Foreign-Owned Lands

THE government has never been serious about stopping land purchases in Indonesia by foreigners. Poor coordination between the National Land Agency (BPN), the Environment Ministry and the Capital Investment Coordinating Board (BKPM) has resulted in the impossible becoming possible: foreigners owning land on several islands in Indonesia.

Article 21 of Law No. 5/1960 on Basic Regulations on Agrarian Issues bans foreign citizens from owning land in Indonesia. Under Article 43 of the law, foreign individuals or legal entities can only obtain leaseholds, and this can only be over land of less than 5,000 square meters per person. Rights to greater areas of land can be obtained through a foreign capital investment company as long as it uses the land for investment. But in practice, for more than a decade, hundreds of regulations have been violated right under the noses of the authorities.