JAKARTA – In a strategic move to attract more investment to the Nusantara Capital City (IKN), the Acting Head of the Nusantara Capital Authority (OIKN), Basuki Hadimuljono, announced that investors will now be granted extended land rights, including Building Rights (HGB) and Cultivation Rights (HGU), directly and without the traditional phased approach. This initiative is part of the government’s broader efforts to simplify the investment process and make IKN a more appealing destination for both domestic and international investors.
This change is rooted in Presidential Regulation (PP) No. 29 of 2024, which focuses on Business Licensing, Ease of Doing Business, and Investment Facilities in IKN. One of the key amendments in this regulation is in Article 18, which allows investors to obtain HGB for up to 80 years and HGU for up to 95 years, as well as usage rights for up to 80 years, all without the previously required step-by-step approval process.
Basuki emphasized that this new regulation is specifically designed to enhance the attractiveness of IKN for investors by speeding up the process of acquiring land rights. “Previously, under the older land tenure system, the process was much slower and more complex. With this new presidential regulation, we can expedite the process significantly,” he explained during a press conference at the Ministry of Public Works and Public Housing (PUPR) on Tuesday, June 20, 2024.
In addition to the direct grant of these rights, the regulation allows for land rights to be issued in two cycles, potentially extending HGU to a total of 190 years, HGB to 160 years, and usage rights to 160 years as well. Basuki noted that these provisions are unique to the IKN area, offering investors a level of security and long-term stability that is not available in other regions of Indonesia.
“In the past, investors might receive HGB in increments—initially for 20 years, followed by two extensions of 30 years each. Now, we are offering the full 80 years upfront,” Basuki stated.
Further support for these incentives comes from Presidential Regulation (Perpres) No. 75 of 2024, which addresses the Acceleration of Development in the Nusantara Capital. Article 9 of this regulation stipulates that HGU can be granted for up to 95 years in the first cycle, with the possibility of a 95-year extension in the second cycle, provided certain criteria and evaluations are met.
The same article also details that HGB can be granted for an initial 80-year period, with an additional 80-year extension available, bringing the total to 160 years. The regulation similarly structures usage rights, allowing for up to 80 years per cycle.
According to Article 9, paragraph 3, the first cycle of land rights will be granted by the Ministry of Agrarian Affairs and Spatial Planning upon a request from the Nusantara Capital Authority. These regulatory adjustments underscore the government’s commitment to making IKN a premier investment hub by offering long-term land security and a streamlined process for acquiring land rights, which are expected to play a crucial role in attracting significant investment to the new capital.
