I have been living in Kuta, Lombok for two years now, and a common question I get asked is if foreigners can buy property in Indonesia. Buying property in general can be a daunting experience in one’s own country, but buying property in a foreign country can be even scarier. 

Buying property in a country like Indonesia as a foreigner can be particularly daunting.

In this blog, I will try to simply highlight how easy it really can be and what you need to know to ensure a smooth experience.

The Indonesian government has made it easy for foreigners to own property in Indonesia through the Hak Guna Bangunan (HGB) land ownership title. The direct translation of this means “Right to Build.” This title can be obtained by Indonesian nationals or legal entities, such as a PT PMA. 

So, for foreign nationals to own property, they have to set up a PT PMA, which is a company, and the land will be transferred into their PT PMA through the HGB title.

You do not need to partner up with an Indonesian resident; all you need is the PT PMA. Now, there is a lot of misinformation out there about PT PMAs and what is needed to set one up. To establish a PT PMA, you need two people in the company—this can be yourself and your partner, or yourself and a family member.

For my PT PMA, I was the director and the majority shareholder with 95%, and my commissioner was my dad, to whom I gave 5% of the business. So, it’s important to note that you will need two people.

This HGB certificate is valid for 30 years and can be extended by 20 and 30 years, totaling 80 years. Once it nears the end of its term, you simply extend it. Failure to extend or renew the HGB title will result in the property being returned to the original landowner.

The advantage of the HGB title is that you basically own the land, and this is the best legal status you can obtain as a foreigner. In the case of a dispute over the land, you will be protected.

The value of your property also does not decrease as it would with a leasehold title. It will retain its market value, giving you a better ROI over the long term. The fortunate thing about Lombok is that the HGB title is still a viable option, whereas in Bali, this is not really an option anymore with the rise in land prices.

So, you’re probably wondering how to set up a PT PMA.

Well, the process is pretty simple as well. You get in touch with us, and our team will help you.

Step 1: Fill out the PT PMA form

Step 2: Make a payment of 30 Million IDR, which is around $1500 depending on the exchange rate

Step 3: Wait around 3 weeks, and your PT PMA will be registered

After this, you will have the ability to open a business bank account and start the transaction process.

If everything goes according to plan, you can own a slice of paradise within one month.

One must be vigilant about who you work with. The long and short of it is that post-COVID, there has been a surge in people wanting to set up PT PMAs with the intention of buying property. Many of these people never bought property because their real intention was actually to get a two-year Kitas visa. As a result of this surge, as in any developing country, there have been some illegal setups and people who have exploited the system. Consequently, some people have been scammed. It’s important to work with trusted people who can advise you accordingly.

If you’re interested in navigating this, please reach out to us, and we will help you along the way. There is a lot of misinformation out there, and you’re probably overwhelmed from reading multiple articles all saying different things. The rules are always evolving here property in Indonesia as the government navigates growth without harming their beautiful homeland.