INDONESIA Law and Practice Contributed by: Yogi Sudrajat Marsono, Heru Pamungkas, Agnes Maria Wardhana and Andin Aditya Rahman, Assegaf Hamzah & Partners
Submission (OSS) system, administered by the Ministry of Investment. This system integrates with other government institutions and provides a centralised spatial planning map accessible to the public. Efforts are also underway to central - ise building-related licences through the Ministry of Public Housing’s online platform. Although digitalisation of land documents like titles and mortgage deeds is progressing, chal - lenges such as overlapping claims and unregis - tered lands persist. Therefore, physical land cer - tificates are still used for property transactions. 2. Sale and Purchase 2.1 Categories of Property Rights Property rights can be acquired in the following categories. • Freehold Title ( Hak Milik, or HM) – HM is the strongest and most extensive land title that can be owned by Indonesian citizens and certain Indonesian legal entities determined by the government. It grants an indefinite ownership right. • Right to Build ( Hak Guna Bangunan, or HGB) – HGB allows Indonesian citizens and legal entities, including foreign investment com - panies (commonly called PMA Companies), to build and construct on the land. Initially granted for a maximum of 30 years, it can be extended for another 20 years, and renewed for an additional 30 years. • Right to Cultivate ( Hak Guna Usaha, or HGU) – HGU is granted for the purpose of agricul - ture, fisheries or animal husbandry, and may be granted to Indonesian citizens and legal entities, including PMA Companies. Initially granted for a maximum of 35 years, it can be
extended for another 25 years, and renewed for an additional 35 years. • Right to Use ( Hak Pakai, or HP) – HP per - mits the use of land by Indonesian citizens, legal entities, foreign investment companies, foreign citizens residing in Indonesia, for - eign companies with representative offices in Indonesia, and representatives of foreign states or international organisations. Initially granted for a maximum of 30 years, it can be extended for another 20 years, and renewed for an additional 30 years. HP granted to gov - ernment institutions or foreign representatives may be given without a specified term. • Management Right ( Hak Pengelolaan, or HPL) – HPL is granted based on an MOA decree to government institutions, state-owned enterprises (SOEs) and regional govern - ment enterprises, among others, typically for managing public facilities such as ports, SEZs and industrial estates developed or managed by the government or SOEs. • Strata Title – strata title is granted to Indo - nesian nationals, Indonesian legal entities, foreign citizens holding a stay permit in Indo - nesia, foreign companies with representative offices in Indonesia, and representatives of foreign states or international organisations, for the ownership of apartment units. HGB, HGU and HP can be granted on either state-owned land or HPL land. A typical arrange - ment for investors to operate in industrial estates or SEZs managed by government institutions or SOEs is by applying for HGB above HPL land. In addition to registered land titles, there are types of unregistered/uncertified land (docu - ments such as Letter C, Girik or Petok issued by village authorities) and other forms of customary ( adat ) law acknowledgement of ownership.
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