What investors should know about Kalimantan

Kalimantan is the Indonesian part of Borneo. It covers about 73% of the island, which it shares with the Malaysian states of Sabah and Sarawak and with Brunei. It’s large and thinly settled, and its economy is built on land: plantations, mines, timber concessions and the cities that serve them.

That’s why real-asset deals here are usually decided by the ground under the asset. Who holds the land, on what title, whether it sits in a forest area, who else claims it and how far it is from a port: these checks take longer than the price talks, and most of the risk sits there.

Five provinces, one island

Indonesian Borneo has five provinces: West, Central, South, East and North Kalimantan. North Kalimantan is the youngest. Law 20 of 2012 split it from East Kalimantan, with its capital at Tanjung Selor. South Kalimantan’s capital moved from Banjarmasin to Banjarbaru under Law 8 of 2022, though Banjarmasin is still the province’s main port and trading city. East Kalimantan is where the new national capital, Nusantara, is being built between Balikpapan and Samarinda.

Each province has its own government and spatial plan, and much of a project’s paperwork is handled at district level, so rules and timelines vary. The comparison of the five provinces sets out the capital, economic base, gateways and main sectors of each.

What the economy runs on

The economy runs on what can be grown, dug or pumped, and on the trade that moves it.

• Oil palm and other plantation crops. The agriculture ministry counts Central, West and East Kalimantan among Indonesia’s main oil palm centres.
• Coal, mined mainly in East and South Kalimantan, with more along the Barito river in Central Kalimantan. In East Kalimantan, mining and quarrying made up 34.11% of the regional economy in the second quarter of 2025, and coal was 76.54% of the province’s exports in July 2025, according to the finance ministry’s regional treasury office.
• Oil and gas, mostly in East Kalimantan: the fields of the Mahakam delta, the LNG plant at Bontang and Pertamina’s refinery at Balikpapan.
• Timber from natural forest and plantation forest concessions.
• Gold, from a few licensed mines and a much larger number of small, often unlicensed digs, especially in West and Central Kalimantan.
• Trade, transport and services in the cities.

When coal or palm oil prices fall, the whole provincial economy feels it, property included, and neither price is set in Kalimantan.

Where real-asset deals happen

Property deals are mostly in the bigger cities (Balikpapan, Samarinda, Banjarmasin, Banjarbaru and Pontianak), with smaller markets in Palangka Raya and Tarakan. City plots are more often registered than rural ones, which makes checks faster. A foreigner still can’t hold freehold, so the title has to fit the buyer.

Oil palm deals are often purchases of existing estates, or of shares in the companies that hold them. Opening new land is harder. Presidential Instruction 5 of 2019 halted new licences in primary natural forest and peatland, with some exceptions, and much of the remaining open land is already licensed, claimed by a community or inside a designated forest area.

Coal and gold deals usually mean buying into a company that already holds a mining business licence (Izin Usaha Pertambangan, IUP). Since Law 3 of 2020 amended the Mining Law (Law 4 of 2009), the central government issues these licences, not provinces or districts. A transfer of shares in a licence holder needs ministry approval.

The frictions that decide a deal

The first is the title. A lot of rural land is held only on a land letter (Surat Keterangan Tanah, SKT) signed by a village or sub-district head, not on a certificate registered at the land office. A letter is evidence of a claim, not a title, and two letters can cover the same plot. Registered titles differ in who can hold them and for how long, as the guide to Indonesian land rights explains.

The second is forest status. Land can carry a certificate or a plantation licence and still sit inside a designated forest area (kawasan hutan). Planting there needs the land released from the forest estate, and mining needs a forest-use approval. In 2025 a government task force began taking over oil palm plantations it found inside forest areas. Checking forest status belongs at the start of any land deal.

The third is people. Many communities, including Dayak communities, hold land under customary law that no certificate shows. A title doesn’t end a dispute with a village that never agreed to the deal, and many plantation and mine conflicts start there.

The fourth is distance. Rivers still carry much of the freight, and low water in the dry season can stop the barges. In the 2026 dry season, parts of the upper Barito became too shallow for coal barges, and others could only run part-loaded. An estate or a deposit that looks cheap on a map can be expensive to reach.

The fifth is the partner. Most deals need a local partner who knows the land office, the village heads and the district government. The risk starts when the partner holds the land or the shares in their own name on your behalf. Indonesian law voids those nominee arrangements, and the person named on the title or the share register is the one the law recognises.

Where to start

• Decide the vehicle before the asset. A foreigner can hold a right of use (Hak Pakai) on a house, but estates, mining licences and most commercial land need an Indonesian company, which for foreign capital means a foreign-owned company (PT PMA). Check first that your business line is open to foreign capital.
• Check the land before any money moves. That means the certificate check at the land office (usually done through the land deed official, Pejabat Pembuat Akta Tanah or PPAT), the forest-area map, the district spatial plan and the people who live on or use the land.
• Visit the site, in the dry season too if it depends on river transport, and talk to the village head as well as the seller.
• Plan in months, not weeks. The government’s online licensing system (Online Single Submission, OSS) issues low-risk approvals quickly, but land work, environmental approval and sector licences take longer.
• Keep a clean record of the money you bring in, from the first transfer. It makes moving dividends or sale proceeds out much simpler later.