Indonesia’s property ownership laws are among the most misunderstood by foreigners. Unlike in many countries, land in Indonesia cannot be owned outright by foreign individuals. However, there are multiple legal frameworks that allow long-term control or usage of land, especially for those establishing a PT PMA. In Lombok, with its booming tourism and development sectors, understanding these distinctions is crucial.

1. Hak Pakai (Right to Use)

Hak Pakai allows foreigners to use state-owned or private land for residential purposes. It is often granted for 30 years and extendable up to 80 years in total. It can be held by foreign individuals who reside in Indonesia with a KITAS or Second Home Visa.

2. Hak Guna Bangunan (HGB – Right to Build)

HGB allows companies, including PT PMAs, to build and use a property for commercial purposes on state land. It is issued for 30 years and extendable. It’s the most common structure for business use, including hotels, villas for rent, and coworking spaces.

3. Leasehold

A leasehold is a contractual agreement with a local landowner, giving foreigners access to land without legal ownership. Leaseholds often last between 25–30 years and are renewable. However, without proper due diligence, leases can be challenged or revoked.

Recent Legal Shifts in 2024–2025

• The Agrarian Ministry is tightening rules around nominee structures where locals hold land on behalf of foreigners — a practice common in Bali and now spreading to Lombok.
• More local governments (including NTB province) are digitizing land registries, which improves transparency but exposes fraudulent or non-compliant agreements.

What Structure Should You Choose?

• Hak Pakai is ideal for residential use if you live in Indonesia long-term.
• HGB via PT PMA is the most robust and recommended method for commercial investors.
• Leasehold is suitable for short- to mid-term commitments, but must be legally registered and include clear exit clauses.

Using a nominee or informal lease agreement may seem easy upfront but can lead to legal challenges, eviction, or loss of investment. Always consult with a notary and real estate legal consultant familiar with Lombok’s local regulations and customary practices.

With increased government attention to land ownership irregularities, foreign investors need to be diligent. There are legal and secure ways to control land and property — but cutting corners often leads to complications.