Indonesia does not have a single inheritance regime that applies uniformly to every family and every type of asset. Islamic inheritance law, the Indonesian Civil Code, and customary inheritance law coexist. They are not, however, three options that may be freely selected after a person dies.
The analysis must begin with the identity and relationships of the parties, religion, the relevant customary-law context, nationality, and any cross-border elements. The nature and location of each asset may also trigger additional rules. The first question is therefore not only “who are the heirs?” but also “which legal framework and forum apply to the person, family relationship, and asset concerned?”
What Determines the Applicable Inheritance Framework?
1. Islamic inheritance law
Article 49 of the Religious Courts Law places inheritance disputes between Muslims within the jurisdiction of the Religious Courts. In practice, Book II of the Compilation of Islamic Law (KHI) is a principal substantive reference for heirs, inheritance shares, wills, and estate administration.
The religion of the deceased and the parties is therefore an important starting point. Family records, marital status, the origin and classification of property, debts, and any dispute must still be examined before a distribution can be determined.
2. The Indonesian Civil Code
The Civil Code regulates intestate and testamentary succession for persons subject to its provisions. It is unsafe to reduce this framework to “all non-Muslims” or “all foreign nationals.” In a specific matter, the legal basis for applying the Civil Code, the family relationships, civil-status records, and any cross-border elements must be analysed separately.
3. Customary inheritance law
Customary inheritance law is not a single national code with one distribution formula. Its application and content depend on the living law of the relevant community, kinship structure, the position of family members, classification of property, proven local practice, and developments in jurisprudence. Labels such as “patrilineal,” “matrilineal,” or “bilateral” are therefore not enough, by themselves, to determine entitlement to an asset.
4. Cross-border elements
Where the deceased, heirs, marriage, documents, or assets are connected with more than one country, a private international law analysis is required. Indonesia continues to rely on legacy conflict-of-laws provisions, including Articles 16 to 18 of the Algemene Bepalingen van Wetgeving, while Indonesian private international law remains only partially codified.
Nationality, the nature and location of assets, the validity of foreign documents, and the recognition or enforcement of decisions from another jurisdiction must be considered separately. It is therefore too broad to say that the Civil Code automatically applies to every foreign national.
Intestate and Testamentary Succession
Article 830 of the Civil Code provides that succession takes place only upon death. Two routes should generally be distinguished:
- Ab intestato succession, which is succession under the law when no valid will governs all or part of the estate.
- Testamentary succession, which is a disposition under a valid will.
A will does not automatically replace the applicable legal framework. It operates within mandatory legal limits, including protected inheritance portions, maximum testamentary allocations, capacity requirements, and prescribed formalities.
Requirements and Limits for Wills
| Framework | Capacity and form | Key limits |
|---|---|---|
| Civil Code | A testator must be capable of reason. Article 897 restricts persons under 18 from making a will. Ordinary forms include holographic, public, and secret or closed wills, each with different formalities under Articles 931 to 940. | Article 913 protects the legitime portie of heirs in the direct line. Exceptional wills in specified circumstances remain subject to the officers, witnesses, and limited validity periods set out in Articles 946 to 953. |
| KHI | Article 194 requires a testator to be at least 21 years old, of sound mind, and acting without coercion. Article 195 recognises an oral will before two witnesses, a written will before two witnesses, or a will before a notary. | A will is generally limited to one third of the estate unless all heirs agree. A testamentary gift to an heir also requires the consent of all heirs. |
| Customary law | The form, evidence, and effect of a deceased person’s statement must be assessed against the proven living law, family facts, and community practice. | A notarial instrument does not automatically eliminate rights, duties, or claims arising under customary law that is proven to apply. |
Defective form can have serious consequences. A secret will under the Civil Code is not the same as a private document kept by the testator. A holographic will must be handwritten and signed by the testator and deposited with a notary in the manner prescribed by law. An emergency does not remove the statutory requirements for the relevant witnesses or authorised officer.
When the Deceased Owns an Indonesian Company
Shares in a company are patrimonial assets that may form part of an estate. Inheriting shares is not the same as automatically becoming a director or commissioner. Appointment to a corporate office follows a separate corporate process.
For shares in an Indonesian limited liability company, valid succession documents must be translated into corporate administration. The board of directors must update the shareholder register and notify the change in the shareholder composition to the Minister in accordance with Article 56 of the Company Law. Article 57(2) generally excludes transfers by operation of law from a company’s right-of-first-offer or corporate-approval conditions, although approval from a competent authority may remain relevant in an inheritance.
