Freehold, Leasehold & HGB

When acquiring land in Sumba, the purchase structure you choose determines your rights, control, duration and flexibility. Best Island Projects offers guidance on several proven structures, each suited to different buyer profiles and goals. We help you compare the options and connect you with the right legal and notary partners to implement the structure correctly.

Not every structure suits every buyer. The right choice depends on your nationality, investment timeline, intended use, development plan and risk profile. Our role is to present the options clearly, explain the practical differences and support you in making an informed decision.

Freehold — known in Indonesia as Hak Milik — represents the strongest form of land ownership. It grants full, indefinite ownership rights to the holder. For Indonesian citizens, this is the most direct and secure form of title.

Foreign buyers face specific legal restrictions around direct freehold ownership. In practice, foreign investors often explore alternative structures that provide long-term security while respecting Indonesian law. Best Island Projects can explain how freehold interacts with foreign investment rules and what alternative paths may offer comparable long-term confidence.

Leasehold — Hak Sewa — gives the holder the right to use and develop land for a defined period under a contractual agreement with the landowner. This is one of the most accessible structures for international buyers and is widely used for residential, hospitality and development projects across Indonesia.

Lease terms are negotiable and can often be extended or renewed. A well-structured leasehold agreement can provide decades of secure use, development rights and transferability. Best Island Projects helps buyers review lease terms, duration, renewal conditions, payment structures and development rights before committing.

HGB is a right-to-build title that allows the holder to construct and own buildings on land held by another party — typically the state or a landowner. It is commonly used for development projects and can be held by Indonesian entities, including those with foreign investment participation through a PT PMA structure.

HGB has a defined duration but is typically renewable. It offers a structured, legally recognised path for foreign-linked development in Indonesia. Best Island Projects can explain how HGB fits into a broader development strategy and what steps are required to establish and maintain the title.

Choosing between freehold, leasehold and HGB is not a one-size-fits-all decision. It requires understanding your goals, the specific land opportunity, the legal framework and the practical steps involved in each structure.

Best Island Projects advises buyers through this decision by explaining the practical implications of each structure, coordinating with trusted local notaries and legal professionals, and ensuring the chosen path aligns with the buyer’s long-term strategy. We do not provide formal legal advice — that remains the role of qualified legal professionals — but we make sure buyers enter those conversations well-prepared and with clear priorities.

Our guidance on purchase structures includes:

• •Explaining the practical differences between freehold, leasehold and HGB
• •Reviewing which structures fit your nationality and investment goals
• •Coordinating with trusted Sumba-based notaries and legal professionals
• •Reviewing documentation, duration, renewal terms and transfer rights
• •Ensuring the structure supports your development or investment timeline
• •Preparing you for informed legal consultations