JAKARTA – The Nusantara Capital Authority (OIKN) under the leadership of Acting Head Basuki Hadimuljono has taken a significant step to encourage investment in Indonesia’s new capital, Nusantara. Investors are set to benefit from long-term land rights, including Building Rights (HGB) and Cultivation Rights (HGU), which will now be available through a simplified and direct process. This change marks a departure from the traditional, multi-phase approval system.
The new provisions are codified in Presidential Regulation (PP) No. 29 of 2024, which covers Business Licensing, Ease of Doing Business, and Investment Facilities for Business Actors in the Nusantara Capital. Article 18 of this regulation has been amended, allowing investors to secure HGB for up to 80 years and HGU for up to 95 years, along with usage rights for up to 80 years, all without the need for staggered approvals.
“This regulation is designed specifically for IKN to make it more appealing for investors. The previous land tenure process was lengthy and cumbersome, but the new presidential regulation speeds things up considerably,” Basuki remarked during a session at the Ministry of Public Works and Public Housing (PUPR) on Tuesday, June 20, 2024.
In addition, Basuki explained that HGU, HGB, and Usage Rights can be granted in two cycles, potentially extending land tenure to 190 years for HGU, 160 years for HGB, and 160 years for Usage Rights. These provisions are exclusive to the IKN region, providing it with a competitive edge over other areas in Indonesia.
“In the previous system, HGB might be issued for 20 years initially, followed by extensions of 30 years and another 30 years. We’ve now consolidated this process into a single 80-year term,” he added.
The regulations are also supported by Presidential Regulation (Perpres) No. 75 of 2024, which focuses on accelerating the development of the Nusantara Capital. Article 9 of this regulation allows for the issuance of HGU for a maximum of 95 years in the first cycle, with a possible extension for another 95 years in the second cycle, contingent on meeting specific criteria and evaluations.
Similarly, HGB can be issued for an initial period of 80 years and renewed for an additional 80 years, resulting in a total possible tenure of 160 years. Usage rights are similarly structured, with a maximum of 80 years per cycle.
“The land rights for the first cycle, as outlined in paragraph 2, will be granted by the Ministry of Agrarian Affairs and Spatial Planning based on a request from the Nusantara Capital Authority,” according to Article 9, paragraph 3.
These regulatory changes highlight the Indonesian government’s commitment to ensuring that IKN becomes a prime destination for investment. By offering extended land rights and a more straightforward approval process, the government aims to attract significant interest from both domestic and international investors, paving the way for the swift and sustainable development of Indonesia’s new capital city.
