Leasehold (or Hak Sewa)

This is a contractual agreement between the Hak Milik land owner and the foreigner which grants leasehold rights to the foreigner for the terms of the lease.

This structure offers reasonable security provided that the lease agreement is executed before an Indonesian Notary in Notarial Deed form in the Indonesian language.

The leasehold interest is an unregistered interest in the land so the foreigner’s leasehold rights do not appear on the Hak Milik certificate of title as an encumbrance. However, the unregistered leasehold interest will take priority over subsequent encumbrances on the Hak Milik title.

While the actual term of a lease is not regulated under Indonesian law, Notaries in Bali will generally grant leases to foreigners in terms of 25 years so that the lease term accords with the government decreed 25 year term of the Hak Pakai title available to a foreigner as a registered interest in Hak Milik land.       

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