For Foreign Buyers & Investors
Foreign Land Ownership and Investment Rules Near Nusa Lembongan
Foreigners cannot hold freehold (Hak Milik) title to land in Indonesia. They can hold Hak Pakai (Right to Use) directly, or build through an Indonesian company, a PT PMA, using HGB (Right to Build) rights for up to about 80 years combined. Every claim below traces to its exact legal article, with a source link to check it yourself.
This page is written for foreign buyers, developers and investors evaluating a project on or near Nusa Lembongan, not for the site's regular travel readers, so it goes deeper into legal detail than the rest of the site. If you're planning a trip rather than a purchase, see Plan Your Trip and Island Facts instead. If you represent a development, investment or hospitality company and want to reach readers at this exact stage of their research, see Develop With Us.
Can Foreigners Own Land on Nusa Lembongan?
No. Indonesia's Basic Agrarian Law reserves Hak Milik, freehold title, for Indonesian citizens only, and any sale or transfer of freehold land to a foreign national is void by law, with the land reverting to the state (Source: UU No. 5/1960, Pasal 21(1) and Pasal 26(2)). Foreigners who want a legal footing on Nusa Lembongan use one of the right-to-use structures below instead.
This rule applies regardless of how a sale contract is worded. A nominee arrangement, where an Indonesian citizen holds the freehold certificate on a foreigner's behalf while the foreigner actually pays for and controls the land, does not create any legal right for the foreign party and carries its own well-documented risks if the nominee later disputes the arrangement. The structures below are the ones Indonesian law actually recognizes.
What Rights Can Foreigners Actually Hold: HGB, HGU and Hak Pakai
Indonesian law gives foreigners three real routes to hold rights over land and buildings, short of freehold. Hak Pakai (Right to Use) is available directly to a foreign individual with valid immigration documents. HGB (Right to Build) and HGU (Right to Cultivate) are both reserved for Indonesian citizens and Indonesian legal entities, which includes a foreign-owned PT PMA company (Source: PP No. 18/2021).
| Right | Who can hold it | Maximum term | Typical use |
|---|---|---|---|
| Hak Pakai (Right to Use) | Indonesian citizens, Indonesian legal entities, and foreign individuals with valid immigration documents (Pasal 49(2)(e)) | Up to 30+20+30 years, about 80 years, when granted with a fixed term (Pasal 52(1)) | Residential property held directly by a foreign individual |
| HGB, Hak Guna Bangunan (Right to Build) | Indonesian citizens and Indonesian legal entities, including a PT PMA (Pasal 34) | Up to 30+20+30 years, about 80 years (Pasal 37(1)) | Villas, hotels and commercial buildings held through a company |
| HGU, Hak Guna Usaha (Right to Cultivate) | Indonesian citizens and Indonesian legal entities, including a PT PMA (Pasal 19) | Up to 35+25+35 years, about 95 years (Pasal 22(1)) | Large-scale agriculture, plantation or aquaculture land |
A foreign individual holding Hak Pakai over housing must hold a valid immigration document, such as a KITAS or KITAP residence permit, at the time of acquisition (Source: PP No. 18/2021, Pasal 69(1)). The same regulation sets a minimum price, a minimum and maximum land area, and a cap on how many properties a foreign individual can hold this way, with the exact thresholds set separately by Indonesia's Ministry of Agrarian Affairs and Spatial Planning (Source: PP No. 18/2021, Pasal 72).
Some land on and around Lembongan sits under Hak Pengelolaan (HPL), a management right typically held by a state agency or state-owned company rather than a private party. Extending or renewing an HGB built on HPL land needs the written consent of the HPL holder, not just the party named on the building-right certificate (Source: PP No. 18/2021, Pasal 40(2)). Anyone evaluating a project on leasehold or HGB land should confirm during due diligence whether the underlying land is HPL, since that adds a party whose consent the project depends on later.
How Does a Foreigner Set Up a PT PMA to Invest?
A PT PMA is an Indonesian limited liability company with foreign shareholding, the standard vehicle for a foreigner to hold HGB or HGU rights and to run a business such as villa rental or hospitality on Nusa Lembongan. Indonesia's Investment Law defines it, and a separate presidential regulation sets its minimum investment size and legal form (Source: UU No. 25/2007; Perpres No. 10/2021).
Under Perpres No. 10/2021, a foreign investment company must plan a total investment of more than IDR 10 billion per five-digit KBLI business classification code, per project location, excluding the value of land and buildings (Pasal 7(1)), and must be established as a PT under Indonesian law with its registered seat inside Indonesia (Pasal 7(2)).
Business licensing for a PT PMA runs through OSS-RBA, the Online Single Submission Risk-Based Approach, Indonesia's single digital system for business permits. Government Regulation No. 28/2025 replaced the earlier PP No. 5/2021 as the main rule governing this risk-based licensing process, effective 5 June 2025. A further ministerial regulation, Peraturan Menteri Investasi dan Hilirisasi/Kepala BKPM No. 5/2025, sets out the detailed OSS-RBA procedure; it was established 1 October 2025 and took effect 2 October 2025 (Source: PP No. 28/2025; Peraturan Menteri Investasi dan Hilirisasi/Kepala BKPM No. 5/2025).
