Private Island Laws and Regulations
Foreign investment in Indonesian land involves navigating a complex legal framework. Although you can study many laws and regulations yourself, it is always wise to consult subject matter experts, legal advisors, and consultants who can tailor advice to your circumstances and investment plans. These laws often change or undergo amendments, so it is crucial to stay updated by working with agencies such as the Investment Coordinating Board (BKPM) or the National Land Agency (BPN).
Key Recommendations
Engaging professional legal counsel before finalizing any land investment strategy is essential. Lawyers and consultants can interpret the latest regulations, protect your interests, and ensure compliance with national laws. Although the list of regulations and decrees below is not exhaustive, it highlights several core frameworks governing foreign investment in Indonesian land.
Fundamental Legislation
Agrarian Law (Law No. 5 of 1960)
This law is the primary legislation on land in Indonesia. It defines land ownership, including Hak Milik (Right of Ownership) and Hak Guna Usaha (Right to Cultivate). Each category places different limits on foreign ownership.
Investment Law (Law No. 25 of 2007)
This law regulates foreign direct investment in Indonesia. It sets out procedures and incentives for overseas investors, including their land use rights. It also empowers the BKPM to manage and oversee foreign investment activities.
Law No. 5 of 1990
This legislation addresses the conservation of biological resources and their ecosystems. It includes rules on land use and environmental protection that can affect foreign investors.
Law No. 26 of 2007
This law governs spatial planning. It outlines how land use must comply with national planning priorities and zoning mechanisms.
Law No. 40 of 2007
This law grants Hak Pakai (Right to Use) to foreign individuals married to Indonesian citizens. It provides limited rights to land under specific conditions.
Presidential Regulations
Presidential Regulation No. 103 of 2015
This regulation specifies how foreigners may acquire land in Indonesia, including restrictions on size, use, and location. It also permits foreign investors to obtain Hak Guna Usaha (HGU) or Hak Pengelolaan (Management Rights) when approved by relevant authorities.
Presidential Regulation No. 36 of 2010
This framework governs land allocation for Special Economic Zones (SEZs). It sets out terms for foreign investment in designated areas.
Presidential Regulation No. 66 of 2020
This decree supports agrarian reform by guiding land redistribution and development for agriculture. Foreign investors who plan agricultural projects must ensure their activities comply with these provisions.
Presidential Regulation No. 79 of 2010
This regulation addresses land for public projects, including potential foreign investment and land acquisition procedures.
Presidential Regulation No. 13 of 2020
This regulation guides the Online Single Submission (OSS) system. It streamlines business licensing and approvals, including those related to foreign land investments.
Ministerial Regulations
Minister of Agrarian Affairs and Spatial Planning Regulation No. 13 of 2016
This rule offers more detailed procedures and requirements for foreigners to obtain HGU or Management Rights. It sets additional conditions for foreign participation in land usage.
Minister of Agrarian Affairs and Spatial Planning Regulation No. 11 of 2016
This regulation covers land consolidation and the development of a land bank, including guidelines for foreign investors who wish to participate.
Minister of Agrarian Affairs and Spatial Planning Regulation No. 6 of 2018
This rule provides directions for converting land rights, including Hak Guna Bangunan (Right to Build).
Minister of Agrarian Affairs and Spatial Planning Regulation No. 7 of 2019
This regulation focuses on land use permits for fisheries. It includes guidelines for foreign investment and how land can be used for fishing activities.
Minister of Agrarian Affairs and Spatial Planning Regulation No. 10 of 2019
This policy addresses land use for industrial estates. It sets forth conditions for foreign-owned companies interested in establishing industrial operations.
Minister of Agrarian Affairs and Spatial Planning Regulation No. 17 of 2020
This measure relates to land acquisition and usage for tourism projects. It describes conditions for foreign investment in tourist facilities and land leasing.
Minister of Agrarian Affairs and Spatial Planning Regulation No. 25 of 2021
This regulation details procedures for forestry land use. It encompasses how foreign entities can operate on land designated for forest activities.
Minister of Agrarian Affairs and Spatial Planning Regulation No. 13 of 2021
This rule outlines how foreigners can obtain Hak Pakai (Right to Use) for residential purposes.
Government Regulations
Government Regulation No. 24 of 1997
This regulation specifies procedures for granting Hak Guna Usaha (HGU) to foreign investors involved in agriculture.
Government Regulation No. 103 of 2000
This policy outlines how foreign holders of HGU can convert it into Hak Milik (Right of Ownership) under certain circumstances.
Government Regulation No. 14 of 2021
This rule addresses state land utilization and describes requirements for foreign entities seeking to develop such lands.
Government Regulation No. 88 of 2017
This regulation deals with abandoned land and how it may be revitalized. Foreign investors can participate under set guidelines.
Government Regulation No. 65 of 2021
This decree sets out land bank management procedures. It details how foreigners can invest in or use land managed by the land bank.
Government Regulation No. 95 of 2012
This directive outlines criteria and procedures for small-scale mining permits, including those relevant to foreign investors.
Government Regulation No. 44 of 1994
This policy governs land concessions for plantations. It includes provisions for foreign investment and land use.
Government Regulation No. 24 of 2016
Also known as the One Map Policy, this rule unifies spatial data and ensures better coordination in land management.
Government Regulation No. 12 of 2019
This measure provides guidelines for allocating land to housing developments. Foreign entities that invest in housing must comply with these provisions.
Government Regulation No. 68 of 2016
This policy deals with land acquisition for defense and security purposes. It outlines potential foreign involvement and the scope of permissible land use.
Government Regulation No. 88 of 2017
This document covers the utilization of abandoned land. It encourages foreign and domestic stakeholders to transform unused areas while complying with set conditions.
Additional Legislative Notes
Law No. 26 of 2006
This law establishes Indonesia’s Geospatial Information System. It impacts how land data is managed, including foreign holdings.
Law No. 41 of 1999
This statute oversees forestry management, restricting land usage in protected forest zones and allowing certain foreign-backed projects with special permits.
Minister of Environment and Forestry Regulation No. 17 of 2019
This guidance covers forest area licenses for specific uses, including foreign-backed development.
Government Regulation No. 95 of 2020
This regulation covers infrastructure development projects. It sets forth standards for foreign involvement and land acquisition.
Government Regulation No. 65 of 2021
This measure addresses the management of land banks, including how foreign investors may collaborate with these entities.
Conclusion and Further Advice
Because land and foreign investment regulations in Indonesia evolve over time, always verify whether more recent updates apply. Consult legal professionals or relevant government agencies like the BKPM or BPN for accurate and current guidance. With the right expert support, you can navigate these rules effectively and make well-informed decisions about your foreign investment in Indonesian land.
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