Under Indonesian law foreigners are not allowed to own freehold property title in Indonesia. However non-Indonesians can legally acquire property and enjoy full beneficial rights of property and land ownership through various ownership options. Each individual property has its own Hak Milik (freehold title). This enables buyers to acquire the property under any one of the three following options:

Direct Freehold
This refers to absolute ownership of land and corresponds to freehold title in common law terms. This title can only be held by an Indonesian citizen. To obtain freehold title the foreign investor can enter into a legal agreement with an Indonesian nominee whereby they hold the title to the property on behalf of the foreign purchaser. This Indonesian nominee simultaneously enters into a power of attorney with the foreigner. The power of attorney gives the investor beneficial rights on the property. In addition the nominee may also enter into a loan agreement with the foreign party as additional security.

The Right to Use
This option is available directly to foreign buyers and provides ownership in their own names for a period of 100 years. This title is provided in four 25-year Right to Use (or Hak Pakai) agreements with the Hak Milik owner. This is the only recognised long term title that a foreigner can hold in his or her own right.

Please contact your legal advisors to see which option works best for you. We can also recommend third party legal advisors in Bali or Jakarta who can fully explain these ownership options to you.