President Joko Widodo (Jokowi) has announced plans to allow investors to put their money into the new capital of Indonesia, Nusantara (IKN), for up to 95 years.
This policy is contained in Government Regulation No. 12 of 2023 concerning Giving Licensing, Ease of Business and Investment Facilities for Businesspeople in the Capital City Nusantara which is valid from 6th March 2023.
In the regulation, Jokowi gave permission for investors to take a chance to invest in the new city within a period of decades through the Cultivation Rights (HGU).
“The period of HGU* (Hak Guna Usaha) above the Management Rights (HPL) of the Authority of the Capital City Nusantara is given no later than 95 years through one cycle,” wrote Article 18 PP 12/2023.
*Hak Guna Bangunan – Right to Build, Hak Guna Usaha – Right to Cultivate, and Hak Pakai – Right to Use.
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Long-term business in one cycle is divided into several stages.
- First, granting rights for a maximum of 35 years.
- Second, you can extend rights for a maximum period of 25 years.
- Third, you can update rights for a maximum period of 35 years.
“HGU given for the first cycle with a maximum period of 95 years as referred to in paragraph (1) is outlined in the decision to grant rights and recorded in the HGU certificate,” contents Article 18 paragraph 2 of the regulation.
As for the extension and renewal of HGU can be given at once after five years HGU is used and utilised effectively in accordance with the purpose of giving rights.
Furthermore, within a 10-year grace period before the first cycle of HGU expired, the businessperson could apply for HGU re-granting for the second cycle with a maximum period of 95 years in accordance with the land use agreement as before.