The Real Story Behind Buying a PT PMA Company with Property

Author Kepri Estates
Reading Time Approximately 12 minutes

Executive Summary

Foreign investors cannot own freehold land in Indonesia. The most secure and widely used alternative is buying an existing PT PMA company that already holds registered land titles rather than purchasing land directly.

This structure allows foreign buyers to legally control islands, beachfront land, and resort assets through company ownership. When executed correctly, it provides long-term tenure, resale flexibility, bank recognition, and regulatory compliance without nominee arrangements.

This approach is consistently referenced in international investment analysis by organisations such as World Bank, PwC Indonesia, and Deloitte Indonesia when assessing foreign direct investment structures in emerging markets.

This article explains how PT PMA land asset acquisition works in practice, focusing exclusively on acquiring the company that owns the land, not forming a new entity.

What Is a PT PMA Land Asset Acquisition

A PT PMA land asset acquisition is the purchase of shares in a foreign-owned Indonesian company that already holds land titles such as Hak Guna Bangunan or Hak Pakai.

Instead of re-titling land, the investor acquires the company that owns it. The land remains registered with Indonesia’s National Land Agency in the company’s name, while legal control transfers through share ownership.

This structure is standard for private islands, beachfront resorts, integrated villa developments, and commercial coastal land. It is the dominant transaction model described in Indonesian real estate briefings published by Indonesia Investment Coordinating Board (BKPM) and international law firms such as Baker McKenzie.

Can Foreigners Buy Land in Indonesia Using a PT PMA

Foreigners cannot own freehold land in Indonesia. However, by buying an existing PT PMA company that holds registered land titles such as Hak Guna Bangunan, foreign investors can legally control, develop, lease, and resell property through company ownership rather than personal title.

This position is grounded in Indonesia’s Basic Agrarian Law and Foreign Investment Law and is administered through the national land and investment framework overseen by the Ministry of Agrarian Affairs and the Investment Coordinating Board.

Why Investors Buy Existing PT PMA Companies

Buying an existing PT PMA with land assets offers structural advantages unavailable through new company formation or leasehold arrangements.

Key advantages include immediate control of registered land titles, continuity of zoning and permits, cleaner exit pathways through share sale, higher buyer confidence at resale, and reduced execution risk for remote or island assets.

In practice, most island and resort transactions in Indonesia are executed through PT PMA share acquisitions rather than direct land transfers. This approach is routinely used for private islands and large coastal assets where zoning continuity and permit preservation materially affect valuation and exit timing, a point repeatedly noted in transaction commentary by PwC Indonesia and Deloitte Indonesia.

Legal Basis for PT PMA Land Ownership

Under Indonesia’s Basic Agrarian Law, only citizens may hold freehold land. Foreign investors instead rely on company-held land rights regulated under the Foreign Investment Law.

A PT PMA may legally hold Hak Guna Bangunan for commercial building rights, Hak Pakai for regulated usage rights, and Hak Sewa for long-term lease rights.

These rights are registered with the National Land Agency, issued in the company’s legal name, and transferable through share acquisition.

Hak Guna Bangunan is the dominant title used for island and resort assets. It provides an initial 30-year tenure with extensions and renewals allowing control for up to 80 years and is fully recognised by Indonesian banks, notaries, and regulators. This treatment is consistent with legal guidance published by Baker McKenzie, PwC Indonesia, and BDO Indonesia.

Is It Better to Buy a PT PMA or Set One Up

Buying an existing PT PMA that already owns land is often safer than forming a new one. Existing titles, zoning approvals, and permits remain intact, reducing execution risk and improving exit options, provided the company passes full legal, tax, and compliance due diligence.

This distinction is frequently emphasised in Indonesian mergers and acquisitions risk notes published by Deloitte Indonesia and Allen & Overy.

Capital Rules When Buying an Existing PT PMA

Capital compliance transfers with the company when it is acquired.

As of 2025, the minimum paid-up capital requirement is IDR 2.5 billion, with a total investment plan of at least IDR 10 billion per approved business activity. Paid-up capital is subject to a 12-month lock-in period.

These thresholds are set by Indonesia’s investment authority and summarised in foreign investment policy updates published by the World Bank.

