Right of Use and relation to Leasehold
Leasehold is a purchasing directly between purchaser and the land owner by the lease agreement validated by the Indonesian notary but it is not registered in land affairs. Right of Use (Hak Pakai) is a right obtained from releasing of a certain right on the government or Freehold (Hak Milik) land. Therefore Right of Use (Hak Pakai) can be registered in the land affairs then a certificate will be under the purchaser’s name.
How long does the application of Right of Use (Hak Pakai) over the land?
The government regulation states that the Right of Use (Hak Pakai) over government land may be applied for 25 years and can be extended. However, after the time period was over you should renew (not extend) it by the Indonesian notary.
What should you do if you want to secure the land by a company ?
The Land Code states any local company that established comply with the Indonesia law and/or foreign one that has representative in Indonesia region may own land and has a right to land in the form of Hak Guna Bangunan (Right To Build On A Land) over government land or Freehold (Hak Milik) land. Therefore, you need to set up a foreign direct investment company in Indonesia (Penanaman Modal Asing /PMA) first to obtain and secure the land.
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