Hak Guna Bangunan (HGB): Navigating Freehold Property Purchase through Company Ownership in Bali

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Indonesia, with its picturesque landscapes and burgeoning economic prospects, offers vast real estate opportunities. However, the intricate laws governing land ownership, especially for foreigners, necessitate a deeper dive into understanding specific rights. The ‘Hak Guna Bangunan’ (HGB), often termed as the Right to Build, is one such regulation that aids foreign investors. If you’re contemplating buying freehold property via company ownership in Bali, this HGB guide will serve as your compass.

 

Deciphering Hak Guna Bangunan (HGB)

HGB, translating to the “Right to Build,” is a title allowing the holder to establish and own buildings on state or private land for a specified period. While traditionally utilized by Indonesian companies, this provision offers a window for foreigners desiring to tap into the freehold property sector through company mechanisms.

 

Acquiring Freehold Property via HGB: A Step-by-Step Guide

 

1. Setting up a Foreign-Owned Company (PT PMA)

A prerequisite to accessing HGB for foreigners is the establishment of a foreign-owned company, commonly known as PT PMA. Ensure your business aligns with the allowed sectors for foreign investment.

2. Securing the HGB Title

Once the PT PMA is operational, it can apply for the HGB title. This title typically lasts for 30 years, renewable for an additional 20 years, and can be extended for another 30 years after that.

3. Procuring the Land

After acquiring the HGB title, the PT PMA can purchase land and own it for the duration of the title. Ensure that the land’s prior title is convertible to HGB.

4. Construction and Development

With the HGB title in place, the company can proceed with construction. Bear in mind the stipulated time frames within which development must begin, post land acquisition.

 

Key Considerations for HGB Freehold Acquisition

 

Recurring Renewals

Although HGB provides a lengthy ownership period, it’s essential to note its temporariness. Regular renewals, while possible, require strategic planning.

Ownership Transition

If a PT PMA wishes to sell the property before the HGB title expiration, the rights can be transferred to another entity that meets the criteria for holding an HGB title.

Legal Expertise is Paramount

Given the nuances associated with HGB and company ownership structures, leveraging insights from legal experts familiar with Indonesian real estate laws becomes indispensable.

 

Final Reflections

Bali’s allure is undeniable, making it a hotspot for global investors. While the pathway of HGB via company ownership presents a promising avenue for foreigners, understanding its intricacies is crucial. Armed with comprehensive knowledge and the right advisory team, navigating the realm of freehold property acquisition in Bali becomes an achievable dream. Let the mystique of Bali blend seamlessly with prudent investment strategies, opening doors to unparalleled opportunities.

Join The Discussion

One thought on “Hak Guna Bangunan (HGB): Navigating Freehold Property Purchase through Company Ownership in Bali”

  • vorbelutr ioperbir

    Great web site. Lots of useful info here. I’m sending it to a few friends ans also sharing in delicious. And of course, thanks for your sweat!

    Reply

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