If you’re exploring property investment in Indonesia, especially in Lombok, you’ve probably come across terms like Hak Pakai, Hak Sewa, and PMA. These legal structures define how foreigners can safely and legally invest in land and property in Indonesia.

Since foreigners cannot directly own Hak Milik (freehold land), understanding these options is essential before making any purchase. Choosing the right structure can protect your investment, ensure compliance with Indonesian law, and maximize your returns.

In this article, we’ll break down each option, compare their benefits and limitations, and help you decide which one is best for your investment goals in Lombok.

What is Hak Pakai (Right to Use)?

Hak Pakai gives the holder the right to use land owned by the state or private individuals for a specific purpose.

• Duration: Usually granted for 25 years and extendable up to 70 years in total.
• Eligibility: Can be held by foreigners who legally reside in Indonesia or own property through a local agreement.
• Usage: Commonly used for residential purposes, such as owning a house or villa.

Pros:

• Legal and relatively straightforward for foreigners.
• Long-term security with possible extensions.

Cons:

• Limited mainly to personal residential use.
• Cannot always be used for large-scale commercial projects.

What is Hak Sewa (Right to Lease)?

Hak Sewa is a rental agreement between a landowner and a tenant (including foreigners).

• Duration: Can vary widely—often between 25–50 years, depending on the contract.
• Eligibility: Available to anyone, including foreigners, with no residency requirement.
• Usage: Flexible—can be used for residential or commercial purposes.

Pros:

• Simple and flexible structure.
• Can be negotiated directly with landowners.

Cons:

• You don’t own the property—just the lease rights.
• Renewal is subject to negotiation with the landowner.

What is PMA (Foreign-Owned Company)?

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign-owned company registered in Indonesia. It is the most powerful structure for foreign investors.

• Eligibility: 100% foreign shareholders or a mix of foreign and local.
• Usage: Can hold Hak Guna Bangunan (HGB – Right to Build), allowing construction of villas, resorts, or commercial projects.
• Duration: HGB under a PMA is typically valid for 30 years, extendable for 20 years, with further renewals possible.

Pros:

• The safest and most flexible option for serious investors.
• Allows full business operations (villa rentals, resorts, commercial developments).
• Recognized under Indonesian law as a legal entity.

Cons:

• Requires more setup costs, paperwork, and ongoing compliance.
• Better suited for medium-to-large investments, not just small holiday homes.

Which One Should You Choose?

• If you’re planning to own a residential villa for personal use, Hak Pakai is the most practical option.
• If you prefer a short-term or flexible investment, Hak Sewa works well.
• If you want to develop property, run a business, or invest at scale, setting up a PMA company is the best and safest route.

Final Thoughts

Investing in Lombok property can be rewarding, but the legal structure you choose matters as much as the land itself. Hak Pakai, Hak Sewa, and PMA each come with their own rules, benefits, and limitations. The right choice depends on your goals, whether you’re buying a retirement villa, leasing land short-term, or building a luxury resort.

At Lombok Expert, we help foreign investors navigate these complexities with full transparency and local expertise. From land sourcing to legal setup, we ensure your investment is secure and profitable.

Contact Lombok Expert today to discuss your investment plans and find the best ownership solution for your property in Lombok.