Foreign investment in Nusantara Smart City is legally structured around three pillars: a locally incorporated foreign investment company (PT PMA) as the standard entry vehicle, state-granted land rights with extended renewable cycles instead of freehold, and an incentive framework administered by the Nusantara Capital City Authority (OIKN) under the capital’s founding law and its implementing regulations. Once those three pillars are understood, most of the apparent complexity of entering Indonesia’s new capital resolves into a sequence of well-defined steps.
This page sets out the legal basis, the entry structures, the sectors drawing international capital, the incentive landscape, and the checks that keep a market entry clean. It is general information, not legal or financial advice: the framework has been amended more than once since the capital was established, so current rules should always be confirmed through official OIKN and government publications with licensed Indonesian advisors.
What is the legal basis for investing in the new capital?
Nusantara’s legal foundation is Law No. 3 of 2022, which established the capital in East Kalimantan and created OIKN, and which was amended in 2023 to strengthen the authority’s powers over investment and land. Implementing regulations layer on top, covering business licensing, investment facilities, and land-right cycles designed to be longer and more renewable than standard Indonesian practice. For a foreign investor, two consequences follow. First, OIKN acts as a near single gateway for capital-city investment, reducing multi-agency friction. Second, the framework is young and periodically revised, which makes checking the current text — rather than a summary from any secondary source, including this one — a standing discipline.
Which entry structures can foreign investors use?
The workhorse structure is the PT PMA, Indonesia’s foreign-owned limited company, which can hold land rights, hire staff, invoice locally, and receive incentives. Around it sit several alternatives suited to different commitments.
| Structure | Best for | Land capability |
|---|---|---|
| PT PMA (foreign investment company) | Operating businesses, property holding | Can hold HGB and other rights |
| Joint venture with Indonesian partner | Shared-risk projects, local expertise | Via the JV entity |
| PPP consortium membership | Infrastructure participation | Project-defined |
| Long lease or management contract | Operators, asset-light entry | Contractual, no land holding |
Founders planning an operating business rather than an asset position can follow the entity process in start a company in Nusantara capital city.
How do land rights work for foreign capital?
Indonesia does not sell freehold to foreigners, so foreign capital holds Nusantara property through rights granted by the state — principally Hak Guna Bangunan (right to build) and Hak Pakai (right to use) — held via a PT PMA, with the capital’s regulations providing extended cycles and renewal mechanics specifically designed for long-payback investment. The right’s term, renewal conditions, and any development obligations are contractual facts that vary by allocation, and they define both your security of tenure and your exit value. Confirming them in writing with OIKN, and having Indonesian counsel review every land document, is non-negotiable diligence — not because problems are common, but because the remaining term follows the asset into every future sale.
Which sectors are drawing international capital?
The capital’s investment pipeline is deliberately broad, and international interest has already materialised in concrete form: the first international hotel opened in 2024, and developers from several countries have begun mixed-use, education, and energy projects. The sectors most actively courted include:
- Property development: residential, hotels, offices, and the assets covered in Nusantara business district property.
- Infrastructure: transport, energy, water, and digital networks under PPP schemes, detailed in Nusantara Smart City infrastructure investment.
- Smart-city technology: command systems, mobility, and utility platforms.
- Education and healthcare: international schools and medical facilities for the arriving population.
- Hospitality and services supporting the construction-phase economy.
Sector openness is defined by regulation and updated periodically, so a current check against the capital’s investment rules belongs at the start of any sector plan.
What incentives and obligations should investors weigh?
The capital’s regulations provide fiscal and non-fiscal facilities for qualifying investments — including tax holidays with extended durations for priority sectors, customs and immigration facilitation, and streamlined licensing through OIKN — balanced by obligations such as realised investment commitments and development timelines. Because eligibility thresholds, durations, and procedures are set in regulation and revised over time, this page deliberately avoids quoting figures: the reliable numbers are the ones in the current official texts and OIKN’s investment materials, interpreted with a licensed Indonesian tax advisor. The practical takeaway is directional — the incentive package is designed to be materially stronger than standard national treatment, and it rewards early, well-documented applications.
Frequently Asked Questions
Can foreigners invest directly in Nusantara Smart City?
Yes. The standard route is a PT PMA, a locally incorporated foreign investment company that can hold land rights, operate, and receive incentives, with OIKN acting as the capital’s investment gateway. Joint ventures, PPP consortium membership, and contractual entries such as long leases or management agreements serve investors who want lighter structures.
Can foreign investors own land in the capital?
Not as freehold — Indonesian law reserves that for citizens. Foreign capital holds property through state-granted rights, principally Hak Guna Bangunan and Hak Pakai, via a PT PMA, and Nusantara’s framework provides extended, renewable cycles for these rights. The specific term and renewal conditions attach to each allocation and should be confirmed in writing.
What law governs investment in Nusantara?
Law No. 3 of 2022 established the capital and its authority, OIKN, and was amended in 2023 to strengthen investment and land powers; implementing regulations cover licensing, facilities, and land cycles. Because the framework is young and periodically revised, investors should verify the current texts through official channels before structuring any commitment.
Are there special incentives for investing in the capital?
Yes — the capital’s regulations provide fiscal facilities such as extended tax holidays for qualifying sectors, plus customs, immigration, and licensing facilitation through OIKN, in exchange for realised investment commitments. Exact thresholds and durations are set by regulation and change over time, so current figures should come from official OIKN materials and a licensed tax advisor.
Is investing in Nusantara guaranteed to succeed?
No investment is. The capital is a phased project scheduled toward 2045, and outcomes depend on relocation pace, infrastructure delivery, and policy continuity. The framework is built to attract capital, but prudent investors underwrite conservative timelines, verify preparation status project by project, and treat all projections — official or private — as assumptions to test.
Start Your Nusantara Market Entry
Our business development desk supports foreign investors with structure planning, local partners, and OIKN engagement for the capital. Message us on WhatsApp or email bd@juaraholding.com to discuss your entry.