1.
A Guide for Investors and Developers 2014 | Issue 1
S o u t h e a s t I n d o n e s i a
• Lomboks Tourist Hot Spots • The Gilis • Kuta and Southern Lombok • Senggigi • Lombok Tourism Growth
• Villas and Villa Plots • Bonus: Foreign Buyers Guide to Indonesian Property Law

2.
Welcome to Southeast Indonesia 01
Focus On Lombok 02
Lombok Tourist Development 03
News Bites: New projects, Rumors and Hot Areas 04
Lombok’s Growing Tourist Market 06
Villa Plots Take Off 09
Villa Plot Market in Lombok 09
Senggigi Area 10
Gilis 14
Kuta Area 18
Bonus: Foreign Buyers Guide to Indonesian Property Law 22
CONTENT

3.
Welcome to
Southeast Indonesia.
We represent an international team, based in
Lombok and Singapore.
In addition to property brokerage, our projects
in Southeast Indonesia include innovative
hospitality solutions, high end hotels, villas and
villa plots, with more to come.
From the Gilis to Lombok, Sumbawa to Flores,
Southeast Indonesia has come into its as a
destination for both visitors and investors. And
with land prices still significantly lower than
Bali, potential returns remain high.
We created Southeast Indonesia Property to
help other investors navigate through this
exciting emerging market, by providing safe
guidelines and transparent processes.
It is our hope that you find the information in
this magazine informative and helpful as you
learn about this exciting, growing area.
www.southeastindonesiaproperty.com
01

4.
Focuson
Lombok
Bali’s sister island has come alive this year with new projects,
increases in tourism arrivals, infrastructure improvements
and steadily rising property values.
Outside factors have also helped
to raise interest in Lombok.
Much of Bali’s prime land is only
available for lease; this fact,
when coupled with prevailing
high prices, has shrunken the
profit margin significantly in
Bali. With opportunity cost
relatively lower and hotel
occupancies often higher than
those in Bali, Lombok has
become a more attractive
location.
Nationally, Indonesia’s middle
class of over 100 million people
continues to become more
affluent, pumping more and
more discretionary spending into
the national economy.
All of these factors combine to
make Lombok’s ascendance as a
new prime tourist destination no
longer a dream but a reality.
bet on Lombok over the last 20
years for a number of reasons.
The physical and cultural
proximity to Bali being a major
one. The west of the island,
for instance, supports a large
Balinese population, who have
brought many of their traditions
and culture to Lombok.
Physically, Lombok contains
hundreds of small white
sandy bays backed by rugged
mountains, creating virtually
unlimited picture perfect
beachfront areas. This island
also sports Mt. Rinjani, one of
the tallest peaks in Indonesia,
visited by thousands of trekking
enthusiasts each year. Rinjani
as well as the well established
tourist areas of Senggigi and the
Three Gilis also give Lombok an
existing tourism infrastructure
which will enhance and support
the future growth of the island.
For years, Lombok has been
hailed by visitors and investors
as “The Next Bali”. While tourist
growth and property values
have consistently risen, the
island has yet to see explosive
growth of the sort experienced
by Bali over the last six years.
In 2013-14, however, we
have witnessed a new wave
of property investment,
many completed projects,
skyrocketing visitor numbers
and hotel occupancy rates, as
well as greatly improved access
to the island and regions within
the island. All of these indicators
suggest that real change is
converging on Lombok, likely
leading to a tipping point within
the next 3 – 5 years.
While Indonesia possesses
thousands of beautiful islands,
many locals and foreigners have
02

5.
03
Lombok’s
Tourist
Development
The Three Gilis and Mt. Rinjani
of North Lombok, and Senggigi
of West Lombok have hosted
visitors for many years, providing
the foundation for Lomboks
tourist industry.
The Kuta area in the south
is now growing fast, while
Sekotong, Tanjung Ringgit and
the small giilis surrounding
Lombok are attracting interest as
future destinations.
Well Established
Tourist Areas
Rapidly Growing
Tourist Areas
Future
Tourist Areas

