The dynamics of investment in Indonesia are shifting again after the Constitutional Court annulled the previous regulation that had allowed the possibility of land-use rights of up to 190 years in IKN Nusantara. The decision immediately sparked new discussions about legal certainty, the direction of national land policy, and how this change will affect investor interest, which has always been cautious from the start.
The situation feels like a new chapter. The construction of IKN continues, but its regulatory foundation is now being reorganized so the state still has space to control land use. Many business players are waiting for further clarity, while the public wants to understand the reasons behind the change and what it means for the future of the new capital.
Regulatory Revisions Shift Policy Directions in IKN Nusantara
The Constitutional Court ruling on case 185/PUU-XXII/2024 marks an important turning point. The petitioners challenged articles in the IKN Law that had previously allowed land control in two extended cycles. Under the old rule, HGU could reach 190 years, and HGB or usage rights could extend up to 160 years. These durations were considered unrealistic because they left no room for meaningful evaluation.
Constitutional Judge M. Guntur Hamzah emphasized that the core principle lies in the state’s ability to exercise oversight. He explained that granting land rights for excessively long periods could eliminate the state’s opportunity to reassess land use. In his view, the previous policy exceeded the limits set by the Basic Agrarian Law (UUPA).
With this decision, the Court annulled the two-cycle land control scheme. The concept returns to limits that align with the national agrarian system. The state still must provide certainty to investors, but not at the cost of losing control over land in strategic areas such as IKN Nusantara.
Legal and Social Impacts Emerging in Indonesia’s IKN Nusantara
Legal Director of the Center of Economic and Law Studies, Mhd Zakiul Fikri, explained the significance of the ruling. Citing cnnindonesia, he said, “Thus, the maximum term of HGU in IKN is now limited to 35 years. It can be extended for 25 years and renewed for 35 years, bringing the total to a maximum of 95 years.” According to him, the new limit restores the principle that the state remains in control of land.
Fikri argued that the old rule could have weakened the state’s ability to reassess land functions. He noted that state flexibility is essential to ensure land continues to fulfill its social function. Without that flexibility, the state risks failing to uphold the constitution. “In the context of land as a source of livelihood and public prosperity, losing that flexibility means neglecting the mandate of Article 33 paragraph (3) of the 1945 Constitution,” he said firmly.
He also highlighted the impact on Indigenous communities. He cited data from the Indigenous Peoples Alliance of the Archipelago, which recorded 301 customary land conflicts between 2018 and 2022. There is also an estimate of 20,000 Indigenous residents affected by the development of IKN. These numbers show that land policies cannot ignore communities closest to the development area.
A Wait-and-See Approach to the Future Certainty of Indonesia’s IKN Nusantara
CORE Indonesia researcher, Azhar Syahida, viewed the issue from an investor’s perspective. According to him, capital owners need two things before taking action: potential returns and project sustainability. He observed that these two factors have not been strong enough to attract many investors to IKN.
Azhar compared Indonesia’s situation to other countries that handled capital relocation more thoroughly. He stated that Indonesia’s approach has looked rushed from the start. He explained, “From the beginning, this capital relocation policy seemed forced with minimal study. Meanwhile, in other countries, such as Australia, the relocation of the capital from Melbourne to Canberra went through deep and lengthy development studies.”
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To him, investors need a clear vision of the future. They want to know whether the project will continue even when the government changes. This question heavily influences their decisions, especially because long-term investments rely on policy certainty.
Rebuilding Investment Confidence and the Importance of Legal Assistance
The Constitutional Court’s decision not only reshapes land regulations but also requires new clarity from the government on how these rules will be implemented. Investors need to understand the licensing flow, land documents, and the legal processes they must navigate. Without complete explanations, they will keep calculating risks and delaying decisions.
At moments like this, many businesses need professional guidance to navigate legal and administrative procedures. Consulting services become essential, especially those familiar with the latest regulations and capable of ensuring company documents remain compliant.
This is where Bizindo can help. Bizindo provides company licensing services, legal processing, investment assistance, and other administrative needs essential for businesses entering a project as large as IKN Nusantara. If you want to ensure your business operates safely, correctly, and in line with the new regulations, Bizindo is ready to be the partner that supports every step of your journey amid Indonesia’s evolving investment landscape.
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