Indonesia’s Omnibus Law: Relaxed Foreign Ownership Laws on Real Estate | Dezan Shira & Associates

Indonesia has made it easier for foreigners to own real estate in the country through Government Regulation 18 of 2021 (GR 18/2021), which will trigger the largest changes to Indonesia’s property laws in the last 20 years.

GR 18/2021 makes amendments to the principal land rights/titles that cover:

• Right to manage (Hak Pengelolaan, HPL);
• Right to cultivate (Hak Guna Usaha, HGU);
• Right to use (Hak Pakai, HP);
• Right to build (Hak Guna Bangunan, HGB)
• Right of ownership over stacked units (Hak Milik Atas Satuan Rumah Susun, HMSRS);
• Rights for underground and overground space; and
• Land registration.

A notable provision under GR 18/2021 stipulates that foreigners and foreign legal entities can now own apartments and landed houses. However, foreigners will only be able to own apartments located in special economic zones, free trade zones, industrial estates, and other economic zones. Further, the property must be worth more than the minimum threshold – which differs depending on the province where the property is located.

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