Luxury villa with private pool owned through PT PMA in Indonesia
Legal Guide · 2026

How Foreigners Own Property in Indonesia

Foreigners cannot hold freehold title (Hak Milik) in Indonesia. The legal route is a PT PMA — a foreign-owned Indonesian company — which holds the land under HGB title (Hak Guna Bangunan, Right to Build): 30 years, extendable to 80 in total. Setting one up costs Rp 25–30 million (about €1,200–1,500), takes from a few days to three weeks, and can be done remotely. It replaces the nominee arrangement, where an Indonesian individual holds title on a foreigner's behalf.

The PT PMA structure, HGB title, real costs and timeline — and the one structure you must avoid.

By  ·  Brand & Content Lead  ·  Updated 19 September 2026  ·  9 min read

PT PMAThe legal structure
€1.2–1.5KSetup cost
≤ 3wkTimeline
80yrMax HGB tenure
The Core Rule

Can Foreigners Own Property in Indonesia?

No, not directly. Indonesian agrarian law reserves freehold title (Hak Milik) to Indonesian citizens. Foreigners own, rent out and sell property through a PT PMA holding HGB title — a structure used by thousands of investors. The alternative, a nominee arrangement where an Indonesian holds title on your behalf, is legally unenforceable.

There are two paths. One is sound and used by thousands of investors. The other is a trap.

The safe route: a PT PMA (foreign-owned Indonesian company) holding the property under HGB title. Full commercial and rental rights, legally enforceable.

The trap: a nominee arrangement, where an Indonesian citizen holds title "for you." It is legally unenforceable — there are documented cases of foreigners losing properties entirely. Never use it.

Villa interior owned via PT PMA
The Vehicle

What Is a PT PMA?

A PT PMA (Penanaman Modal Asing) is an Indonesian limited company that can be 100% foreign-owned in property and hospitality. It holds the villa under HGB title for 30 years, extendable to 80 in total under the Omnibus Law, and through it you can rent short-term or long-term, sell, and transfer rental income abroad.

The title is granted under the Omnibus Law (Cipta Kerja). Through the company you gain full rights to:

Title Types

Hak Milik vs HGB vs Hak Pakai: What's the Difference?

Hak Milik is freehold and is reserved to Indonesian citizens. HGB (Hak Guna Bangunan) is a building right of 30 years, extendable to 80 in total, and it is the title a PT PMA can hold. Hak Pakai is a right of use for a foreign individual with a KITAS: a home, not a rental business.

TitleWho can hold itDurationBest for
Hak Milik (freehold)Indonesian citizens onlyPermanentNot available to foreigners
HGB (building rights)PT PMA (foreign-owned co.)30yr, to 80yr totalInvestment / rental villas
Hak Pakai (right to use)Foreign individual w/ KITAS30yr, renewablePersonal residence

For an income-producing villa, HGB held by a PT PMA is the standard, commercially flexible choice.

Setup

How Do You Set Up a PT PMA?

Setting up a PT PMA costs Rp 25–30 million (about €1,200–1,500), service and company bank account included, takes from a few days to three weeks and is done remotely through a power of attorney. Six steps: choose the KBLI business code (55110 or 55194 for rental villas), prepare the documents, file through OSS, receive the NIB and NPWP, open the company bank account, then transfer the HGB title and record it at the BPN land office.

Choose the business classification (KBLI)

For rental villas, codes 55110 or 55194. This defines what the company can legally do.

Prepare documents

Passport, proof of address, investment plan, and power of attorney to your local legal representative.

Register via OSS

The Online Single Submission system (oss.go.id). Your legal partner handles the filing.

Receive NIB and NPWP

Business registration number (NIB) and tax ID (NPWP) — the company is now legally active.

Open a PT PMA bank account

Required for revenue collection and mandatory LKPM investment reporting.

Acquire the property

Sign the PPJB, transfer HGB title to the PT PMA, and record it at the local land registry (BPN).

FAQ

What Happens to the Property If You Sell the Company?

The HGB title stays with the PT PMA, so foreign owners usually exit by selling the company shares rather than the villa itself. That makes corporate due diligence part of the purchase: articles of association, shareholder registry, encumbrances recorded against the company and unpaid tax all follow the company to its new owner.

It is the part of the structure investors rarely ask about upfront, and it is broadly efficient. But it means your due diligence at the point of purchase must extend beyond the land certificate itself to the corporate documents: the articles of association, the shareholder registry, any existing encumbrances recorded against the company, and whether the company has any outstanding tax obligations that could follow it to the new owner.

A related risk emerges when investors purchase from a developer using an intermediary holding structure. If the PT PMA was established by a third party on the investor's behalf, it is essential to confirm that directorship and shareholder control are unambiguously transferred to you at completion — not retained in any form by the seller or their nominee. Indonesian corporate law is clear on shareholder rights, but enforcing those rights across borders becomes significantly more complex when the corporate governance paperwork is incomplete or ambiguous from the outset.

The practical safeguard is straightforward: engage an independent Indonesian notary and a property lawyer before signing any purchase agreement, and request a full corporate health check of the PT PMA you are acquiring or establishing. The nominee arrangement — holding through an Indonesian individual rather than a properly constituted foreign-owned entity — remains a known vulnerability in the market and offers none of these structural protections. The PT PMA plus HGB route, properly documented, is the framework recognised under Indonesian law for secure foreign ownership.

Frequently Asked Questions

How much does a PT PMA cost to run each year?

Beyond the Rp 25–30 million (about €1,200–1,500) setup, ongoing costs include accounting and tax filing, mandatory annual LKPM reporting, and corporate income tax (22% on net profit). Budget roughly €1,500–3,000/year for compliance depending on your provider.

Do I need to live in Indonesia to own a PT PMA?

No. Both incorporation and property purchase can be completed remotely through a power of attorney. Many owners visit only occasionally.

What happens when the HGB title expires?

HGB is renewed by administrative application to the land office (BPN). Total tenure can reach 80 years. Non-renewal of compliant, operating HGB properties has no historical precedent.

Is the PT PMA structure safe?

Yes — it is well-established Indonesian law used by thousands of foreign investors. The key safeguard is engaging independent legal counsel (not the developer's) to review every document.

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About the author

leads brand and content at Samudra Villas. She researches and curates these guides working directly with the company's on-the-ground agents, notaries, and legal advisors in Lombok to keep each one accurate and up to date.

This guide is for informational purposes only and does not constitute legal, tax or financial advice. Ownership structures in Indonesia depend on buyer profile and final legal documentation. Always consult qualified independent Indonesian legal professionals before proceeding.