6.
04
Aston Branded
Luxury Villa Project
Attracts Attention
to West Lombok
Royal Kamuela Villas, a 50 unit
residential villa complex located
in Meninting, Lombok, between
Senggigi and Mataram, is
reporting over 70% of units sold
in the projects starting phase
of development. The project is
being managed by Archipelago
International, formerly the Aston
Group.
The success of the project,
with units reportedly priced
between US$400,000-800,000,
signals Lomboks coming of age
as a destination, as it begins
to attract high profile projects
which formerly were only seen
in Southern Bali. The location
suggests that suburban Meninting
may be moving towards becoming
a higher end villa and residential
area, and that other properties
on the less expensive outskirts of
the tourist epicenters of Senggigi,
Kuta and the Gilis may hold
strong potential as well.
Private Island
Development in East
Lombok Slated for
2014
Ocean Blue Resort on Gili Sanut,
East Lombok, will complete
sometime in 2014, according to
Ocean Blue Group. The resort
will be a unique development
in the area, as it is formed by a
working partnership between the
groups Singapore based investors
and the local government. Ocean
Blue will develop and manage
an entire 7.5 hectare island for
their high end private resort. In
order to fulfill their obligations,
the developers were required
to meet certain environmental
qualifications, as well as build
new residences and infrastructure
on the mainland for the islands
former residents.
The project will undoubtedly
not only open up East Lomboks
secluded beaches and islands to
more high end development, but
pave the way for similar projects
on government owned land in
the future.
NewsBitesNewprojects,rumorsandhotareas

7.
05
New Projects Open
Up the Northwest
Lombok Coastline
Lomboks northwestern coastline
provides spectacular ocean cliffs,
white sand beaches fringed
by coconut palms, and tall
mountains covered in tropical
foliage. Colorful sunsets over the
ocean and Bali’s Mt. Agung are
a popular draw for both locals
and tourists, who are served by
the hundreds of small food stalls
offering fried corn, fish and other
local flavors along this popular
route between the Three Gilis and
Senggigi. Until recently, the area
sported only a few hotels and
villas among the fishing villages;
new developments, however,
suggest that this area will soon
become a new tourist hub for
West Lombok.
KERANDANGAN
Up until the 1990s, the bay and
small village of Kerandangan
marked the end of the paved
road in the north; its small valley
was and still is known as a haven
for expats in search of privacy.
2013 saw both the soft opening
of Svarga resort, a high end
bungalow and hotel complex,
as well as the construction of
a new large seaview villa plot
development. A seperate large
hillside development was started
in Q2 2014.
TELUK NARE AND BANGSAL
These bays are known primarily
as the jumping off point for
private and public boats heading
between Lombok and the Three
Gilis. In the future, however,
they may become known as
destinations themselves. While
the Gilis abound in restaurants,
bars and guesthouses, the
infrastructure on the islands is
still limited, as is the amount of
small plots available for private
villas. With their lower prices,
fantastic views and proximity to
not only the Gilis but the towns of
Tanjung, Senggigi and Mataram,
the hills around Teluk Nare and
Bangsal have begun to be noticed
by investors. Several new villa
projects are currently under
construction in the area, from
private units to larger complexes.
NIPAH
Situated almost perfectly halfway between the Gilis
and Senggigi, Nipah bay may be the area to watch
over the next several years. The areas brilliant white
sand beach, turquoise waters, sunset views of Mt.
Agung and rugged mountainous backdrop add even
more to its attraction. 2012-13 has seen a flurry of
activity and improvements on the beachfront and
nearby hillsides, suggesting this area may become a
crucial link between the already developed areas of
Senggigi and the Three Gilis.
Half of the beachfront has already been broken into
small plots for boutique hotel developments, with
one already in progress. Villa plots are currently
being sold on one of the nearby hillsides, with many
more planned in the future.

