Strategic Licensing in the Housing Business in Indonesia

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Is the Property Sector in Indonesia Open to Foreign Investment?", "How To Buy Land In Indonesia?", you may read also "Principles of Buying Land in Indonesia" and on this occasion we will discuss about 'Strategic Licensing in the Housing Business in Indonesia'.

In the previous article, questions have been answered regarding the opening up of the property sector for foreign investment in Indonesia, and on this occasion we will discuss further what permits need to be obtained from the relevant government agencies if you are interested in investing in this sector. Licensing in the property business sector in Indonesia is not small in number, but if there is a simplification, there are at least 9 strategic permits that need to be known. Of course, these 9 strategic licenses are the www.hukumindo.com platform version. Please have a look as described below:[1]

1. Environmental Permit, is a permit granted to every person conducting a Business and/or Activity which is required to have an analysis of environmental impacts in the context of environmental protection and management as a prerequisite for obtaining a Business and/or Activity permit.
2. Description of the General Spatial Plan, is divided into several categories ranging from district, city, provincial, to national scales. In general, the content of the spatial plan includes the spatial structure plan and the spatial pattern plan. In practice, this letter is also closely related to another letter, namely the Regional Spatial Plan (RTRW) in an area.
3. Land Use Permit, is a permit granted to a company/agency/institution based on a location permit/location determination that has been approved by the Regent. Land Utilization Permit is one of the administrative requirements to obtain a Building Permit (IMB).
4. Principle Permit, is a license from the Investment Coordinating Board (BKPM) that must be owned by business owners or investors who want to open a business or invest in Indonesia. The investment in question can be in the form of Foreign Investment (PMA) or Domestic Investment (PMDN). This license is valid for foreign companies that choose Indonesia as a place to invest.
5. Location Permit, is a permit granted to a business actor to obtain the land needed for his business and/or activity and also applies as a permit to transfer rights and to use the land for his business and/or activities.
6. Environmental Impact Analysis, is a study of the possible changes in socio-economic aspects and biophysical characteristics of the environment due to an activity plan. 
7. Traffic Impact Permit, is a study or study of the traffic impact of a particular activity or business, the results of which will be contained in an "Andalalin" document or a traffic regulation plan.
8. Site Plan Approval, is primarily made for projects with a land area of ​​up to 50 hectares according to proof of land ownership. This letter also stipulates that the size of the land area may not exceed the land area stated in the Space Utilization Permit and Location Permit.
9. Building Permit, is a permit granted by the Regional Head (Regent or Mayor) to building owners to build new, modify, expand, reduce, and/or maintain buildings in accordance with applicable administrative and technical requirements.

It should be noted, these licenses are related to one another, this has a logical consequence that one license will not be issued if the other is not or has not been approved. There are various agencies authorized to issue these permits, both at the district/city and provincial levels to the central level. It is better if the licensing process is carried out by human resources with a background in law so that the level of fluency and success is reasonable. It should also be noted that the permissions described in this article are only some, not all. In fact, according to the author's experience when working as a site acquisition in a private company in Jakarta, for housing a permit related to a public cemetery is also required. And if you have any legal issue with this topic, contact us then, feel free in 24 hour, we will be happy to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

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Reference:

1. "Siapkan 9 Izin Perumahan Ini Sebelum Memulai Bisnis Properti", perizinanjakarta.com., Diakses pada tanggal 23 Agustus 2022, https://perizinanjakarta.com/siapkan-9-izin-perumahan-ini-sebelum-memulai-bisnis-property/