The Urgency of Registering Land Lease Agreements for Foreign Nationals

Abstract

The increasing use of long-term land lease agreements by foreign nationals in Indonesia has raised significant legal concerns regarding the effectiveness of the nationality principle under the Basic Agrarian Law. Although lease agreements constitute valid contractual relationships under the Indonesian Civil Code, the interaction between private law, agrarian law, investment law, and land administration regulations has created legal gaps and regulatory disharmony that enable foreign nationals to obtain de facto long-term control over land without formally acquiring ownership rights. This study aims to analyse these normative inconsistencies, examine how lease agreements may function as instruments of legal smuggling (fraus legis), and formulate an appropriate regulatory reform model. Employing a normative juridical method based on statutory, conceptual, comparative, and case approaches, this study analyses Indonesian legislation, compares regulatory frameworks in Singapore, Malaysia, and Thailand, and examines the PARQ Ubud case as evidence of the practical consequences of regulatory fragmentation. The findings demonstrate that the principal weakness of the current legal framework lies not in the legality of lease agreements themselves, but in the absence of mandatory registration, limitations on lease duration, and effective administrative supervision. This study contributes to Indonesian agrarian law by reconceptualising legal smuggling beyond traditional nominee arrangements, identifying legal gaps and regulatory disharmony across multiple legal instruments, and proposing a regulatory reform roadmap centred on the mandatory registration of land lease agreements involving foreign nationals to strengthen legal certainty, administrative oversight, and sustainable land governance.