balipropertyguideUUPA (Law 5/1960) in English: the articles a foreign buyer meets
Indonesia’s land law is a 1960 statute, still in force. About twenty of its articles decide what a foreigner can hold in Bali. Here they are in order, with what each one decides.
The Basic Agrarian Law, in the order the articles run
Law 5/1960 is short, old and still the foundation. Nearly every rule on this site about what a foreigner can hold traces back to about twenty of its articles. Here they are in the law’s own order, each with what it decides and the page on this site that uses it.
| Article | What it decides | Used on |
|---|---|---|
| UUPA art. 9(1) | The founding principle. Full relationship with land is for citizens: only Indonesian citizens may have the full relationship with the earth, water and air space. | — |
| UUPA art. 16(1) | The rights the law recognizes: hak milik, hak guna usaha, hak guna bangunan, hak pakai, hak sewa, the right to clear land and the right to collect forest produce, plus rights set by later law. | the 14 terms |
| UUPA art. 19(1) | The State runs land registration across Indonesia, to secure legal certainty. | checking a certificate |
| UUPA art. 20(1) | Hak milik is the hereditary, strongest and fullest right a person can hold over land. | certificates |
| UUPA art. 21(1) | Who may hold hak milik: Indonesian citizens only. | what you can own |
| UUPA art. 21(3) | A foreigner who acquires hak milik by inheritance or marriage must give it up within one year. | married to an Indonesian |
| UUPA art. 26(2) | Any transfer meant to give a foreigner hak milik directly or indirectly is void by operation of law. | nominee risks |
| UUPA art. 27 | Hak milik ends when the land falls to the State by revocation, surrender, abandonment, or under arts. 21(3) and 26(2). | — |
| UUPA art. 35(1) | HGB is the right to erect and own buildings on land that is not one's own. | HGB explained |
| UUPA art. 36(1) | Who may hold HGB: Indonesian citizens and legal entities established and domiciled in Indonesia. | PT PMA |
| UUPA art. 41(1) | Hak pakai is the right to use or take the produce of State land or another's land, on terms set by the grant or by agreement with the owner — not a lease. | hak pakai explained |
| UUPA art. 42 | Who may hold hak pakai: citizens, foreigners domiciled in Indonesia, Indonesian legal entities, and foreign legal entities with a representative office. | hak pakai explained |
| UUPA art. 43(1) | Hak pakai over State land may be transferred only with the permission of the competent official. | the transfer permit |
| UUPA art. 43(2) | Hak pakai over someone’s hak milik may be transferred only if the agreement with the owner allows it. | the land underneath |
| UUPA art. 44(1) | Hak sewa is the use of another's land for the purposes of a building. | leasehold explained |
| UUPA art. 44(2) | Rent may be paid once or at set intervals, and before or after the land is used. | leasehold explained |
| UUPA art. 44(3) | A land lease may not carry conditions that contain elements of extortion. | leasehold explained |
| UUPA art. 45 | Who may hold hak sewa: four classes of holder. | leasehold explained |
| UUPA elucidation to arts. 44 and 45 | In the elucidation: the State cannot lease out land, because the State is not its owner. | leasehold explained |
How the law is built
The UUPA sets principles and then a catalogue. The principle a foreign buyer meets first is article 9(1): only Indonesian citizens may have the full relationship with the earth, water and air space. Everything after follows from it. Article 16(1) then lists the rights — hak milik, hak guna usaha, hak guna bangunan, hak pakai, hak sewa, the right to clear land and the right to collect forest produce, plus rights set by later law — and later sections define each one: who may hold it, how it is created, how it ends.
Registration is set up, not detailed: article 19(1) provides for land registration across Indonesia, to secure legal certainty, and hands the detail to a Government Regulation — today PP 24/1997, as amended by PP 18/2021.
Three rules that do the work for foreigners
Article 21(1) closes hak milik to foreigners. Article 21(3) deals with a foreigner who ends up holding it anyway, by inheritance or marriage: one year to give it up. Article 26(2) deals with a foreigner who tries to hold it by arrangement: the act is void by operation of law, and payments made cannot be reclaimed. Article 27 then lists both as ways hak milik ends — the land falls to the State by revocation, surrender, abandonment, or under arts. 21(3) and 26(2).
Hak pakai: open to foreigners, transferable on conditions
Article 41(1) defines hak pakai as the right to use or take the produce of State land or another's land, on terms set by the grant or by agreement with the owner — not a lease, and article 42 lists its holders: citizens, foreigners domiciled in Indonesia, Indonesian legal entities, and foreign legal entities with a representative office. Article 43 is the one that matters at resale, and it is rarely quoted. Hak pakai over State land may be transferred only with the permission of the competent official (UUPA (Law 5/1960) art. 43(1)); hak pakai over someone’s hak milik may be transferred only if the agreement with the owner allows it (UUPA (Law 5/1960) art. 43(2)). A buyer who expects to sell one day should read the grant agreement for exactly that clause.
Hak sewa: two articles and a sentence
Articles 44 and 45 are the whole statutory law of the Bali lease, and the elucidation adds that the State cannot lease out land, because the State is not its owner. What that leaves to the contract.
What the UUPA does not settle
Terms of years for HGB and hak pakai, the conditions on a foreigner’s home, the land-area and price limits, and strata title all sit in later instruments — chiefly PP 18/2021 and Permen ATR/BPN 18/2021. The UUPA also sets no term for a lease at all. Reading the UUPA alone, a foreign buyer would miss most of the numbers that decide a purchase. PP 18/2021, article by article.
This is commentary, not a translation, and not legal advice. We quote the operative words of the articles we cite; the official Indonesian text on JDIH BPK is the authority.
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Questions on this page
What is the UUPA?
Law 5/1960 on the Basic Regulations of Agrarian Principles (Undang-Undang Pokok Agraria, UUPA) — Indonesia's framework land law. It recognizes the land rights (art. 16(1)), reserves hak milik to Indonesian citizens (art. 21(1)), and defines HGB, hak pakai and hak sewa (arts. 35, 41, 44). It is still in force.
What does UUPA article 21 say about foreigners?
Article 21(1): only Indonesian citizens may hold hak milik. Article 21(3): a foreigner who acquires hak milik by inheritance without a will or through marital community of property must give it up within one year, or the right lapses and the land falls to the State.
What does UUPA article 26(2) say?
That any sale, exchange, gift or other act meant to transfer hak milik directly or indirectly to a foreigner is void by operation of law, the land falls to the State, and payments already received cannot be reclaimed. It is the article nominee arrangements run into.
Can hak pakai be sold under the UUPA?
Yes, with conditions. Over State land it may be transferred only with the competent official's permission (art. 43(1)); over someone's hak milik only if the agreement with the owner allows it (art. 43(2)).
Can foreigners hold rights under the UUPA?
Yes: hak pakai (art. 42(b)) and hak sewa (art. 45(b)) are open to foreigners domiciled in Indonesia. Hak milik (art. 21(1)) and HGB (art. 36(1)) are not.
Sources cited on this page
Every rule above was read in the Indonesian original on 20 September 2026, not from an English summary. How we check this.