Can foreigner buy land & build house in own name?

This will sort you out

https://www.expat.com/forum/viewtopic.php?id=293005

Thank you for that reply.
I had a look through the info on the link.
But I could not find anything referring to building a house in Indonesia; just info on visas.

Does anyone have specific info or links to info so I can check out the formalities needed.
Many thanks

I have checked some other posts - and it seems that foreigners can not own land / property.
Unless married to an Indonesian with a prenup.
But I didn't think a Christian foreigner can legally marry an Indonesian of different faith?   
So pre-nup or not, I don't think owning property with a spouse would work, would it?

But - if somehow a foreigner can legally marry an Indonesian, possibly with a prenup, and then divorces - can the property belong 100% to the foreigner?   Or it still can not be theirs because they are not Indonesian and no longer married to an Indonesian either....??  Does it automatically transfer to the ex (Indonesian)?

I am confused by this situation.
Can anyone throw some light on it, please???

Foreigners can not own land here, even though you are legally married and have a prenup

If you're married, all property is owned 50/50.
Therefore, to own land, it has to be in your spouse's name and you must have a prenup saying you have no ownership of that land.

Get the idea of "buying" land in Bali out of your mind.  Think lease, and only lease.

So......to further this topic....

I have 2 young children, not in Indonesia.  Their dad built a house in Indonesia and had land for business use.
He just died.
I have no idea who the Indonesian partner was - but I now assume from all your answers above, that there must have been a partner...
So I am just wondering, as his heirs, does his share of the the house pass on to the children ?
He put his life and soul into Indonesia and it would be nice to think that his children could enjoy this house over future years - even if it is just vacations every now and again...
Surely, if he invested a lot of money into this property it can't just automatically all belong to someone local???
Does anyone have suggestions on their position???
Many thanks from a sad family....

Sorry to hear of your loss.

If the dad was a foreigner, and you are a foreigner, then neither you, or your kids (also obviously foreigners) have any inheritance rights on his property in Indonesia other than personal property...cars, furniture and the like. 

However, if the lease(s) made out to him also included you as joint leasee, then you would be able to continue to enjoy the lease until the established expiration stipulated in the lease.

Really?

Sounds like a good opportunity for all locals to kill their foreign partner for financial gain !!

So with this law - a foreigner can invest any amount, but lets say 100-200k euro, into land and business and upon death the other person on the "lease" inherits the lot???  Despite potentially only being a local name; not having invested any money into the land/business?
This is crazy.
So what happens if the person that loaned the money to buy the land and build the house and grow the business, wants the investment money back?   
Would the silent partner be obliged to give the money back? 
Or could a new deal be made with this local partner to pass on the share to his heirs...
I do not understand why upon death - as in most western countries I know - the assets do not pass to family.

Let me explain better.

Land in Indonesia cannot be owned by a foreigner...period.  It can only be leased.*  A lease is only binding on the specifically named leasees in that lease and rights to that lease cannot be transferred by inheritance. 

The whole point of Indonesia's land laws are to protect it from being bought up by foreigners and passed down generation to generation.  A foreigner does not have the same rights as an Indonesian, and thus cannot inherit land.  Indonesia is not like other countries...or to put it another way, Indonesia, tidak di jual...Indonesia is not for sale. 

When the lessee of a given land lease dies or abandons the lease, the lease is nullified and all land rights revert back to the Indonesian holding the land certificate (Hak Milik). 

Foreigners who have used an Indonesian nominee to purchase land in Indonesia need to be very careful to structure their lease with the new land owner for the use and right to build on that land, and include within that lease any persons that should share the right of use (wife, children, whatever).  The Indonesian nominee and land owner in whose name the land certificate (Hak Milik) is issued is under no legal obligation to return any monies the foreigner originally spent to acquire the use of that land. 

I am not clear about your personal situation, but you need to find out more about what specific arrangement and lease your late husband had, and with whom he had this lease arrangement.  Once that is established, if you or any of your kids are named in that lease as co-lessee then you have a leg to stand on and can continue to enjoy that property.  Otherwise the best you can do is to appeal to the lessor's sense of fairness and see if you can work something out.  However, that person has no legal obligations to you whatsoever if you are not specifically included in the lease as a co-leasee. 

*A PMA business (foreign investment company) which is foreign owned can own the land, but that's another issue altogether and still involves (requires) an Indonesian partner in most, but not all cases.

What was informed by Ubudian is right. Either about the lease or using Indonesian nominee. But, my advice, please be careful about it (buying/leasing land in Bali). Make it slowly and well informed. To be honest, this is a common thing in Bali. I work for a law firm which is used to handle this matter. Therefore, I ever met some of them who are less careful about this transaction. Do a meeting with credible lawyer as a first step, ask them to due diligence the land, and never give DP unless the land owner show you the freehold certificate with the name of the land owner inside.