8.
06
Lombok’s Growing Tourist MarketNew direct flights and greater awareness fuels a sharp rise in visitor numbers and hotel occupancy
The hotel sector in Lombok has experienced
strong positive growth over the last few
years, which can easily be seen in rising
occupancy rates, construction of new city
and beach hotels, as well as growing tourist
arrivals. These strong fundamentals, as
well as new infrastructure development,
government promotion of local tourism and
the development of new regions for tourist
expansion all contribute to the areas strong
outlook.
Lombok lies directly to the east of Bali and
has many cultural similarities to its famous
neighbor. In fact, Lombok’s diverse
blend of Balinese Hindu, Sasak, Arab,
Javanese and Chinese cultures makes
it unique in the area; simultaneously
familiar to visitors who have already
experienced Bali, as well as a new
experience in and of itself. As Bali
experiences more overcrowding
and infrastructure problems, many
visitors are being drawn to the more
pristine island of Lombok as an
alternative.
Lombok features well established
destinations such as Senggigi, the
Three Gilis (Gili Trawangan, Gili
Air, and Gili Meno), Mt. Rinjani,
and Kuta. Sekotong and East
Lombok also feature many as yet
untapped potential resources for
diving, trekking and surfing, while
the city of Mataram attracts local
business travelers and students from
throughout Eastern Indonesia.
In addition to these advantages,
Lombok serves as a hub and gateway
to other growing destinations in
Southeast Indonesia, such as
Sumbawa and Flores.
VISITOR ARRIVALS
Between 2001 and 2012, total
arrivals to Lombok by plane grew at
a compound annual growth rate of
15.2%, according to data released
by Badan Pusat Statistik Indonesia
(BPSI).
208%Increase in visitor
arrivals, November 2013
over November 2012
In 2001, air arrivals totaled 181,429
passengers. By 2012, arrivals by
plane had grown to 858,710. By
the end of 2013 the early effects
of the new airport and increased
direct flights was even more evident;
Lombok International received 5,386
new visitor arrivals in November
alone, a 208% increase over the
previous year.
These numbers are expected to
increase significantly by 2015, with

9.
HOTEL VISITORS AND
OCCUPANCY
The most dramatic growth seen in
recent years was the 61.8% jump
in international guests to star rated
hotels from 2011 to 2012. This
increase could continue over the
next several years, as more direct
flights make the island accessible
to growing numbers of international
visitors. In 2012, the most popular
country of origin for international
visitors was Singapore, followed
by the UK, Malaysia, Germany and
France. These numbers reflect the
fact that prior to the addition of
direct flights from Australia in late
2013, the potentially lucrative Aussie
market was largely untapped.
61.8%Growth of international
visitors to star rated
hotels, 2011-2012
While international arrivals,
particularly Australian, may provide
the strongest growth over the next
several years, Indonesia’s robust and
increasingly well-heeled domestic
travelers still form the bulk of hotel
arrivals. With domestic guests
now outnumbering Australians and
Japanese in Bali, we could expect to
see this trend continue in Lombok
as well.
According to BPSI, total arrivals to
star rated hotels grew from 165,953
to 369,855 between 2007 and 2012,
a compound growth rate of 17.4%.
Of the 369,855 arrivals in 2012,
253,642 were domestic visitors, with
the remaining 116,213 from abroad.
2010 to 2012 saw a 20% increase
in 1-5 star hotel rooms, from 1,931
rooms in 2010 to 2,794 in 2012.
Three and four star hotels constitute
the bulk of these rooms, with 35%
and 40%, respectively.
the anticipated additions of more direct
flights from Australia, Malaysia, Hong
Kong and Singapore, as well as increased
domestic flights.
Currently the newly completed Lombok
International Airport sees 8 direct flights
per week from Singapore, 7 per week
from Kuala Lumpur and 4 per week from
Perth, Australia. Domestic destinations
such as Jakarta Bali, Surabaya, Sumbawa,
Jogjakarta and Makassar are served by over
220 direct flights per week.
Additionally, many visitors from Bali opt for
a direct speed boat either to the Three Gilis
or to Senggigi. There are currently dozens
of operators ferrying passengers every day
of the week, with rates and travel times
competitive with local flights.
07
The new Lombok International Airport currently
hosts 239 regular scheduled domestic and
international filghts per week.

