The Indonesian government recently introduced new regulations to establish a Land Bank (the Regulations). The Regulations also provide the legal framework within which the Land Bank must operate. The Land Bank is a special entity established by the central government with the authority to manage lands. The main purpose of the Land Bank agency is to ensure that land is available for specific purposes including public interest projects, economic redistribution, and agrarian reform.

The Regulations give the Land Bank agency the authority to, among other things:

• plan its operations and priorities;
• acquire and manage land;
• enter into relationships to jointly share/use land; and
• distribute and provide land for specific purposes.

The Land Bank can earn income from the land through sales, leasing, fees for land use, or business ventures (on its own or with business partners) using the land. Third parties may use the land on the basis of Right to Cultivate (Hak Guna Usaha), the Right to Build (Hak Guna Bangunan) or the Right to Use (Hak Pakai).
The Land Bank introduces a centralised system that simplify the acquisition and use of land for business purposes.

* Government Regulation No. 64 of 2021 on Land Bank Agency. These Regulations have been implemented in accordance with the provisions of Law No. 11 of 2020 on Job Creation.