiration of which it may be renewed for another 30 years.  

What are the costs involved in extending, renewing or issuing a new Hak Guna Bangunan (Building Rights) title? 

Each extension or renewal of a Hak Guna Bangunan (Building Rights) certificate or each issuance of a new certificate will incur a government cost of approximately 2% of the value of the property.  

Can property be purchased by a PT PMA for non-residential purposes? 

Assuming there are no residential zoning restrictions, then a building, office space or apartment unit that is subject to Hak Guna Bangunan (Building Rights) title can be owned by a PT PMA, and used for running their business. This saves the PT PMA from renting office space.  

Can property be purchased by a PT PMA for residential purposes? 

Assuming there are no commercial zoning restrictions, then a landed house or apartment that is subject to Hak Guna Bangunan (Building Rights) title or Hak Pakai (Usage Rights), can be owned by a PT PMA, and used by the owners or other staff as their residence. This saves the foreign investors from renting other residential property when conducting business in Indonesia.  

Can Hak Guna Bangunan (Building Rights) property be used as security for a loan? 

Yes. Hak Guna Bangunan (Building Rights) property can be used as collateral for a loan.  

Is it common for foreign investment company (PT PMA) to own property in Indonesia? 

Foreign corporate ownership of property is becoming more common in Indonesia as property investment becomes more attractive, or people seek to end existing risky nominee arrangements.  

What is the tax exposure when selling the property owned through a PT PMA? 

The transfer of property by an individual or by a company is subject to 2.5% income tax (PPh) for the seller, plus approximately 5% title deed duty (BPHTB) for the buyer, and a government administrative fee (PNBP). In addition, any PT (PT PMA or local PT) selling property incurs a 10% Value Added Tax (PPN).  The proceeds from the sale of property is retained within the company until dividends are disbursed to shareholders, upon which dividend tax of 10% would be incurred pursuant the Income Tax Law.  Additionally, there is withholding tax for foreign shareholders, and the amount depends on the country of tax domicile and any tax treaty with Indonesia.   

What happens if I liquidate the company or sell the shares in the PT PMA? 

Liquidation is a complicated process that may take over a year, involving a tax audit, newspaper announcements, notarial deeds, Ministerial approval and appointment of a liquidator. Alternatively, selling the shares in the company would incur a progressive income tax (PPh 21) amounting to a maximum of 30% from the capital gains, i.e. the difference between the transaction and nominal value of the shares in the company.  It is not advisable to sell company shares at their nominal value if the company holds a property of much higher value. 

How long does it normally take to finalize the transfer of property title? 

If no conversion of property title is needed, then the process as follows: 

  1. The Execution of Sale and Purchase Agreement   

After it is executed, the seller’s income tax and the purchaser’s duty on land and building right acquisition must be paid and validated.  

2. Transfer of Property  

The conveyancer will register the Sale and Purchase Agreement with the National Land Agency. The transfer process will take 2 months.  

If the property title needs to be converted to Hak Pakai (Usage Rights) or Hak Guna Bangunan (Building Rights), then the process is as follows:   

3. The Conversion Process  

If the purchaser is foreign investment company (PT PMA), the title must be converted to  

Hak Pakai (Usage Rights) or Hak Guna Bangunan (Building Rights). This conversion will take 1 month. 

4. The Execution of Sale and Purchase Agreement   

After it is executed, the seller’s income tax and the purchaser’s duty on land and building right acquisition must be paid and validated.  

5. Transfer of Property  

The conveyancer will register the Sale and Purchase Agreement with the National Land Agency. The transfer process will take 1 month.  

What are the actual deliverables a client receives when purchasing property? 

The deliverables a client receives are: 

  • Land Certificate (that has been transferred in the name of the purchaser)  
  • Sale and Purchase Agreement   

What documents are normally required to purchase property? 

For corporate ownership by a foreign investment company (PT PMA): 

  • ID Card or Passport of Board of Directors  
  • Tax Identification Number (NPWP) 
  • Tarde Business License (SIUP) 
  • Certificate of Business Domicile (SKDP)  
  • Company Registration Certificate (TDP) 
  • Business Identification Number (NIB)  
  • Principle License (Izin Prinsip)   
  • Company Establishment Deed/Article of Association (AoA)any amendment of AoA and the decision of the Minister Of Justice And Human Rights Of The Republic Of Indonesia 


The above information is based on the following laws and regulations: 

  • Government Regulation Number 34 Year 2016 Regarding Income Tax for Any Income Generates from Any Transfer of Rights of the Land or Property; 
  • Ministerial of Agrarian Affairs Regulation No. 29 Year 2016 regarding The Procedure of Entitlement, Releasing or Transfer of Ownership of Residential House for Foreigner Resides in Indonesia 
  • Government Regulation Number 103 Year 2015 Regarding Ownership of Residential House of Foreigner Who Resides in Indonesia; 
  • Law No. 21 Year 1997 Regarding Fees for Acquisition of Land and Building Rights 
  • Government Regulation Number 40 Year 1996 Regarding Cultivation Rights, Building Rights and Usage Rights for Land;  


This Quick Guide is provided for general information purposes only and should not be considered as legal advice for your specific situation. Should you require legal advice, contact an attorney. 

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