Hak Guna Bangunan

Corporate ownership (Hak Guna Bangunan)

A foreign investment limited liability company in which the foreigner owns or controls 100% of the shares is commonly known as a PMA company. These companies are permitted to hold a certificate of title known as Hak Guna Bangunan (HGB) meaning the right to own and use buildings on the land.

The initial term of the HGB is 30 years and the terms of extensions and renewals are dependent on whether the HGB is established over Hak Milik land or over State land.

The PMA company has ongoing taxation and reporting requirements to Indonesian government authorities and must engage in a single purpose business. As a result of the PMA company’s corporate and tax compliance obligations, it may be viewed as not being the most appropriate vehicle to hold a single, relatively small villa investment.

 

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