What you are allowed to own

The one fact everything follows from

A foreign national cannot hold Hak Milik, Indonesian freehold. Not through a nominee, not through a trusted local, not through an arrangement your own lawyer would call a trust. Nominee structures are void under Indonesian law and the courts have said so repeatedly; when one fails, the asset belongs to the name on the certificate. Every legitimate route below is a way of holding something that is not freehold.

Leasehold

You take a lease over the land from an Indonesian owner for a fixed term, usually twenty-five or thirty years, with an extension written into the contract. It is the cheapest and quickest route in: no company, no capital, and you can be signed inside a fortnight.

The weakness is the extension. It is a contractual promise from a person, not a right granted by the state, and its worth is the worth of that person's word and their heirs' willingness to honour it. Read the clause. If the extension is priced at market rate with no cap, you have not bought thirty years with an option on twenty more – you have bought thirty years and a negotiation you will conduct from the weaker side.

Hak Pakai, the right of use

A right of use held by you personally: thirty years, extendable twenty, renewable thirty. No company to incorporate and no company to keep alive.

The condition is in the eligibility. A foreign individual may hold Hak Pakai only while they hold a valid Indonesian residence permit – a KITAS or a KITAP. Lose the permit and you have a limited window to transfer or release it. It is also a residential right: letting short-stay is restricted, and any permission has to be in writing before you buy rather than sought afterwards.

HGB through a PT PMA

You incorporate a PT PMA, a foreign-owned Indonesian company, and that company holds Hak Guna Bangunan – the right to build on and own the structure. HGB runs thirty years, extendable twenty, renewable thirty. Eighty years in total, if every extension is granted.

It is the strongest position available to a foreign buyer and it is what the serious developments use. It is also the most work: six to ten weeks to incorporate, roughly USD 4,000 to 6,000 in fees, paid-up capital that sits inside the company, and monthly tax filings, annual accounts and quarterly investment reports for as long as you hold it.

On capital specifically, check the current figure rather than the guides. BKPM Regulation No. 5 of 2025 cut the minimum paid-up capital for a PT PMA from IDR 10 billion to IDR 2.5 billion. The separate requirement that total investment value exceed IDR 10 billion per business line per location, excluding land and buildings, is a different test and is frequently confused with it. Most of what is written online has not caught up with either.

Choosing between them

The honest test is not which is strongest. It is which one survives you. A PT PMA that stops filing accrues penalties and can lose its licences, which is worse than never having incorporated. A lease taken by someone who intends to hold for twenty-five years is a slow-motion mistake made on day one.

Answer three questions – how long, what for, and how much administration you will genuinely keep up with in year four – and the structure usually picks itself.