10.
According to data published by
HVS research, hotel occupancy
in Lombok grew from 56.4% in
2010 to a healthy 70.2% in 2012.
70.2%Avg. occupancy 2012
Due to a number of factors such
as increasingly better access,
overcrowding in Bali, a growing
domestic market, well established
tourism areas and increased
international exposure, the future
of the hotel business in Lombok
looks very positive both in the
short and long term. Silent watcher over Mataram’s Mayura Hindu temple
Far Left : Total arrivals to star rated hotels,
2007 and 2012
Left : Star hotel guests point of origin, 2012
08

11.
09
Villa Plots Take Off
The supply of build-ready
villa plots in West Lombok
is still very limited despite
rising customer demand.
This, coupled with views
that are simply unavailable
in much of Bali, as well as
prices that are far lower
than Bali, will continue to
contribute to rising values
and buyer interest in
Lombok villa plots.
The upper right graph
compares the rising value
of undeveloped plots
(average size 5000 M2
) in
Seminyak, Jimbaran, and
Canggu with the price of
undeveloped seaview hillside plots
in West Lombok (avg. size 1 Hectare
+) and developed villa plots in West
Lombok, from year-end 2007 to
year-end 2013. Bali data is based on
surveys published by Knight Frank,
Lombok data is based on original
market research.
The discrepancy between the relative
value rise of developed villa plots
with undeveloped hillsides in West
Lombok likely reflects the current
limited supply of developed plots,
which can be expected to continue
for the next several years.
As the upper left graph shows, while
the necessary initial investment is
higher than 2007, the relative profit
potential from the development and
sale of hillside villa plots in West
Lombok is currently much greater
than ever before.
VILLA PLOT MARKET
IN LOMBOK
Purchase of unimproved land in emerging areas
for the purpose of creating and reselling villa plots
has been an investor favorite in Bali and Lombok
for years. Significant returns can be achieved
with, depending on the plot, a small amount of
infrastructure work. Where to purchase, expected
returns and turnaround time largely depends on
the area chosen.
MATURE MARKETS
Senggigi, Montong, Meninting, Batu Layar,
Kerandangan. Multiple completed, sold, and
ongoing projects. Most unimproved land has been
purchased by investors.
EMERGING MARKETS
Mangsit, Malimbu, Kuta, Selong Belanak, Torok,
Gerupuk, Nipah, Bangsal. Multiple projects in
planning, already begun, and for sale. Some locally
owned land remaining, strong investor interest,
expect to become mature market in 2-5 years.
MatureMarkets
EmergingMarkets
% Gross Profit West Lombok
Villa Plot Development
Rise in Value 2007 - 2013

12.
010

13.
Senggigi Area

14.
012
Senggigi is the most well
established tourist hub on the
island of Lombok, with growth
picking up significantly over
the last several years. The
town itself is a small, densely
developed enclave situated
around several crescent
shaped bays, providing plenty
of locations for sunset drinks,
meals, walks and swimming.
There are several popular
higher end restaurants,
A. Gili Trawangan, Air, Meno
Dense low to high end hotels
B. Sire
Golf course, low density Five Star
hotels.
C. Bangsal, Teluk Nare
Private boats to Gilis, new villa
projects
D. Malimbu, Nipah, Pandangan
Planned boutique hotels and villas
E. Mangsit
High end hotels and villas, planned
high end hillside villas
F. Central Senggigi
Dense low to mid range hotels,
restaurants
G. Montong
Local entertainment, low to mid
range hotels,
high end hillside villas
H. Meninting
Mid range local housing, high end
villa projects, commercial
I. Mataram
Mixed local housing, low to mid
range city hotels, dense commercial
although prices are still quite low compared
to Bali or Jakarta. These are supplemented
by a variety of international bakeries, hotel
restaurants, seafood grills and more.
The road from Mataram and the new airport
leads through the quickly developing
areas of Meninting and Montong. Among
the hills and valleys of these areas can
be found some of Lomboks oldest expat
neighborhoods, while along the main road
new clubs catering to tourists and local
students pop up continually. Empty land
directly off the main road as well as towards
the beach is quickly being converted to
suburbs for the local housing market.
North of the town, towards the Three
Gilis and North Lombok, the highway runs
through a series of breathtaking bays and
hillsides loved by visitors and locals for
their breathtaking views. Watch these areas
around Nipah, Malimbu, Kerandangan and
Pandangan to quickly fill up with hotels and
villas over the next several years.

