01. Establish a PT PMA (Perseroan Terbatas Penanaman Modal Asing):
- A PT PMA is a foreign-owned limited liability company. This is the most common legal structure used by foreigners to acquire property rights in Indonesia, including Bali.
- The process involves registering the company with the Indonesian Investment Coordinating Board (BKPM). This process can be complex and often requires the assistance of a local notary or legal expert.
- Key considerations include:
- Company name and business activities
- Capital requirements
- Shareholder structure
- Company domicile
- Obtaining necessary business licenses
- Setting up a PT PMA can take several weeks to a few months, depending on the complexity and completeness of the documentation.
02. Obtain an Indonesian Tax ID (NPWP):
- An NPWP is a tax identification number that is mandatory for any legal or financial transaction in Indonesia, including property acquisition.
- This is obtained from the local tax office (Kantor Pelayanan Pajak).
- Required documents typically include:
- PT PMA establishment documents
- Passport of the company director
- Other supporting documents as required by the tax office
03. Determine the Property Rights:
- It’s crucial to understand that foreigners cannot own freehold land (Hak Milik) in Indonesia. The most common ways for foreigners to acquire property rights are through:
- Hak Pakai (Right to Use): This grants the right to use the land for a specific purpose for a set period, usually extendable.
- Hak Guna Bangunan (Right to Build): This grants the right to construct and own buildings on the land for a specific period, also usually extendable.
- The duration and extension possibilities of these rights can vary, so it’s essential to clarify these details with a legal professional.
04. Find a Property and Conduct Due Diligence:
- Finding a Property:
- Engage a reputable real estate agent with experience in dealing with foreign clients. They can help navigate the local market, find suitable properties, and assist with negotiations.
- Online property portals, local listings, and personal networks can also be valuable resources.
- Due Diligence: This is a critical step to avoid potential legal issues and financial losses. It involves:
- Verifying the Seller’s Legal Standing: Ensure the seller has the legal right to sell the property.
- Checking the Property Title: Verify the validity of the land certificate (Sertifikat) at the Land Office (Badan Pertanahan Nasional or BPN) and ensure there are no encumbrances, disputes, or outstanding debts on the property.
- Inspecting the Property: Conduct a physical inspection of the property to assess its condition and ensure it matches the description.
- Zoning Regulations: Check the local zoning regulations to ensure the intended use of the property is permitted.
- Environmental Permits: If planning to build or renovate, check for necessary environmental permits.
05. Negotiate and Sign a Sales Agreement (Akta Jual Beli):
- The Sales Agreement is a legally binding contract that outlines the terms and conditions of the property transaction.
- Key elements of the agreement include:
- Property details
- Purchase price and payment terms
- Transfer of ownership timeline
- Rights and obligations of both parties
- Conditions for termination or cancellation
- It’s highly recommended to have a legal professional draft or review the agreement to protect your interests. The signing of the Akta Jual Beli must be done in front of a Public Notary (Pejabat Pembuat Akta Tanah or PPAT).
06. Obtain Necessary Approvals and Permits:
- Depending on the property and your intended use, you may need to obtain additional approvals and permits.
- This could include:
- Building Permits (Izin Mendirikan Bangunan or IMB) if you plan to construct or renovate.
- Location Permits
- Environmental Impact Assessments (AMDAL) for certain types of development.
- Navigating the permitting process can be complex and time-consuming, often requiring coordination with various local government agencies.
07. Finalize the Purchase and Register the Title:
- The final step involves:
- Making the final payment to the seller as per the Sales Agreement.
- Transferring the property title to your PT PMA. This is done through a deed of transfer at the Land Office (BPN).
- Registering the title transfer with the BPN to officially recognize your PT PMA’s rights to the property.
Ensure all taxes related to the transaction are paid, including the Buyer’s Acquisition Duty on Land and Building (Bea Perolehan Hak atas Tanah dan Bangunan or BPHTB)
It’s crucial to reiterate that Indonesian property law is complex and can be subject to change. Seeking professional guidance from a qualified legal expert specializing in property law is highly recommended throughout this process. CONSULT TO THE LOCAL NOTARY to get more details informarion.
