Right of Use

Right of Use (Hak Pakai) means the right of use over land, either state-owned or private, which gives the holder the right to use and obtain a parcel of land.

Law PP 40/1997 tates that the initial period for right of use is not to exceed 25 years but can be extended for another 20 to 25 years or even indefinitely if the land is still in use for a certain reason/purpose (i.e. use of buildings).

Right of Use may be owned by resident foreigners, and/or foreign companies that have a representative office in Indonesia.

The Foreigners names are documented on the actual land certificate. This option would mean that you eliminate participation of an Indonesian nominee. The land is documented in your own name.

The renewal costs are calculated at 2% of the taxable value of the land, this can be confirmed upon review of the NGOP document.

The land must hold a building permit, foreigners can only have one parcel of land registered under the Hak Pakai status, and foreigners are officially required to have a KITAS (residential visa) although Hak Pakai for foreigners in the past have been processed who do not hold a KITAS visa.

Must contribute to the national development, i.e. have economic interests in Indonesia through investments

Can convert back to a Hak Milik and sell as freehold at the current market price.