New Land Regulation Expands Regional Authority for Granting Land Rights, Introduces Special Arrangements for Batam Free Trade Zone and IKN
On April 28, 2025, the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency issued Regulation No. 5 of 2025 on the Delegation of Authority for the Determination of Land Rights and Land Registration Activities (the “Regulation”). The Regulation replaces the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency No. 16 of 2022 as amended by the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency No. 2 of 2025 (the “Previous Regulation”), which had the same title as the Regulation. This Regulation is issued to improve the efficiency and effectiveness of land services to the public as well as to facilitate investment in the Batam Free Trade Zone and the Capital City of Nusantara (“IKN”). The Regulation came into force upon its issuance.
The Regulation introduces specific provisions for the allocation of land rights within the Batam Free Trade Zone and IKN, aligning with its objectives. Furthermore, the updated framework has adjusted the categories and maximum area limits that serve as the basis for determining land rights.
Below we set out the key highlights of new provisions under the Regulation.
♦ New Classifications for Delegation of Authority
The Previous Regulation and the Regulation stipulate that the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency may delegate authority through delegation or sub-delegation based on several indicators, namely, (i) geographical conditions and population density, (ii) social conditions, (iii) area of land and number of services, (iv) value of land, and (v) potential risk of conflict. These indicators serve as a basis to create classifications in the framework of delegating the authority to determine the freehold title (hak milik) for individuals and right-to-cultivate (hak guna usaha or “HGU”), right-to-build (hak guna bangunan or “HGB”), and right-to-use (hak pakai or “HP”) for both individuals and legal entities.
The Regulation updates the classifications set out in the Previous Regulation into the following:
♦ New Land Area Threshold for Delegation of Authority for HGB and HP
In relation to the above, the Regulation also updates the maximum land area threshold that a Head of a Regional Office of the National Land Agency (a “Regional Office Head” or Kepala Kantor Wilayah) is permitted to stipulate decisions on concerning HGB and HP for legal entities. Below is a table that highlights the updates:
♦ Special Provisions for Batam Free Trade Zone and IKN
The Regulation provides new provisions that are related to the administration of HP and HGB of lands that are located in the Batam Free Trade Zone and IKN. The new provisions provide the Regional Office Heads at the Batam Free Trade Zone and IKN with authority to grant HGB and HP to legal entities under special arrangements.
For land in IKN, the Regional Office Head is authorized to stipulate all decisions on HGB and HP for legal entities. This special arrangement includes both agricultural land and non-agricultural land.
For land in the Batam Free Trade Zone, the special arrangements are as follows:
- The Regional Office Head may stipulate decisions on:
- HGB and HP for legal entities on State-controlled Land with an area of up to 250,000 m²; and
- HGB and HP for legal entities on land with HPL with an area of more than 1,000,000 m² up to 2,000,000 m².
- Head of Land Office may stipulate decisions on:
- HGB for legal entities on land with HPL with an area of up to 1,000,000 m²; and
- HP for legal entities on non-agricultural land with HPL with an area of up to 1,000,000 m².
AKSET
Please contact Inka Kirana (ikirana@aksetlaw.com), M. Raehan A. Fadila (mfadila@aksetlaw.com), or Giorgio Alexander William Robot (grobot@aksetlaw.com) for further information.
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