PT PMA or Hak Pakai: which structure should you choose to invest in Lombok?

A foreigner cannot own land freehold in Indonesia. They can, however, invest legally through three routes: a PT PMA company, a Hak Pakai right of use or a Hak Sewa lease. The right choice comes down to one simple question: do you want to rent the property out, or live in it?

What Indonesian law allows foreigners to do

Freehold ownership (Hak Milik) is reserved for Indonesian citizens. The 1960 Basic Agrarian Law and Government Regulation PP 18/2021 give foreigners access to other registered, enforceable rights: Hak Pakai (right of use), Hak Sewa (lease) and, through an Indonesian company, Hak Guna Bangunan (right to build).

Be wary of any offer to use an Indonesian “nominee” who would hold the land on your behalf. We cover this in our article on buying land safely.

PT PMA: the structure for rental income

A PT PMA is an Indonesian company with foreign shareholders. The company holds the land under an HGB title and can run the villa commercially, for example as a holiday rental.

• HGB title term: up to 30 years, extendable by 20 years, then renewable for 30 years on state land (Article 37 of PP 18/2021).
• Capital: since BKPM Regulation 5/2025 of October 2025, the minimum paid-up capital is IDR 2.5 billion per business activity, down from IDR 10 billion. Total investment must still reach IDR 10 billion per business activity.
• Good to know: for tourist accommodation, the land and the building count towards that investment amount.
• Obligations: bookkeeping, tax filings and quarterly investment reports (LKPM). Budget for these annual running costs.

Hak Pakai: the structure for a personal home

Hak Pakai is a right of use registered in your own name, for a house you live in. It suits a holiday home, not a rental project.

• Conditions: you must hold a valid immigration document (visa, passport or residence permit) within the meaning of PP 18/2021.
• Minimum price: a detached house must be worth at least IDR 3 billion in West Nusa Tenggara, Lombok’s province, against IDR 5 billion in Bali (Ministerial Decree 1241/2022).
• Limits: one plot per person or family, of no more than 2,000 m².
• Term: up to 30 years, extendable by 20 years, then renewable for 30 years on state land (Article 52 of PP 18/2021).
• Inheritance: the property can pass to your heirs; if they are foreigners, they must also hold a valid immigration document.

What about Hak Sewa?

Hak Sewa is a lease on land owned by an Indonesian, signed and registered before a notary. Its term is set by contract, often 25 to 30 years with an extension option. It is the simplest and cheapest way in, but you only hold a time-limited right.

At a glance

How to choose

Ask yourself three questions. Will you rent the property out? If so, a PT PMA is the legal route for commercial use. Will you live there part of the year without renting it? Hak Pakai is made for you. Do you want to limit your initial outlay over a fixed horizon? Look at Hak Sewa.

In every case, we check the land title with the National Land Agency (BPN) and have the deeds signed before a licensed land notary (PPAT). We can also set up your PT PMA. To find out which structure fits your project, speak to an advisor on WhatsApp.

The rules quoted are those in force at the date of publication and may change. This article is not a substitute for personalised legal advice.

Sources

• Withers — Indonesia eases foreign capital rules: BKPM Regulation No. 5 of 2025
• Hukumonline — Hak atas tanah dan bangunan bagi orang asing di Indonesia
• Hukumonline — WNA bisa beli rumah hunian dengan harga minimal berikut ini
• Hukumonline — Perbedaan Hak Guna Bangunan dan Hak Pakai