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About Indonesian Law

Posted by Admin on July 10, 2015
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overview-of-indonesian-law

Hak Milik (Right of Ownership)
This refers to absolute ownership of land and corresponds to freehold title in common law terms.
This right can only be held by an Indonesian citizen.
It can be sold, transferred, bequeathed, and mortgaged.

Nominee Structure
This form of ownership is commonly used with an Indonesian nominee and further binding agreements (such as right to use and right to sell) as well as a mortgage agreement which states that the Indonesian nominee has borrowed the money from the foreign investor in order to buy the property, are used thereby protecting the foreign investor.
The use of a competent Notaris and/ Attorney are advised to protect ones interest.

Hak Sewa (Right to Rent)
This is the right to use, leasing land owned by another party for building purposes.
This right cannot be registered at the land office and therefore does not exist in certificate form.
Land leases are not public documents.
This right may be held by a foreigner permanently domiciled in Indonesia or a foreign legal entity having a representative office in Indonesia and may not be mortgaged.

Hak Guna Bagunan (Right to Build)
This is the right to construct a building on a plot of land for a period of 20 to 30 years, and which can be renewed on consideration of the regional government.
This right can be sold, exchanged, transferred and mortgaged, and can be held directly by any corporate entity whether it is a local company or a government approved PMA (joint venture) company.

Hak Pakai (Right of Use)
This is the right to exploit state-owned or property owned by public or private persons/entities for a specific purpose for (generally) a finite period and occasionally for an indefinite period.
This land right may not be sold, transferred, or exchanged unless specifically stated in the agreement.
Hak Pakai may be held by an Indonesian individual or entity, or a foreign legal entity with representative office in Indonesia such as foreign Banks, embassies, etc.

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