Investing as a Foreigner
CAN A FOREIGNER BUY THE LAND?
With our support, investing as a foreigner in Indonesia has never been easier. We will guide you every step of the way, helping you achieve target whether you want to purchase land or develop a construction project.
The Indonesian government warmly welcomes foreign investors, offering safe, clear, and accessible investment options. With our assistance, you will easily navigate the process and take advantage of the many opportunities available.
Foreign investors have two main options for investing in Indonesia:
Investing through a PT PMA in Indonesia
Investing in Indonesia through a PT PMA (Perseroan Terbatas Penanaman Modal Asing) provides foreign investors with a solid and secure foundation for entering one of Southeast Asia’s fastest-growing markets. This approach allows for land ownership, project development, and business operations under Indonesian law. For those looking to invest abundantly in Indonesia, a PT PMA is the ideal solution for foreign investors seeking stability and growth.
Why Choose a PT PMA?
A PT PMA offers foreign investors full control over their investment. By owning the company, you can acquire land and assets under the “Right to Build” (HGB) certificate, ensuring legal ownership. This option is ideal for long-term projects, large-scale developments, and those seeking stable corporate structures.
Ownership and Rights
With a PT PMA, the company owns the land and properties, offering indefinite ownership under Indonesian law. This means you can build, manage, or transfer assets without restrictions. However, taxes must be paid to the state every 30 years for the first renewal, then every 20 years, and again after another 30 years to extend the validity of the ownership.
Taxation on Earnings
Income generated through a PT PMA is subject to Indonesian tax laws, with rates ranging from 10% to 20%. Taxation depends on the type of business activity conducted. Our tax consulting services are essential to optimize costs and ensure compliance.
Contract Flexibility
PT PMA structures allow significant flexibility, including asset transfers, corporate restructuring, or succession planning. Company ownership ensures long-term stability and adaptability.
Market Entry Timeframe
The establishment of a PT PMA typically takes one/two months for registration, permitting, and HGB certificate acquisition. However, it ensures comprehensive legal protection for long-term operations.
Environmental and Legal Compliance
A PT PMA ensures full compliance with Indonesian laws, including environmental regulations. Our team provides ongoing legal support to ensure sustainable project development.
Risk Management and Security
PT PMAs provide robust legal protection, minimizing risks associated with regulatory changes. Indefinite corporate ownership reduces uncertainties and enhances investment security.
Exit Strategy
PT PMAs allow flexible exit strategies, including asset sales, corporate restructuring, or liquidation. Investors can easily monetize their properties or transfer ownership without restrictions.
Inheritance and Succession
PT PMAs ensure a seamless transfer of assets to heirs or business partners under Indonesian corporate law, securing long-term investment continuity. Additionally, they facilitate succession planning, offering flexible options for generational transfer and legal protection, avoiding complications and ensuring a smooth transition of business and asset value.
Application Sectors
PT PMAs are ideal for large-scale projects in tourism, hospitality, commerce, residential development, and many other opportunities offered by the Indonesian market. These structures provide direct market access, allowing investors to leverage the potential of various sectors while ensuring flexibility and legal protection.
Process Overview for PT PMA
Setting up a PT PMA includes:
- Registering the company with local authorities.
- Verifying the property legality (including obtaining the HGB certificate).
- Negotiating contract terms and agreeing on the lease duration.
- Paying the 5% tax on the land acquisition price.
- Registering the property with local authorities for legal protection and ensuring the agreement is legally binding.
- Ongoing support for tax compliance and management, including updating the HGB certificate, covering all legal and bureaucratic costs related to the land acquisition.
- Depositing the required capital as mandated by the government, which can be used for investments and is freely available for the owner’s use.
Invest through a Leasehold Contract
A leasehold contract (Hak Sewa) provides foreign investors a simple, cost-effective, and legally secure way to access Indonesia’s real estate market. With reduced bureaucracy, faster acquisition times, and flexible contract terms, leasehold is perfect for those who want to develop projects, generate income, or enjoy long-term property rights without the need to establish a local company.
Why Choose Leasehold?
Leasehold is a simpler alternative that provides foreign investors with the legal right to use and develop land or buildings. It’s an excellent option for those seeking a low-cost, flexible entry into the Indonesian market, particularly for personal or smaller-scale commercial projects.
Ownership and Rights
Leasehold grants the tenant exclusive rights to use and develop land or buildings for the agreed period, up to 70 years (with a 30+20+20 year formula), with options for renewal.
Taxation on Earnings
Income generated through a leasehold is subject to Indonesian tax laws, with rates ranging from 10% to 20%. Taxation depends on the type of business activity conducted. Our tax consulting services are essential to optimize costs and ensure compliance.
Contract Flexibility
Leasehold offers extensive possibilities for customization. Specific clauses can be negotiated, such as automatic renewal options or the possibility to terminate the contract early if needed.
Market Entry Timeframe
Leasehold contracts can be finalized in weeks, making them ideal for investors seeking faster market access with fewer bureaucratic hurdles.
Environmental and Legal Compliance
Leasehold agreements are also subject to local regulations. Proper due diligence is essential to avoid disputes or delays, especially for development projects requiring permits.
Risk Management and Security
Leasehold offers security through legally binding contracts, but it may carry higher risks regarding long-term renewal. Our clear terms and specialized legal advice provide a secure solution for investing through this option.
Exit Strategy
Leasehold rights can be resold or transferred during the contract period, offering flexibility.
Inheritance and Succession
Leasehold contracts are transferable to heirs, ensuring continuity for family or business partners.
Application Sectors
Leasehold suits various investment types, from boutique hotels to vacation homes and commercial spaces, making it versatile for smaller-scale investors.
Process Overview for Leasehold
Leasehold acquisition includes:
- Negotiating contract terms and agreeing on the lease duration.
- Verifying the property legality (including obtaining the HGB certificate).
- Paying the 5% tax on the land acquisition price.
- Registering the agreement with local authorities for legal protection and ensuring the lease terms are compliant with Indonesian regulations, with all legal and bureaucratic costs related to the land acquisition included.
For both options, our team provides comprehensive support to ensure that your investment in Indonesia is secure, efficient, and aligned with your objectives. Whether you choose the PT PMA option for large investments or the cost-effective flexibility of a leasehold contract, we are here to guide you every step of the way.
With our expertise, you can enter the Indonesian market with confidence and enjoy long-term success.