This question comes up a million times so I'll try to make it clear.

A FOREIGNER CAN'T BUY LAND IN INDONESIA.

Utari,

I have been advocating your advice for many years...get a lawyer! 

Way too many expats are of the misconception that a notaris is sufficient, but as you well know, for foreigners, they are not enough.  Many foreigners are of the mistaken opinion that a notaris here in Indonesia is the same as an attorney.  While highly trained in the law, especially in contracts, a notaris cannot argue a case in front of a court of law on behalf of their client, but an attorney who represented the client and prepared the contract can, and in fact, is almost obligated to do so if it requires a court hearing to resolve conflicts arising from that agreement.

For many years I have seen what seems like endless cases where the "magic of Bali" was so intoxicating that simple common sense and due diligence is quickly abdicated by the foreigner in pursuit of their Nirvana and piece of the Bali dream. 

This is a real shame, because Ive seen far too many well intentioned and good hearted expats fall victim later on to their poor decisions made early on.

These days, considering the very high value of most any real estate related transactions, this need for the involvement of an attorney is even more important.

Good advice Utari!

You got the lesson, Ubudian

This question is landed on my table many times when my client read the fee I provided to them, they keep asking why there's notary fee arises on the list. Well, I need to make it clear the different between notary and lawyer. Simply, the lawyer will ensure the agreement-object (in this case: land) in relation of client's favor, and a notary will legalize the agreement between the parties.

The nessecary point in what lawyer did is to ensure the land (whether it is safe to be bought/leased, or not) by doing due diligence. The lawyer will provide you a due diligence report, and if the lawyer recommend you to buy the land, should there is any problem arises in the future then it belongs to the lawyer's responsibility. You are safe.
Things are going to be complicated, since basically foreigners can not own a land in Indonesia, but if you are really dying for that, there're options offered, BUT as I said, make it gentle and well-informed.

Anyway, if your intention wasn't for business, why don't you try to buy strata title (it is the certificate for apartment which is build on the Hak Pakai land) so it is allow foreigners to be the owner.

"You got the lesson, Ubudian"

I've been at this for a long time Utari, and I don't like lessons learned the hard way. 

"Anyway, if your intention wasn't for business, why don't you try to buy strata title (it is the certificate for apartment which is build on the Hak Pakai land) so it is allow foreigners to be the owner."

Not being clear who that comment was directed to, in my case it doesn't apply as I am on KTP.

And, in the case of the original poster, she is looking for some sort of resolution/rights to land contracted by her deceased ex-husband.

But I agree totally in that a Hak Pakai (which does encumber the Hak Milik) is the only way for foreigners to go and still have some legal rights.

It is for public information actually, but the last paragraph is belong to HP Mum (in case she wants to buy the house).

"It is for public information actually..."

Mengerti, and selamat lagi.

Good information you provided, and not often expressed by Indonesians who can operate very well with a notaris and adat "law".

I have not read all the earlier responses but from what I have always been told an expat cannot own "land and such a house on said land"!  I am pretty sure that an expat can own an apartment/condo since one does not own the land under it.

Having said that, I think an expat can indirectly own/control land and house thru a foreign investment company referred to as a PMA/PT.  Depending on the type of company/business activities the PMA company is registered to do, dictates what %ownership of the company is possible.  Setting up a PMA company is not too difficult or cost prohibitive especially if one is thinking of buying land and building a house.  The land with the house ownership would be held by the PMA company which could be under the control and equity ownership of the primary % equity owner of the PMA.  Need additional info on setting up a legla PMA/PT company let me know!  I went thru the entire process about a year and half ago so still pretty fresh on my mind.

Bali Land Titles are pretty complex

Here's a summary of the situation actually ;

According to the Indonesian Agrarian Law theres five major types of land rights.

1) Hak Milik (Freehold)

This is the preeminent land title and only Indonesian citizens have access to Hak Milik (Freehold). Indonesian Government does not recognise rights of beneficial land ownership . The only exception to this law occurs when a foreigner marries an Indonesian citizen and have concluded a Separation of Assets agreement entered in force prior to registration of the marriage. In that case, the Indonesian spouse may hold Hak Milik (freehold) title.

2) Hak Pakai (Right of Use)

This land title is issued by land offices and may be delivered to a private owner or a State ownership. This title gives rights to use and develop Bali land. Once the certificate is issued, it has precedent over any other title related to the property. For foreigners who wants a property on their name in Indonesia and planned to live there, Hak Pakai agreement is an option. Such land title doesnt prevent people from holding properties in other countries nor from travelling but requires them to spend a significant time residing in Indonesia. However, a foreigner may only has one Hak Pakai title to its name.