15.
013
Successful projects and private villas
in Meninting, Kerandangan, Mangsit
and around the northwest coastline
have prompted a flurry of new
building and roadworks for future
projects. Before 2015, new projects
are expected to open up in Montong,
Mangsit, Batu Layer, and Nipah.
A limited number of small plots
available, rising demand and high
occupancies should keep the finished
villa and villa plot market going
strong for the next several years.
North of Senggigi features many half
moon bays such as Malimbu, Nipah
and Pandangan. These areas are
already famous for their panoramic
sunsets and street vendors of fried
fish and corn, however developments
have so far been limited to small private
villas. The first larger projects to open
up the area have begun in Nipah, with
more undoubtedly on the way over the
coming years.
Due to its well established status,
growing villa and hotel market, and
strategic location between Mataram and
the Gilis, we can expect the Senggigi
area to remain as a premium and safe
investment for some years to come.
Pictures (counter-clock wise) :
1. Beachfront private villa in Kerandangan
2. Antique wooden furniture
graces a hillside villa
3. Beachfront villa plot in Teluk Bora,
north of Senggigi
4. View from Malimbu Point

16.
014

17.
Gilis

18.
016
Pictures (from top to bottom) :
1. The small islands of East
Lombok, near Tanjung Ringgit
2. The “Southern Gilis”
near Sekotong
3. Government owned islands in
East Lombok and Sumbawa
4. The famous “Three Gilis” or Air,
Meno and Trawangan in
North Lombok
Thirty years ago, Lombok’s Gili
Trawangan was a forgotten
island, occupied only by
itinerant fisherman. Today
the small island is alive 24
hours per day with nightlife,
diving schools, backpacker
guesthouses and luxury
accommodation. This car and
motorbike free island has
always held a special draw
with visitors, whether they be
divers or simply backpackers
wishing to relax with a beer
on its white sand beaches.
Trawangan’s neighbors, Gili
Air and Gili Meno have also
taken off in recent years.
Both support the same car
free getaway island culture,
but with less of Trawangans
famous party-all-night
hedonism. Gili Meno is
known as the quietest,
popular with honeymooners
and snorkelers who wish to
explore the reefs directly in
front of their guest house
door. Gili Air, the smallest
of the three, offers a
combination; while most of
the perimeter is covered in
small wooden guesthouses
and bars, the island still
sports a quiet, low key and
exclusive vibe.
While the three Gilis of
North Lombok are the
regions most famous, there
are also many other small
Gilis in the Sekotong area,
just a 30 minute speedboat
trip south of Senggigi. With
a new harbor in Sekotong,
and the growing amount
of speedboats serving
Senggigi and the northern
Three Gilis, the beautiful
Southern Gilis may not stay
hidden for long either.
Eastern Lombok, Northern
Sumbawa and Flores all
contain many small, almost
deserted islands similar to
the famous Gilis as well. Sunset over Bali from Gili Trawangan

19.
017
The Three Gilis are famous for their coral
reefs and native turtle habitats. Visitors
can view the underwater flora and fauna
through snorkels or by taking a dive course
at one of the many schools on the islands.
Over the last several years, all three islands
have sprouted a number of high quality
restaurants, villas and hotels as well. While
there are still plenty of the backpacker
bungalows that the islands are famous for,
quickly rising land values and limited area
should drive the opening of more high end
facilities in the future.
Gili Trawangans sunset side has remained
relatively quite until recently. Today there
are several new hotels and villa projects,
with plans for more over the next several
years. With stunning sunsets over Balis
Mt. Agung nightly, it’s easy to see why.
The land on Gili Trawangan, Meno and
Air is all privately owned by individuals
or PT companies. The other small islands
around Lombok, Sumbawa and Flores
offer a mixture of privately owned and
government owned land. Several projects
are currently in the works around the area
to create government-private partnerships
for the management of state owned
islands, with the aim of increasing tourism
while conserving the areas unique natural
ecosystems. Small Gili near Tanjung Ringgit
Gili Meno and Trawangan seen from Gili Air

