Guides · Legal · 10 min read
Understanding Property Ownership in Lombok: A Foreigner's Guide
Everything you need to know about property ownership structures in Lombok as a foreign buyer — from leasehold and Hak Pakai to HGB through a PT PMA, and what each option actually means for your investment.
If you've spent any time looking at property in Lombok, you've heard the words "leasehold", "Hak Pakai" and "HGB" thrown around, often without much explanation. The rules are different from what you're used to at home, and half the explanations online contradict each other.
The starting point is simple: foreigners cannot own freehold land in Indonesia. Full stop. Once you accept that, the rest makes sense. There are a few legal ways to control and use property here, and each has real trade-offs.
Leasehold (Hak Sewa)
This is the most common route for foreigners buying villas or land in Lombok. You rent the land from an Indonesian owner for a fixed period, typically 25 or 30 years, usually with an option to extend written into the contract.
The mechanics: a notaris draws up the lease agreement, the term and renewal conditions are spelled out, and you can build on the land during the lease. Many expats have held leaseholds here for years without trouble, and it is the cheapest way in.
The catch is that you own a contract, not land. When the lease ends, the land and anything standing on it goes back to the owner unless you have negotiated an extension. Think hard about the renewal clause: who sets the extension price, and what happens if the owner dies before the lease runs out? Your contract needs to answer both. Before you sign anything, run the plot through our free zoning check — a lease on land you can't build on is worth nothing.
Hak Pakai (right to use)
Hak Pakai is the one land title a foreigner can hold in their own name. Under PP 18/2021 it runs 30 years, extendable by 20, then renewable for another 30 — up to 80 years in total.
What you need, in practice: valid residency (BPN offices expect a KITAS or KITAP when you register), and the property has to be a home you use, not a business asset. There are also minimum property values for foreign buyers that differ by province, so ask a notaris what the current threshold is for NTB before you fall in love with a cheap plot.
Because Hak Pakai is a registered title at the land office rather than a private contract, it carries more legal weight than a lease. The trade-off is the residency condition and the personal-use restriction. If your plan is to rent the villa out by the night, Hak Pakai in your own name is the wrong vehicle — that's a licensed business, and the rules for it just changed. Our guide to the KBLI 2025 rental rules covers what changed and what it means for villa owners.
HGB through a PT PMA (foreign-owned company)
If you want to use property commercially — a rental villa, a small resort, a workshop — the proper structure is a PT PMA, a foreign-owned Indonesian limited company. The company can hold an HGB (Hak Guna Bangunan, a right-to-build title) with the same 30 + 20 + 30 year rhythm as Hak Pakai.
An HGB through a PT PMA gives you commercial use, a stronger legal position than any private contract, and separation from your personal visa status — the company holds the title, not you.
The numbers changed in late 2025, and most articles online still quote the old ones. Under BKPM Regulation 5/2025, the required minimum investment plan is still more than Rp 10 billion per business line per location, excluding land and buildings. But the minimum paid-up capital dropped from Rp 10 billion to Rp 2.5 billion. That is a 75% cut in the cash you must actually put into the company account, and it makes the PT PMA route realistic for a single boutique villa project, not just resorts. Budget for the ongoing side too: annual tax filings, investment reporting (LKPM), and accounting are all mandatory.
The nominee arrangement, and why you should not touch it
You will hear this one a lot. An Indonesian friend or partner buys the land in their name under freehold (Hak Milik), and a side agreement says you're the real owner.
This is not legal, and it is getting less safe every year. Indonesian law does not recognise nominee ownership of land. Whoever's name is on the certificate is the owner, whatever your side letter says. Bali went further in February 2026: Perda 4/2026 makes facilitating nominee arrangements a criminal matter there. That is the direction the whole country is moving. If the relationship sours, or the nominee has debts, your money is gone and no court will help you.
The options side by side
| Option | Max duration | Commercial use | In your name |
|---|---|---|---|
| Leasehold | 25–30 yrs + extension | Depends on contract | No (contract only) |
| Hak Pakai | Up to 80 years | No (residential only) | Yes |
| HGB via PT PMA | Up to 80 years | Yes | Company name |
| Nominee | — | — | No — illegal |
So which one should you choose?
It depends on what you're doing. A holiday villa for your own use: leasehold is the simplest, Hak Pakai the more secure option if you hold residency. A rental business: PT PMA with an HGB title, licensed under the right business classification. The strongest legal position for the long term: Hak Pakai or HGB, because both are registered titles rather than private contracts.
Whatever route you take, hire your own lawyer — one who works in Lombok or Bali property specifically, not the seller's notaris. The few weeks and few million rupiah that proper legal checks cost are nothing next to what people lose on bad structures. We've also written up the seven most expensive mistakes we see foreign buyers make here.
Common questions
Can a foreigner ever own freehold land in Indonesia?
No. Hak Milik (freehold) is reserved for Indonesian citizens. Any structure that claims to get you freehold as a foreigner is either a lease, a company title, or an illegal nominee arrangement dressed up.
How long can I actually control land for?
Up to 80 years on paper for both Hak Pakai and HGB: an initial 30-year grant, a 20-year extension, then a 30-year renewal. Leaseholds run whatever the contract says, most commonly 25 or 30 years plus a negotiated extension.
Do I need a company to rent out my villa?
If you're renting by the night to tourists, yes — that is a licensed accommodation business, held through a PT PMA with the correct KBLI business code, an NIB and building approvals. Since August 2026 unlicensed rentals are being removed from the booking platforms, so the informal route is closing. The details are in our KBLI 2025 guide.
Is a nominee ever safe if I really trust the person?
No. Trust doesn't change the law: the titled owner owns the land. Divorce, death, debt or a simple change of heart on their side, and you have nothing enforceable.
Before you commit to any plot: run it through the free zoning and land check, and if you're serious, order a due diligence check — certificate, zoning and access reviewed with notaris support. Our directory lists legal professionals in Lombok who work with foreign buyers.
Written by the Lombok Blueprint team in Lombok. Facts checked and updated 9 August 2026 — including the BKPM 5/2025 capital rules and the Perda Bali 4/2026 nominee provisions.