The government's own Investment Guidebook, published by Kementerian Investasi/BKPM, explains how KBLI codes classify business activity for licensing and risk purposes, lists sectors closed or capped for foreign ownership, and covers import rules for a PT PMA bringing in equipment or goods (Source: Kementerian Investasi/BKPM, Indonesia Investment Guidebook). Its most recent full published edition predates the 2025 regulatory changes above, so treat it as a map of how the system works rather than the final word on current numeric thresholds; confirm those through OSS-RBA directly.
Commercial disputes involving a PT PMA, for example between foreign and Indonesian shareholders or with a construction contractor, are commonly resolved through arbitration rather than Indonesia's general courts, under the country's Arbitration and Alternative Dispute Resolution Law (Source: UU No. 30/1999). Many PT PMA joint-venture and construction agreements name arbitration, often through BANI (Badan Arbitrase Nasional Indonesia) or an international arbitration body, as the dispute-resolution route. Whether that applies to a given deal depends entirely on what that specific contract says, not on the law by itself.
What Taxes Apply to Property and Company Transactions?
Property and company transactions in Indonesia carry several separate taxes, from a transfer tax split between seller and buyer to corporate income tax on a PT PMA's profits. Rates run from 2.5 percent on a property rights transfer to 22 percent corporate income tax, each fixed by its own regulation (Source: Direktorat Jenderal Pajak, pajak.go.id, 2026).
| Tax | Rate | Legal basis |
|---|---|---|
| Final income tax (PPh) on rental of land or buildings | 10% of gross rental income | PP No. 34/2017 |
| Income tax (PPh) on transfer of land or building rights | 2.5% of the gross transfer value, or the government-assessed value if that is higher | PP No. 34/2016 |
| Land and building acquisition duty (BPHTB) | Up to 5%, set by regional regulation within that ceiling | UU No. 1/2022 (UU HKPD), Pasal 47(1) |
| Corporate income tax (CIT) | 22% on taxable profit, for tax years from 2022 onward | UU No. 7/2021 (UU HPP) |
| Value-added tax (PPN) | 12% statutory rate; 11% effective rate on non-luxury goods and services through a tax-base adjustment | PMK No. 131/2024, effective 1 January 2025 |
The 12 percent VAT rate that took effect on 1 January 2025 is not simply an 11 percent rate under a new name. For goods and services other than designated luxury items, the tax office applies the 12 percent rate to a reduced tax base equal to 11/12 of the transaction value, which works out to an effective 11 percent charge; luxury goods above the government's threshold are taxed at the full 12 percent on the full value, with no such adjustment (Source: Direktorat Jenderal Pajak, pajak.go.id, explaining PMK No. 131/2024).
The 22 percent corporate rate applies in full once a company's annual revenue passes IDR 50 billion. Smaller companies get a partial discount under Pasal 31E of the same tax law, and Indonesia runs a separate, lower flat-rate regime for small businesses below that threshold (Source: UU No. 7/2021). A PT PMA's actual tax bill depends on its size and structure, not just the headline 22 percent figure.
Do I Still Need a Tourist Visa If I'm Here to Invest?
Yes. Anyone flying in to view a project or sign paperwork in person still needs an ordinary tourist visa and Bali's tourist levy, exactly like any other visitor; that entry process is separate from, and doesn't substitute for, the investment and land-rights structures described above. See Do You Need a Visa? on Island Facts and The Bali Tourist Levy and Arrival Card on Plan Your Trip for the current fees and process.
Where Can I Verify This Myself?
Every figure on this page changes at the discretion of the Indonesian government, sometimes with little public notice, so verify current status directly before acting on any of it. These are the official portals behind the claims above:
- peraturan.go.id, jdih.bkpm.go.id and jdih.bumn.go.id, Indonesia's national and institutional legal databases (JDIH), for the current text of any law, government regulation or presidential regulation named on this page.
- pajak.go.id, Direktorat Jenderal Pajak (DJP), Indonesia's tax authority, for current tax rates and regulations.
- oss.go.id, OSS-RBA, the licensing system a PT PMA registers and operates through.
- bkpm.go.id, Kementerian Investasi/BKPM, for the Investment Guidebook and current sector and KBLI rules.
- atrbpn.go.id, Kementerian ATR/BPN (Agrarian Affairs and Spatial Planning/National Land Agency), for land certificate and title questions specific to a parcel.
Sources
Every claim on this page is checked against the sources below at the time of writing. Accessed 22 September 2026.
Primary and legal sources
Additional legal and industry sources
Where Next
See Develop With Us for how a real estate, investment or hospitality company can reach readers already researching this island, Island Facts for the fully sourced practicalities of visiting Nusa Lembongan, or Contact for general questions.
Disclaimer
This page is general information about Indonesian land and investment law as it stood on the date below. It is not legal, tax or investment advice, and it does not cover every exception, regional variation or recent amendment. Anyone considering a land, property or business transaction on Nusa Lembongan or elsewhere in Indonesia should get independent advice from a licensed Indonesian notary/PPAT, a lawyer and a tax advisor before signing anything or transferring money. Laws, regulations and tax rates referenced here change; verify current status with the relevant authority listed above before acting.