Land ownership for Foreign Nationals

Foreign nationals (“WNA”) living in Indonesia have rights to land and buildings, but are
limited to the Right to Use and the Right to Lease for Buildings. This is regulated in Law
Number 5 of 1960 concerning Basic Agrarian Principles ("UUPA").

Article 41 of the UUPA describes the “Right to Use” as the right which grants authority to
utilise or collect products from land, either owned by the State or another individual. This
right can be granted for a specific period or as long as the land serves a particular purpose.

Article 44 of the UUPA describes the “Right to Lease for Buildings” as a person or legal
entity having the right to use land owned by another person for building purposes, by paying
the owner a certain amount of money as rent.

Articles 42 and 45 of the UUPA list the following as eligible for the right to use and the right
to lease for buildings respectively, namely:
a. Indonesian citizens,
b. Foreign citizens domiciled in Indonesia;
c. Legal entities established under Indonesian law and domiciled in Indonesia, and
d. Foreign legal entities having representatives in Indonesia.

The procedures and requirements for applying for a right to use of land is prescribed under
Article 114 of the Regulation of the Minister of Agrarian Affairs and Spatial
Planning/Head of the National Land Agency Number 18 of 2021 (“Regulation No.
18/2021”).

The regulation lists several required documents and procedures for the applicant to follow.
Specific documents which refer to WNA is the requirement of Immigration documents such
as visa, passport, or residence permit issued by the authorized agency according to the
provisions of immigration regulations.

The conditions for Extension and/or Renewal of Use Rights are specified under Article 125
of Regulation No. 18/2021.

Land Ownership for Foreign Corporations

Foreign investors under the UUPA, may utilise the following rights to land:
1. Right to Use,
2. Right to Lease for building;
3. Right to Build; and
4. Right to Cultivate.
However, to do so, investors must establish a Foreign Investment Limited Liability Company
(“PT PMA”).

PT PMAs similar to WNAs also enjoy the Right to Use and Right to Lease for Building.
Furthermore, PT PMA enjoy land rights which WNAs are not permitted to utilise, namely:
Article 35 of the UUPA describes the Right to Build as the right to construct and possess
buildings on land which is not their own for a maximum period of 30 years. The right to build
may be further extended for a maximum period of 20 years.

Article 28 of the UUPA describes the Right to Cultivate as the right to work on land
directly controlled by the state, for agricultural, fishery or animal husbandry companies. The
right to cultivate is granted for 25 years, with the maximum extendable period being 35
years.

Article 36 and Article 30 of the UUPA list the following as eligible for the right to build and
the right to cultivate for buildings respectively, namely:
a. Indonesian citizens;
b. Legal entities established under Indonesian law and domiciled in Indonesia.

Certification and Licencing for the Pharmaceutical and Medical Equipment Industry

Based on Article 2 of the Minister of Health Regulation No. 1799 of 2010 on the
Pharmaceutical Industry (“MoH No. 1799/2010”) as amended by Minister of Health
Regulation no. 3 of 2020 on Hospital Classification and Licensing, it is explained that the
establishment of a pharmaceutical industry must obtain a pharmaceutical industry permit.
It was then also explained that pharmaceutical industries that make drugs and/or medicinal
ingredients that are included in the narcotics category are required to obtain a special permit
to produce narcotics.

Requirements for obtaining a pharmaceutical industry licence:

1. Having a business entity in the form of a limited liability company;
2. Have investment plans and drug manufacturing activities;
3. Have a Taxpayer Identification Number (NPWP);
4. Have a permanent presence of at least 3 (three) Indonesian citizen pharmacists,
each of whom is responsible for ensuring quality, production and quality control; and
5. Commissioners and directors have never been involved, either directly or indirectly,
in violating laws and regulations in the pharmaceutical sector

Based on Article 6 of the MoH No. 1799/2010, it is explained that to obtain a

pharmaceutical industry permit, approval in principle (persetujuan prinsip) is required. If
approval in principle is carried out by the Foreign Investment and Domestic Investment
industries, the applicant must obtain an Investment Approval Letter from the agency that
carries out investment affairs in accordance with statutory regulations.

Based on the Law No. 7/2023 on Criteria and Procedures for Quasi Drug Registration,
the required permits include:
1. Distribution licence required for registration approval of quasi-medicines for
distribution in Indonesia;
2. Certificate of Good Medicine Manufacturing Practices (“CPOB”);
3. Certificate of Free Sale or Certificate of Pharmaceutical Product.