20.
018

21.
Kuta Area

22.
020
The Kuta area comprises a
series of large white sand bays
stretching from East Lombok to
Sekotong in the west, all within
around 45 minutes of the new
airport. Add to this dozens of
famous surf breaks, hillsides with
ocean views from nearly every
angle, and a planned 300 hectare
resort development to support
the whole area, and it’s easy to
see why many investors have
their eyes on Kuta.
The 300+ hectare Mandalika
resort area at the center of Kuta
has seen many starts and stops
over the years, mostly due to
fallout from the Bali bombings
and the 2008 global financial
crisis. As of 2013, however,
French hotelier Club Med had
officially announced a partnership
with Indonesian developer MNC
group to manage the first stage
of the resort complex, which
would be built by MNC under
the authority of the Bali Tourism
Development Corporation (BTDC),
the state owned company in
charge of developing the site.
Promoting even more speculation
of big things to come, the entire
Tanjung Aan beach was cleared of
temporary restaurants and kiosks
in late 2013, creating a wide clear
beach for large developers.
While the BTDC project has
locked down most of the
beachfront in the central Kuta
area, there remain many beaches
both to the west and to the east
with plots still available. East of
Kuta, Tampa, Mawun, Selong
Belanak, Serangan and Torok
Aik Belik abound in hillsides and
beachfronts still available at low
prices. With new paved roads
putting these eastern bays as well
as the western bays of Bumbang
and Awang all under an hour from
the new airport, the entire south
is now open and simple to access.
Kuta Area on Map

23.
021
Selong Belanak features nearly year-round greenery, a classic white sand
beach, with jagged rock islands and hillsides peering out over the ocean. With
these natural features it is easy to see why this bay west of Kuta has attracted
attention over the years. New tarmac roads link the area directly to Kuta, the
airport and later, Sekotong, making access better than ever. Prices have risen
dramatically on the beachfront and flat land behind the beach, however there
are several pristine hillsides with views of the bay and surrounding area still
available from local owners, at relatively low prices.
Although less famous than nearby Selong Belanak, Torok Aik Belik may
contain some of the southern areas best “virgin territory”. Until recently
the area was largely inaccessible, which
may explain the pristine look of Torok’s
cascading rice fields and long wide
beachfront. Fortunately for potential
buyers, land prices at Torok are still quite
low compared to other bays in the south.
A tarmac road linking Torok to Kuta and
Selong Belanak is set to complete this year,
while another link road connecting the bay
to Sekotong and Mataram-Senggigi is also
in progress.
Tanjung Aan Beach of Central Kuta View of Selong Belanak from nearby Hillside
Torok Aik Belik

24.
022
Bonus: Foreign Buyers Guide to
Indonesian Property Law
1. Indonesian Land Titles
The three most common land titles used when investing
in Indonesian Property are Hak Milik, Hak Guna
Bangunan and Hak Pakai.
Hak Milik (Right to Own)
This is what is commonly referred to as a “freehold”
title. Hak Milik titles may be held by Indonesian
individuals, state banks, agricultural cooperatives and
specific social or religious groups.
In order for a foreigner to have legal control over a
property titled Hak Milik, they must have signed a
set of legally binding documents with the Indonesian
owner. Thee documents are commonly reffered to as a
“Nominee Agreement”.
Hak Pakai (Right to Use)
A Hak Pakai titled property may be held by foreign
individuals, Indonesian citizens, as well as foreign
embassies, international organizations and social or
religious organiza-tions.
A Hak Pakai title may be placed over either state owned
land or Hak Milik land. In the case of state owned
land, the initial rights of use are valid for 25 years and
may be extended for an additional 20. In the case of
Hak Milik land, the rights to use will be valid for 20
years, but may be renewed pending the consent of the
underlying owner. A Hak Pakai title can be considered a
primary land title and is registered with the federal land
bureau.
Hak Guna Bangunan (Right to Build)
A Hak Guna Bangunan (HGB) title may be held by
Indonesian or foreign owned companies. These rights
are given for an initial period of 30 years, may be
extended for another 20, and may be renewed.
All of the above titles may be sold, bequeathed or
transferred. In most cases a property may be converted
from one type of title to another. For example, if a
foreigner wishes to purchase a Hak Milik property, they
may apply to have the title converted to a Hak Pakai.
Later if the foreigner wishes to sell the Hak Pakai titled
property to an Indonesian citizen, the title may be
converted back to a Hak Milik.

