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Overview of relevant laws and regulations in IndonesiaIndonesian real property rights are governed under Law No. 5 Year 1960 regarding Agrarian Law (the“Agrarian Law”) and various implementing regulations issued by the Indonesian central government andthe Indonesian provincial governments.The Agrarian Law recognises the rights of legal persons to own and to use lands subject to various type ofrights granted by the Agrarian Law which are, among others, (a) Right of Ownership (“Hak Milik”), (b) Rightto Use (“Hak Pakai”), (c) Right to Cultivate (“Hak Guna Usaha”), (d) Right to Build (“Hak Guna Bangunan”),(e) Right to Lease (“Hak Sewa), and (f) other rights issued pursuant to the implementing laws andregulations such as Strata Title Rights (“Hak Atas Satuan Rumah Susun”).Pursuant to the Indonesian Government Regulation No. 10 of 1961 as further amended by the IndonesianGovernment Regulation No. 24 of 1997 ownership of lands are evidenced by the registration of the holderof the land in the Land Register of the relevant local land office (Badan Pertanahan) where such land islocated.RIGHTS TO OWN AND/OR TO USEReferring to the above there are various forms of rights for the use of land pursuant to the Agrarian Law,some of such forms are set out below.Hak Milik (HM/Right to Own). The closest form of land title to an internationally recognised concept of“freehold” title is Hak Milik or “Right of Ownership”. A Hak Milik title is available only to Indonesianindividuals and certain Indonesian religious and social organisations and government bodies, as regulatedin Government Regulation No. 38 of 1963. Hak Milik title cannot be obtained by companies (whetherIndonesian or foreign owned) or by foreign individuals.Hak Guna Bangunan (HGB/Right to Build). HGB is a land right to build on land that belongs to anotherparty. Indonesian individuals and Indonesian companies (or foreign investment companies incorporated inIndonesia) may acquire HGB titles. HGB titles can be granted on (i) State-owned land by the decision of theappointed relevant authority, (ii) Hak Pengelolaan (“HPL/Right to Manage”) land by the decision of theappointed relevant authority decision based on the recommendation of the HPL holder and (iii) Hak Milikland by a mutual agreement between the Hak Milik holder and the prospective HGB holder stated in thedeed made before the Land Official. In a piece of a land, a number of HGB certificates can be issueddepending on the ownership of the land. A HGB title is granted for a maximum initial term of 30 years. Byapplication to the relevant local land office upon the expiration of this initial term, a HGB title may beextended for an additional term not exceeding 20 years. Following expiration of this additional term, arenewal application may be made. Certain requirements and procedures for a HGB renewal applicationmust be complied with and followed including submitting relevant supporting documents and payingcertain amount of administrative fee chargeable by the local land office and subject to an inspection to thelocation by the local land office.The New Investment Law provides incentives which includes offering land title for longer periods such thateligible investors may hold HGB title in the form of grant and an advance acceleration of land title for aperiod of 50 years, and may be renewed for an additional term of 30 years.Hak Pakai (HP/Right to Use). Hak Pakai is the right to use and/or collect the products of land directlyadministered by the State (State-owned land), or of land owned by other persons (based on Hak Milik).Hak Pakai over land can be granted by the government in the form of a decree or by an Indonesian citizenin the form of an agreement. The decree or the agreement gives the user the rights and obligations laiddown in that decree or agreement. Only (i) Indonesian citizens, (ii) Indonesian foreigners domiciled inIndonesia, (iii) legal entities established under Indonesian law and having domicile in Indonesia and(iv) foreign entities that have representative in Indonesia, may have such rights and the holder of such landright may mortgage the land as security. Hak Pakai titles can be granted on (i) State-owned land by thedecision of the appointed relevant authority, (ii) HPL pursuant to the decision of the relevant Minister or therelevant appointed authority based on the recommendation of the owner of the HPL title or (iii) Hak Milikland by a mutual agreement between the Hak Milik holder and the prospective HGB holder stated in thedeed made before the Land Official.241