Guide to Purchasing Land for Sale in Sumbawa
If you are considering acquiring land for sale in Sumbawa or investing in Sumbawa property, you are looking at one of Indonesia’s most promising emerging markets. While the legal landscape for foreign investment (Penanaman Modal Asing) differs from other jurisdictions, the process is well-regulated and secure when the correct legal structures are utilized.
Please find the updated legal pathways for acquiring property in Indonesia below.
1. Legal Titles for Foreigners: How to Secure Property
Under the Basic Agrarian Law (No. 5 of 1960), the highest title, Hak Milik (Freehold), is reserved for Indonesian citizens. Foreigners can legally control and enjoy property through the following recognized titles:
A. Hak Guna Bangunan (HGB) – Right to Build
This is the most common title used for foreign investment via a PT PMA.
Definition: The right to establish and own buildings on land.
Duration: Valid for an initial 30 years, renewable for 20 years, and extendable for another 30 years (Total 80 years).
Security: This is a registered title at the National Land Agency (BPN). It can be encumbered (mortgaged) and transferred to third parties.
B. Hak Pakai (HP) – Right to Use
This title is available to foreign individuals who hold a valid residency permit (KITAS or KITAP).
Usage: Typically used for residential purposes.
Security: Similar to HGB, it is a formal title registered in the foreigner’s name and can be extended for up to 80 years.
C. Hak Sewa – Leasehold
A private contractual agreement to use land or buildings for a specific period.
Structure: No corporate entity is required. The foreign individual enters a lease agreement with the Indonesian owner.
Note: The investor does not own the land title; they own the rights to the “leasehold interest” for the duration of the contract.
2. The PT PMA (Foreign Investment Company)
A PT PMA is a Limited Liability Company established under Indonesian law and is the most secure vehicle for holding land for sale in Sumbawa.
Is a Partnership Necessary?
No. Under the current Investment Map, many real estate and hospitality sectors allow for 100% foreign ownership. However, a PT PMA must have a minimum of two shareholders (which can be two foreign individuals or corporations). The structure must include:
At least one Director.
At least one Commissioner.
Nominee Agreements: A Legal Warning
In the past, “Nominee” arrangements (using a local’s name on a title) were common. However, these are strictly prohibited under Article 33 of Law No. 25 of 2007 on Investment. Such agreements are legally unenforceable and carry high risk, as the “beneficial owner” has no standing to claim the property in court. For anyone looking at land for sale in Sumbawa, a PT PMA or Leasehold is the legally valid route.
3. Steps to Establishing a PT PMA for Land Acquisition
To purchase Indonesia property through a PT PMA, the investor must follow the Online Single Submission (OSS) Risk-Based Approach:
Deed of Incorporation: Drafted by a Notary, outlining the company’s purpose and capital.
SK Kemenkumham: Approval from the Ministry of Law and Human Rights.
NIB (Business Identification Number): Obtained via the OSS system; this acts as your basic license.
Capital Requirements: As of 2026, a PT PMA typically requires a minimum paid-up capital of IDR 2.5 billion, with a total investment plan exceeding IDR 10 billion (excluding land and buildings).
Location Permit (KKPR): Ensuring the land is zoned correctly for your intended business (e.g., tourism, residential, or commercial).