The Government Regulation of the Republic of Indonesia No. 18 of 2021 (GR No. 18/2021) in its Article 67 paragraph (1) regulates that, among others, (i) Foreigners [1] who hold permits in accordance with the statutory laws and regulations; and  (ii) the representatives of foreign countries (perwakilan negara asing) in Indonesia, may be granted with the Ownership Titles to Apartment Units (Hak Milik atas Satuan Rumah Susun).

However, neither the GR No. 18/2021 nor the Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency of the Republic of Indonesia No. 18 of 2021 concerning Procedures for Determining Management Rights and Land Titles (ATR Minister/BPN Head Regulation No. 18/2021) regulates further pertaining to the ownership of Apartment Units (Satuan Rumah Susun) by the representatives of foreign countries in Indonesia, unlike the regulations with regard to the ownership of Apartment Units by Foreigners.

With regard to the ownership of Apartment Units by Foreigners:

1. Both the GR No. 18/2021 and the ATR Minister/BPN Head Regulation No. 18/2021 regulate that Apartment Units which can be owned by Foreigners are Apartment Units that are in and form parts of the apartment buildings which are constructed on a parcel of land with:
   • the Right of Use (Hak Pakai) or the Right of Building (Hak Guna Bangunan)over a State Land;
   • the Right of Use or the Right of Building over a land with the Right of Management (Hak Pengelolaan); or
   • the Right of Use or the Right of Building over a land with the Right of Ownership (Hak Milik);
     
2. In addition, the GR No. 18/2021 also regulates limitations relating to the ownership of Apartment Units by Foreigners, namely among others:
   • minimum price;
   • number of Apartment Units;
   • their purposes are for residentials.

Meanwhile, on the other hand, neither the GR No. 18/2021 nor the ATR Minister/BPN Head Regulation No. 18/2021 contains provisions concerning the ownership of Apartment Units by the representatives of foreign countries for matters that are stated in such regulations for the ownership of Apartment Units by Foreigners as outlined in the preceding paragraph above.  If so, how is then the implementation of the ownership of Apartment Units by the representatives of foreign countries in Indonesia, as permitted by Article 67 paragraph (1) of the GR No. 18/2021?

In relation to the aforementioned matter, there is a ruling that has has been obtained, which is issued by the Indonesian Ministry of Agrarian Affairs and Spatial Planning/National Land Agency, Directorate General of Land Rights Determination and Registration, which states that the granting of the Ownership Titles to Apartment Units (Hak Milik atas Satuan Rumah Susun)to the representatives of foreign countries is guided by the provisions of Article 67 of the GR No. 18/2021 and Article 188 of the ATR Minister/BPN Head Regulation No. 18/2021.  This means that the provisions of Article 188 of the ATR Minister/BPN Head Regulation No. 18/2021 also apply to the ownership of Apartment Units by the representatives of foreign countries in Indonesia, by which it is also confirmed that the representatives of foreign countries in Indonesia may own Ownership Titles to Apartment Units (Hak Milik atas Satuan Rumah Susun)for Apartment Units which are constructed on lands with the Right of Building (Hak Guna Bangunan), other than those built on lands with the Right of Use (Hak Pakai) (as it may have been known, apartments in Indonesia, particularly in the DKI Jakarta Province, are mostly built on lands with the Right of Building (Hak Guna Bangunan)).

Article 188 of the ATR Minister/BPN Head Regulation No. 18/2021 reads as follows:

1. Over an Apartment Unit owned by a Foreigner which is built on a land with the Right of Use (Hak Pakai)or the Right of Building (Hak Guna Bangunan)shall the Ownership Title to Apartment Unit (Hak Milik atas Satuan Rumah Susun)be granted;
2. If the Apartment Unit that is owned by a Foreigner is built on a land with the Right of Building (Hak Guna Bangunan), the joint right in respect of the ownership of the Apartment Unit shall be calculated based on the Proportional Comparison Value (Nilai Perbandingan Proporsional) over the common parts (bagian bersama), common objects (benda bersama), and not including over the common land (tanah bersama);
3. The obligations with respect to the common land related to the ownership of an Apartment Unit shall remain attached to the Foreigner as the holder of the Ownership Title to Apartment Unit.

After it has been confirmed that the Apartment Units which can be owned by the representatives of foreign countries in Indonesia are Apartment Units built not only on lands with the Right of Use (Hak Pakai), but also on lands with the Right of Building (Hak Guna Bangunan), the concern which then arises regarding the ownership by the representatives of foreign countries of Apartment Units built on lands with the Right of Building (Hak Guna Bangunan) is the matter of the right over the common land, whereby pursuant to Article 188 paragraph (2) of the ATR Minister/BPN Head Regulation No. 18/2021, the calculation of the Proportional Comparison Value (Nilai Perbandingan Proporsional)of an Apartment Unit which is owned by a Foreigner (which also applies to the representative of a foreign country) and built on a land with the Right of Building (Hak Guna Bangunan)is on the joint right over the common parts (bagian bersama) and common objects (benda bersama), and not including on the right over the common land (tanah bersama) [2].

In practice, there have been transactions of sale and purchase of the Ownership Titles to Apartment Units (Hak Milik atas Satuan Rumah Susun)which have been completed for Apartment Units that are built on a land with the Right of Building (Hak Guna Bangunan)whereby the purchaser is the representative of a foreign country in Indonesia, and from such sale and purchase transactions, Certificates of Ownership Titles to Apartment Units (Sertipikat Hak Milik atas Satuan Rumah Susun)have been issued in the name of the relevant representative of foreign country by the local land office.

To address and in relation to the concern regarding the right over the common land for an Apartment Unit which is owned by the representative of a foreign country and built on a land with the Right of Building (Hak Guna Bangunan), whereby, according to the regulations, the Proportional Comparison Value (Nilai Perbandingan Proporsional)of such Apartment Unit is not counted towards the right over the common land (tanah bersama), it is recommended that an agreement in writing be made in which the Association of Owners and Occupants of Apartment Units (Perhimpunan Pemilik dan Penghuni Satuan Rumah Susun – PPPSRS) as well as the building management are also parties to the agreement, which agreement, in principle,  (i) contains a guarantee that the relevant representative of foreign country has the rights to access common facilities, and to conduct activities in the common areas (including the common land); and  (ii) stipulates that if in the future the representative of foreign country sells its Ownership Title to Apartment Unit (Hak Milik atas Satuan Rumah Susun), the proportional right over the common land (tanah bersama), namely with the portion which is the same as or equivalent to the Proportional Comparison Value (Nilai Perbandingan Proporsional)of the relevant Apartment Unit, will constitute and be included in the object of the sale.

---

[1] A “Foreigner” is a person who is not an Indonesian citizen whose presence provides benefits, conducts business, works, or invests in Indonesia (GR No. 18/2021).

[2] According to Indonesian laws and regulations, the Right of Building (Hak Guna Bangunan)can only be owned by an Indonesian citizen or a legal entity established under Indonesian laws and domiciled in Indonesia, while a Foreigner or a foreign representative in Indonesia is not included among the parties who can own the Right of Building.