JAKARTA – In a bold move aimed at stimulating investment in the newly established Nusantara Capital City (IKN), the Nusantara Capital Authority (OIKN), led by Acting Head Basuki Hadimuljono, has introduced a new policy granting investors extended land rights without the usual phased approval process. This change is expected to make the investment climate in IKN significantly more attractive by offering direct access to long-term Building Rights (HGB) and Cultivation Rights (HGU).
This policy is encapsulated in Presidential Regulation (PP) No. 29 of 2024, which deals with Business Licensing, Ease of Doing Business, and Investment Facilities in IKN. A crucial amendment in this regulation is found in Article 18, where the procedure for obtaining land rights (HAT) has been simplified. Investors in IKN can now receive 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 the need for the traditional incremental approval process.
Basuki highlighted that this streamlined process is designed specifically for IKN to enhance its investment appeal. “Under the previous system, the process of acquiring land rights was much more drawn out and complex. This new regulation simplifies and speeds up the process considerably,” he stated during a briefing at the Ministry of Public Works and Public Housing (PUPR) on Tuesday, June 20, 2024.
In a further departure from traditional practices, the regulation allows for these land rights to be granted in two cycles, potentially extending the duration of HGU to 190 years, HGB to 160 years, and usage rights to 160 years. Basuki pointed out that these extended land rights are specific to the IKN area, offering a unique investment opportunity that is not available elsewhere in the country.
“Previously, HGB was granted in phases—initially for 20 years, then extended by 30 years, and again by another 30 years. Now, we are offering the full 80 years in one go,” Basuki clarified.
The policy is further reinforced by Presidential Regulation (Perpres) No. 75 of 2024, which governs the Acceleration of Development in the Nusantara Capital. Article 9 of this regulation outlines the possibility of granting HGU for an initial period of 95 years, with an option for a second 95-year cycle, subject to meeting specific criteria and evaluations.
Similarly, HGB can now be granted for up to 80 years initially, with the possibility of an additional 80-year extension, bringing the total potential tenure to 160 years. Usage rights are structured in the same way, with a maximum of 80 years per cycle.
The process for granting the first cycle of these land rights will be managed by the Ministry of Agrarian Affairs and Spatial Planning, based on requests from the Nusantara Capital Authority, as specified in Article 9, paragraph 3.
These changes reflect the government’s strong commitment to making IKN a key investment destination. By offering extended land rights and simplifying the approval process, the government is aiming to attract substantial investments, which are vital for the rapid development and success of Indonesia’s new capital city.
