In 2024, Indonesia is increasingly associated not only with luxury holidays and the ocean, but also with work and investment. This is not surprising, given that last year Bali was ranked among the top 20 most promising destinations for profitable real estate investments.
This is due to many factors:
– significant growth in the regional economy;
– developing infrastructure;
– a stable flow of tourists (providing about 80% of the island’s income);
– favourable climatic conditions;
– political neutrality;
– affordable property prices.
One of the most popular forms of investment is the purchase of real estate. It provides a place for regular comfortable holidays and additional income from renting. However, foreign citizens cannot legally be full owners of property in Indonesia. The purchase of real estate is in fact a long-term lease with a fixed term (no more than 80 years).
Below we will tell you about possible ways to invest in real estate.
HAK MILIK. Full ownership rights
Full ownership rights to real estate or land. Granted only to Indonesian citizens and has no expiration date.
Foreigners who have acquired ownership rights through inheritance or marriage, as well as former Indonesian citizens who have lost their citizenship, are required to relinquish these rights within one year.
HGB — Hak Guna Bangunan. Right to build
HGB is the right to build and own buildings on someone else’s land for up to 30 years, with the right to extend it for another 20 years.
Upon expiry, the owner must either relinquish this right within one year or transfer it to another person.
It is also granted to foreign investors through a PMA company.
HP — Hak Pakai. Right of use
The right to use and receive income from land. The right of use can be granted for a maximum term of 30 years, with an extension of 20 years and renewal for another 30 years. The total term of use must not exceed 80 years. It is also granted to foreign investors through a PMA company.
HGU — Hak Guna Usaha. Right to cultivate
The right to cultivate land directly controlled by the state for a maximum period of 25 years for agricultural, fishing or livestock enterprises. For companies that require a longer period, HGU can be granted for a maximum period of 35 years. HGU is granted for land with an area of at least 5 hectares.
PT PMA companies, among others, may use it.
SHMSRS — Ownership rights to individual apartments in a multi-unit building
Applies only to apartments in high-rise buildings. The ownership period is up to 30 years with the right to extend every 20 years (provided that an application for extension is submitted no later than two years before the expiry of the SHMSRS).
You can always consult with our specialists online, by phone or in person at our office in Bali.
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