Step-by-Step Guide for Foreigners Investing and Buying Land in Lombok

Written By Shanae Tantram

Asking yourself, how do I buy land in Lombok Indonesia as a foreigner? Can I buy land in Lombok Indonesia as a foreigner? 

Navigating the investment process in Lombok Indonesia can feel overwhelming, but you don’t have to do it alone. We offer comprehensive support at every stage. Let’s jump into it: 

1. Define Your Investment Objective

Determine your focus:

  • Real Estate: Residential or rental properties for personal use or rental income.

  • Commercial Ventures: Tourism-based businesses like hotels, resorts, restaurants, or activity-based businesses (e.g., surf schools or tour operators).

Your choice will influence the type of ownership:

  • Leasehold Arrangement (Hak Sewa): Ideal for shorter-term or personal investments.

  • Establishing a PT PMA (Foreign-Owned Company): Required for large-scale or commercial investments.

2. Understand Legal Ownership Options

PT PMA (Foreign Owned Company): 

  • A foreign-owned company registered in Indonesia that allows foreigners to own land under the Hak Guna Bangunan (HGB) title.

  • HGB provides the right to use and develop land for commercial purposes for up to 30 years, with options for renewal.

  • Setting up a PT PMA involves registering with Indonesia’s Investment Coordinating Board (BKPM), meeting capital requirements, and adhering to annual reporting standards.

  • Minimum investment requirements often include up front capital which vary in price please see here for more details:
    Minimum Capital in Indonesia for a Foreign-Owned Company (PT PMA)

Leasehold (Hak Sewa):

  • Suitable for personal or rental properties.

  • Offers secure use of land or property for an agreed-upon term, typically extendable up to 80 years.

  • Often involves simpler processes compared to establishing a PT PMA, with lower initial investment costs.

3. Research and Choose a Location

Evaluate key hotspots based on your investment goals:

  • Kuta: Popular for its growing tourism sector, with many opportunities for accommodations and businesses.

  • Selong Belanak: Ideal for luxury or boutique developments, with serene beaches and high rental demand.

  • Senggigi: Established area with a mix of residential and commercial potential, supported by well-developed infrastructure.

4. Engage Legal Experts

Work with a qualified Indonesian notary (notaris) or legal adviser to:

  • Understand the legal framework for your investment.

  • Draft and review contracts to ensure compliance with Indonesian property laws.

Choose professionals with expertise in Lombok’s property regulations. If you need recommendations, let us know as we have trusted local partnerships available.

5. Conduct Due Diligence

  • Verify land or property ownership titles with the local land office (Badan Pertanahan Nasional or BPN).

  • Confirm zoning regulations and ensure the property aligns with your intended use (e.g., residential, commercial, or mixed-use).

  • Check for any disputes, encumbrances, or restrictions on the property.

  • Investigate future infrastructure projects (e.g., roads, airports, or utilities) that might impact property values positively or negatively.

6. Set Up the Legal Framework

Leasehold:

  • A detailed lease agreement is drafted covering terms, payment schedule, rights, and renewal conditions.

  • Have the agreement notarised to ensure legal enforceability.

PT PMA:

  • Register your foreign-owned company with the BKPM.

  • Obtain the company deed through a notary, and register it with the Ministry of Law and Human Rights.

  • Open a local bank account and deposit the required capital.

  • Apply for necessary business licences, including a Business Identification Number (NIB) and Location Permit.

7. Negotiate and Finalise Contracts

  • Conduct negotiations transparently with the seller or leaseholder.

  • Ensure all terms, including property descriptions, payment plans, and conditions, are clearly documented.

  • Notarise all agreements and register them with the relevant Indonesian land office for official recognition.

8. Obtain Necessary Permits

For Businesses:

  • Apply for operational permits such as a tourism business licence (TDUP) if applicable.

  • Register employees and adhere to tax reporting requirements.

For Properties:

  • Leasehold: Ensure the agreement is registered under your name or entity.

  • HGB: Register the title under your PT PMA, ensuring full compliance with local regulations.

9. Launch and Manage Your Investment

For Rental Properties:

  • List properties on platforms like Airbnb, Booking.com, or local property rental sites.

  • Work with experienced property managers to handle day-to-day operations and maximise returns.

For Business Ventures:

  • Partner with local stakeholders to navigate cultural and operational nuances.

  • Build community ties to ensure sustainable growth and goodwill.

For Personal Use:

  • Enjoy the serene beauty of Lombok and immerse yourself in its vibrant culture—SANTAI (relax).

By following these comprehensive steps, you can confidently navigate the complexities of investing in Lombok and leverage its vast potential for real estate and business opportunities. 

ABOUT LOT LINE

We are a locally owned business, we help Indonesian and international investors explore Lombok’s booming property market. With expertise across the island, we’re dedicated to finding your perfect piece of paradise – from stunning beaches and surf spots to lush green valleys.

We specialise in simplifying the process for international clients, handling everything from identifying opportunities to navigating legalities. Let us help make Lombok your dream investment or home away from home!

We offer comprehensive support at every stage.

Shanae Tantram