JAKARTA – The Acting Head of the Nusantara Capital Authority (OIKN), Basuki Hadimuljono, has assured that investors in the Nusantara Capital City (IKN) will be granted several significant benefits for their investments. Among the key advantages is the provision of long-term land use rights, including Building Rights (HGB) and Cultivation Rights (HGU), which can be granted directly and without the usual multi-tiered process.
Basuki highlighted that these provisions are stipulated in Presidential Regulation (PP) No. 29 of 2024 concerning Business Licensing, Ease of Doing Business, and Investment Facilities for Business Actors in the Nusantara Capital. According to this new regulation, Article 18, which governs the granting of land rights, has been amended. This amendment allows IKN investors to directly secure HGB for a period of up to 80 years, HGU for up to 95 years, and usage rights for up to 80 years—all without having to undergo the traditional phased process.
“This regulation is specifically designed for IKN to make the investment process more attractive. The previous system under the land tenure regime was more time-consuming, but with this presidential regulation, the process is expedited,” Basuki explained during a meeting at the Ministry of Public Works and Public Housing (PUPR) on Tuesday, June 20, 2024.
He further clarified that the issuance of HGU, HGB, and Usage Rights can be structured in two cycles. This means that the total possible tenure for HGU could extend up to 190 years, HGB up to 160 years, and Usage Rights up to 160 years. Basuki emphasized that this direct and non-tiered provision of land rights is exclusively applicable to the IKN region.
“In the past, HGB might have been granted for 20 years initially, followed by extensions of 30 years and another 30 years. Now, we have simplified it to 80 years right away,” he stated.
The provisions for land rights benefits for IKN investors are not only detailed in PP No. 29 of 2024 but are also included in Presidential Regulation (Perpres) No. 75 of 2024 regarding the Acceleration of the Development of the Nusantara Capital. Article 9 of this Perpres outlines that HGU can be granted for nearly two centuries to IKN investors, structured through two cycles.
Specifically, Article 9, paragraph 2a of the regulation states, “The cultivation rights (HGU) can be granted for a maximum period of 95 years through the first cycle, with the possibility of renewal for a second cycle of up to 95 years, based on criteria and evaluation stages.”
Additionally, the regulation also stipulates that Building Rights (HGB) can be granted for a maximum period of 80 years for the first cycle, with the possibility of an extension for a second cycle of up to 80 years, making a total of 160 years. For usage rights, the maximum period is 80 years for the first cycle, with a potential extension for another 80 years during the second cycle, based on evaluation criteria and stages.
“The granting of land rights through the first cycle, as referred to in paragraph 2, will be conducted by the Ministry responsible for agrarian affairs and land administration, based on an application submitted by the Nusantara Capital Authority,” according to Article 9, paragraph 3. These regulations demonstrate the Indonesian government’s commitment to creating a conducive investment environment in the new capital, aimed at accelerating its development and ensuring long-term investor confidence. The strategic decision to offer extended land use rights is expected to be a significant factor in attracting both domestic and international investors to participate in the development of IKN, setting the stage for its future as a global hub of innovation and sustainability.