When acquiring an existing PT PMA, paid-up capital must already be compliant, land value may count toward realised investment, and historical investment reporting and tax filings are critical. In practice, compliance history matters more than headline capital figures.

Title Security and Exit Mechanics

When land is held by a PT PMA, the company name appears on the land certificate, rights are enforceable against third parties, and the land can be developed, leased, refinanced, or sold.

Exit is typically achieved through a sale of company shares rather than a transfer of the land itself. This preserves permits, avoids re-titling delays, reduces tax friction, and makes the asset more attractive to institutional or offshore buyers. Share-based exits are a standard feature of cross-border property transactions described by Allen & Overy and Baker McKenzie.

Due Diligence When Buying a PT PMA with Land

Buying a PT PMA means acquiring all assets and liabilities inside the company. Proper due diligence is therefore essential.

Land and zoning checks include verification of land certificates, title type and remaining tenure, zoning alignment, and any coastal, forestry, or conservation overlays.

Corporate and compliance checks include review of the articles of association, company registration status, investment reporting history, and outstanding regulatory obligations.

Financial and tax checks include verification of paid-up capital, investment realisation records, and identification of any tax arrears or disputes.

These diligence steps align with best-practice frameworks published by PwC Indonesia, Deloitte Indonesia, and the World Bank for emerging-market real estate acquisitions.

What Are the Main Risks When Buying a PT PMA with Land

The primary risks are zoning mismatches, undisclosed liabilities, weak shareholder agreements, and incomplete compliance history. These risks are mitigated through land title verification, regulatory and reporting review, tax clearance checks, and professionally drafted shareholder control documents, as recommended in international transaction guidance published by BDO Indonesia and Allen & Overy.

Share Acquisition Versus Asset Acquisition

Most PT PMA land transactions are executed through share acquisition.

Share acquisition preserves land titles, permits, and zoning approvals. Asset acquisition typically triggers re-titling, additional taxes, and regulatory friction.

For investment-grade island and resort assets, share acquisition is the default approach and mirrors standard practice described in global real estate mergers and acquisitions literature.

Shareholder Agreements and Control

Legal title alone is insufficient without corporate control. Shareholder agreements govern how the company and its assets are managed after acquisition.

A professional agreement should address exit rights, voting thresholds, deadlock resolution, dividend policy, and dispute resolution through recognised international arbitration venues such as Singapore or Hong Kong.

These protections are standard in professional cross-border property transactions and are consistently referenced by Baker McKenzie and Allen & Overy.

Tax Considerations for PT PMA Land Assets

Acquisition-related taxes typically include transfer duty, seller income tax, value-added tax where applicable, and notary or land deed fees.

Ongoing taxes may include corporate income tax, land and building tax, dividend withholding tax, and value-added tax on rental income.

Many of these costs are deductible at company level, improving net yields compared with personal ownership or leasehold structures, as outlined in PwC Indonesia tax summaries.

Is PT PMA Better Than Leasehold for Foreign Investors

PT PMA ownership provides stronger legal control and exit flexibility than leasehold. While leasehold arrangements are simpler and cheaper upfront, PT PMA structures allow longer tenure, financing options, subdivision, and resale through share transfer, making them more suitable for investment-grade assets.

Key Takeaways

Foreigners cannot own freehold land in Indonesia. Buying a PT PMA company that already owns land is the most secure and widely accepted alternative.

Hak Guna Bangunan titles held by a PT PMA can provide enforceable rights for up to 80 years. Share acquisition preserves permits, zoning, and exit value.

Successful outcomes depend on rigorous due diligence, strong shareholder control documentation, and a clean compliance history. For island and resort assets, particularly in the Anambas region, this structure underpins most professional transactions and remains the benchmark approach used by experienced foreign investors.

References

Indonesia Investment Coordinating Board (BKPM)
https://www.bkpm.go.id

Indonesia Online Single Submission (OSS) System
https://oss.go.id

Ministry of Agrarian Affairs and Spatial Planning / National Land Agency (ATR/BPN)
https://www.atrbpn.go.id

Baker McKenzie – Indonesia Property & Land Law
https://www.bakermckenzie.com

BDO Indonesia – Tax and Compliance for Foreign-Owned Companies
https://www.bdo.co.id