Can Foreigners Own Property in Indonesia?
Yes! Legally, safely, and through the right structure.
1/6/20262 min read
And not only is it completely legal, but it’s also becoming one of the smartest investment moves in Southeast Asia. You just need to understand the right structure to do it safely, transparently, and profitably.
The Legal Way: Owning Property With a PT PMA
The most secure and recognized way for foreigners to invest in Indonesian real estate is by setting up a PT PMA (Penanaman Modal Asing), a foreign-owned company registered under Indonesian law.
A PT PMA allows you to buy, build, and operate property in your company’s name, giving you full legal rights to own villas, resorts, or rental units. Once your company is registered, you can hold property under specific land titles designed for business use, such as Hak Guna Bangunan (HGB) or Hak Sewa (Leasehold).
Setting up a PT PMA is a simple process that usually takes around one month and requires only two shareholders (both can be foreigners). Once established, your company can buy land, sign contracts, open a local bank account, and even repatriate profits internationally.
Your Ownership: Leasehold & Right to Build
Here’s how property ownership works for foreigners in Indonesia:
Hak Sewa (Leasehold)
This title gives your company the right to use and profit from a piece of land for a long period, typically 20 to 80 years, depending on your agreement with the landowner. You can build on it, rent it out, and renew or extend the lease when it expires. Leasehold is a popular choice for investors in tourist hotspots like Lombok and Bali because it’s straightforward, flexible, and affordable.
Hak Guna Bangunan (HGB – Right to Build)
This title allows your PT PMA to own the building and use the land for up to 80 years (30 initial years, plus renewals). It’s ideal for long-term investments such as villas, hotels, or commercial developments. While the land itself remains under Indonesian ownership, your company holds full operational and legal control over it for the duration of the agreement.
Both options are 100% legal, secure, and recognized by the Indonesian government, offering foreign investors strong protection and peace of mind.
Taxes and Returns
Owning property in Indonesia through a PT PMA also means you operate like a local business. You’ll pay Corporate Income Tax (CIT): 0.5% for the first three years and 11% afterward, as well as a small annual Land and Building Tax (PBB), around 10% of the property’s assessed value.
In fast-growing areas like Kuta Lombok, rental yields and property appreciation can easily outweigh these costs. With tourism growing by over 250% since 2022 and the government investing billions into new infrastructure, investors are seeing strong returns between 10–20% annually, depending on property type and usage.
The Bottom Line
So yes, foreigners can own property in Indonesia, legally and profitably. The key is to do it through the proper channel: a PT PMA. It gives you control, flexibility, and the ability to operate your investment safely under Indonesian law.
With booming tourism, rising demand for accommodation, and property values climbing steadily, there’s never been a better time to explore owning a villa or development project in Indonesia. Lombok, in particular, is emerging as one of the most exciting and secure places to invest right now.
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