25.
Other types of land titles in Indonesia include;
Hak Guna Usaha
Cultivation rights over state owned land. May be held by Indonesian inviduals, corporations, and foreign joint
venture corporations.
Hak Pengelolaan
Rights to manage state owned land, given only to state owned companies and government institutions. It is
possible for a HGB to be placed over a Hak Pengelolaan.
Hak Memungut Hasil Hutan
Right to crop forest products.
Hak Membuka Tanah
Right to clear land.
Some properties have no title registered with the land office, but nonetheless are subject to a traditional claim
within the village government. Properties have been claimed by a community or individual as their traditional
or ancestral lands are referred to as customary lands. A common form of customary land is designated as
“Sporadik”. These properties have been registered with the village head but not yet with the land bureau. Titles
may be applied for and given over these properties following due process and payment of the applicable fees.

26.
2. Foreign Property Ownership
in Indonesia
Foreign Individuals
Foreign individuals are legally allowed to possess a Hak
Pakai registered land title. Hak Pakai titles are utilized
by foreign individuals in order to possess a house or
villa in Indonesia.
A Hak Pakai may be held as the primary land title over
a property, in this case the land is technically owned
by the state, with the rights to its use granted to the
foreign individual. For instance, a Hak Milik property
that was sold to a foreigner could be converted to a
Hak Pakai title. In this case the foreign individual’s title
would be valid for an initial 25 year period with the
possibility for another 20 year extension. According to
Government Regulation Number 40 of 1996, the initial
period, an extension as well as a renewal period may
be guaranteed all at once following the payment of the
Uang Pemasukan, or up-front official costs.
A Hak Pakai may also be placed over a Hak Milik title,
in this case it is the Indonesian holder of the Hak Milik
who technically owns the land, while the foreigner
maintains the rights to its use. This is known as a Hak
Pakai Atas Hak Milik. The owner of this type of title may
wish to sign additional legal agreements with the owner
of the underlying Hak Milik title, granting the foreign
owner sole rights to sell or transfer the Hak Milik title as
well as the Hak Pakai. One advantage to retaining the
original Hak Milik title instead of transferring ownership
to the state would be that the property could be resold
to an Indonesian buyer without the need to create a
new title.
It is technically possible for a Hak Pakai to be
mortgaged, however it should be noted that at the time
of writing, Indonesian banks were not typically lending
money against Hak Pakai titles.
A foreign individual may only own one Hak Pakai title at
a time, and the size limit for a Hak Pakai is 5000 square
meters.
Foreign purchasers often leave their land with a Hak
Milik designation, and sign a series of papers granting
sole rights to sell, lease or otherwise alter the land
exclusively to the foreign partner. The Indonesian
partner, whose name is on the original title, is
generally paid a flat fee, a percent from future sale,
or a combination of both. The Indonesian partner
is referred to as the “nominee”. Transactions of this
type are generally less costly than the creation of a
new Hak Pakai title, but it should be noted that the
supporting documentation is not registered with the
land bureau. To ensure the rights of all partners, a
nominee agreement should be drawn up and reviewed
by reputable legal counsel.

27.
We believe in enabling emerging market property
investments that are safe, transparent
and accessible.
We extensively research the investment
prospects, local infrastructure, tourism potential
and other relevant information for every region
that we work in. We also aim to objectively
assess the status, merits and drawbacks of ever
property that we list. To ensure transparency, we
always recommend a qualified third-party firm for
due diligence and legal assistance.
To learn more about property investment
opportunities in Lombok, Sumbawa and Flores,
feel free to contact us via email:
info@southeastindonesiaproperty.com
Foreign Corporate Ownership
Partial or fully foreign owned companies registered
in Indonesia are given many of the same rights
as wholly Indonesian owned companies. Neither
Indonesian nor foreign companies are allowed to
own Hak Milik land titles, they are however allowed
to possess Hak Guna Bangunan (HGB) and Hak
Guna Usaha (HGU) land titles.
HGB titles allow a company to build on a property.
The use of the building must match the stated
purpose of the company. I.e., in order to build a
hotel, the possessing company would need to be a
hospitality provider.
A HGB is granted for an initial period of 30 years,
with a 20 year extension. According to Government
Regulation Number 40 of 1996, the initial period,
an extension as well as a renewal period may be
guaranteed all at once, following the payment of the
Uang Pemasukan, or up-front official costs. The total
period in this case would be 80 years.
If a foreign owned company wishes to purchase
land that is registered as Hak Milik, the original
Hak Milik title must be cancelled and a HGB title
must be created.

28.
www.southeastindonesiaproperty.com