For a foreign investment company, or PT PMA, the review does not end with inheritance law. The heir’s nationality, sector-specific foreign ownership restrictions, the articles of association, any shareholders’ agreement, sectoral licences, beneficial ownership records, and the consistency of AHU and OSS data should be reviewed. An inheritance distribution that is legally valid may still require corporate implementation before it is administratively effective.
When the Estate Includes Land
Indonesian land rights cannot all be treated in the same way. Hak Milik, or right of ownership, may generally be held only by Indonesian citizens, subject to limited exceptions for designated legal entities. Article 21(3) of the Basic Agrarian Law specifically provides that a foreign national who acquires Hak Milik by intestate succession must relinquish that right within one year. If it is not relinquished, the right expires by operation of law and the land falls to the State, without extinguishing existing encumbrances held by other parties.
This rule does not mean that foreign nationals are prohibited from holding every type of land right. Hak Pakai, or right of use, and other rights are governed by separate eligibility and regulatory requirements. The type of right, the basis of transfer, the heir’s nationality, and the applicable deadline must be verified before the asset is distributed or sold.
A Safer Estate-Planning Sequence
- Map the persons and family relationships. Verify religion, nationality, marriage, descendants, adoption, and civil-status documents.
- Map the assets and liabilities. Separate personal property, marital property, debts, security interests, shares, accounts, and land rights.
- Determine the legal framework and forum. Do not select a system merely because its distribution is perceived as more favourable.
- Check asset-specific rules. Review articles of association and shareholders’ agreements for company shares, and the type of land right and holder eligibility for land.
- Prepare a compliant will. Use the form, witnesses, notarial process, allocation limits, and language that can be enforced under the applicable framework.
- Coordinate cross-border elements. Confirm that documents, translations, legalisation or apostille, tax treatment, and recognition procedures work in each relevant jurisdiction.
- Review the plan periodically. Changes in marriage, nationality, ownership structure, asset location, or regulation may change the analysis.
Conclusion
Indonesia’s three inheritance frameworks are not three freely selectable menus. The relevant framework is determined by the status and relationships of the parties, religion, proven customary law, cross-border elements, and the characteristics of the assets. For foreign nationals or cross-border families holding shares in an Indonesian company, a PT PMA, or land in Indonesia, succession planning should be aligned with corporate, investment, and land law from the outset.
Prasetyo Law Office
Prasetyo Law Office is a Jakarta-based law firm providing integrated legal services to clients across a broad range of matters, from commercial transactions to cross-sector litigation. With years of experience, we combine regulatory knowledge with an understanding of industry dynamics and each client’s business. We provide comprehensive legal advice and strategic solutions to help clients manage legal risk across their business challenges.
Should you require further information regarding this issue, please contact us:
Prasetyo Law Office
Infiniti Office, Indonesia Stock Exchange Building, Tower 1 Level 3 Suite 304,
Sudirman Central Business District (SCBD),
Jl. Jenderal Sudirman Kav. 52-53, South Jakarta,
DKI Jakarta, 12190
Phone : +6221 5890 5002 (ext. 105)
E-mail : info@prasetyolawoffice.com
Primary sources: Indonesian Civil Code, particularly Articles 830, 833, 874 to 875, 895 to 897, 913 to 920, and 931 to 953; Law Number 7 of 1989 concerning the Religious Courts, as last amended by Law Number 50 of 2009, particularly Article 49; Presidential Instruction Number 1 of 1991 concerning the Dissemination of the Compilation of Islamic Law, particularly Book II and Articles 194 to 195; Law Number 5 of 1960 concerning Basic Agrarian Principles, particularly Article 21; Law Number 40 of 2007 concerning Limited Liability Companies, as amended, particularly Articles 56 to 57; Articles 16 to 18 of the Algemene Bepalingen van Wetgeving; and relevant Supreme Court jurisprudence on customary inheritance law.
Disclaimer: This publication is provided for general information and educational purposes based on laws and materials available as of June 27, 2026. It is not legal advice or a formal legal opinion and must not be used as the sole basis for succession planning, estate distribution, corporate action, land transactions, regulatory reporting, or any specific dispute. Indonesian laws, jurisprudence, administrative systems, and administrative practice may change. Advice tailored to the relevant facts and verification of current requirements should be obtained before action is taken. Receipt or use of this publication does not create an advocate-client relationship.