3) Hak Sewa (Leasehold)

For a foreigner unsecured with a nominee arrangement, there are other legal structures allowing a foreign to occupy land in Indonesia. Land or property can be rented and returned to the local owner after expiration of the lease term. Partnerships with Indonesian citizens are not required in
leasehold transactions. Indonesian Constitution and the basic Agrarian law (UU5/1960) have put forward a measure which technically constraint possession of lands by foreigners through a notarised lease, to no longer than 25 years. However, its common practice in Bali to have two leases of 25 years each with a 25-year option on the second lease, effectively providing 75 years lease term.

4) Hak Guna Bangunan (HGB)

This land title gives the right to construct a building on land for 20 to 30 years. It could be renew for another 20 years. HGB can be exchanged, sold, mortgaged or transferred. Any corporate structure can hold a HGB whether its a government approved PMA company or a local company.

5) Hak Sewa Bangunan (HSB)  The Right to Rent

This land title allows the right to use land owned by another private party (the lessor) for eventually building. The right cant be registered at the land office and therefore does not formally exist in certificate form. The law doesnt set any period for this type of lease agreement and whether this can be transferred, or not, depends on what was originally negotiated and agreed between the parties.

WARNING

These land titles are not necessarily endorsed by Indonesias national government but the structure explained above has become generally accepted and used by foreigners for many years past. In all cases its recommended to consult a notary.

Intan Goyana and Bali Radar Team

Only one change I would suggest, and that's to change this:

" In all cases its recommended to consult a notary."

To this:

" In all cases its recommended to consult an attorney."

A notaris is fine in almost any transaction Indonesian to Indonesian, but with foreigners it is essential to engage an attorney.

Thank you Ubudian for the feed back.

Thank you for all these feedbacks.
Very informative

So - I guess the important next step for us - is to find out how he built the house and ran a business from the land.   
In other words, which vehicle he used:
a Hak Milik (freehold) , Hak Pakai (Right of Use), Hak Sewa (Leasehold), Hak Guna Bangunan (HGB) or  Hak Sewa Bangunan (HSB) (The Right to Rent).

I assume that he would have had to follow strict legal protocol on any of these ?
And thus would probably have used a local lawyer/attorney/notary ?

So would I check via the embassy?

When we are ready to deal with this would we be best to travel to Indonesia and then find a local lawyer etc to help us find out the details??   
Or should we appoint a lawyer now so it could all be discovered before we travel to Indonesia ?
Are there many bi-lingual lawyers, expert in foreign rights/local rights ??

We are not intending to travel now, but maybe at some point over the next year ....

Thank you all so much

Be very cautious in dealing with attorneys and notaris in Indonesia.  Best to come first to Indonesia and discuss these matters with your embassy.  Not sure how good the different embassies are to help their countrymen and women, but at least it would be a good starting point.  This blog is a good place to get some general advise but one should move very cautiously with whatever someone might over here.

Good luck!

Forget using your embassy or consulate here.  They wouldn't know anything about what your husband did regarding his house or business as they dont factor in with those issues.

"I assume that he would have had to follow strict legal protocol on any of these ?"

I wouldn't necessarily assume that.  Maybe he did, and maybe he didn't. 

"When we are ready to deal with this would we be best to travel to Indonesia and then find a local lawyer etc. to help us find out the details??  Or should we appoint a lawyer now so it could all be discovered before we travel to Indonesia?"

Hiring an attorney before coming to Indonesia might well save you the expense of coming here unless you have plans to come to Bali anyway. 

Do a Google "Lawyers in Bali" and contact a few by e-mail.  Try to find a lawyer closest to where your husband's house/business is located, otherwise youll be paying for a lot of travel costs by the attorney and or his staff.

Also, if youre going to do anything, do it sooner than later.  You can bet that house isn't unoccupied now, so the longer you wait, the worse it will get.

Yes.
You are correct.
Best to be cautious.
Would not want the land/house to disappear before we even find it !!!

Hey,  can you share your experiences,  to der up a PMA?
I like start a little business  and planning to set up a PMA.

If you're serious about setting up a PMA in Bali then you are absolutely going to need an attorney.

Try Peter Johnson (he's Australian), he's been here a long time and many of my Ozzie friends that have used him were satisfied. 

http://www.austrindo.com/

well u marry yer pre-nup gives it to her as a westerner u have no right..even if married..stupid laws..and if u turn Muslum it gets deeper..lol.the only way out in divorce is to get her to divorce u giving the mahr back to u.very stupid old laws.nothing is in your name...even a nominee is illegal.but put up with mostly.

peter johnson is a ripp off..stay clear..

bundyrum wrote:

peter johnson is a ripp off..stay clear..

If you make allegations, link to evidence that supports your assertion.
I would say it's generally better to avoid making such statements as Indonesian law can be pretty harsh but, if you do, provide the links and be subtle.

http://www.andrew-drummond.com/2012/07/ … le-on.htmlhttp://www.opentrial.info/index.php?title=Butler

mas fred wrote:

bundyrum wrote:

peter johnson is a ripp off..stay clear..

If you make allegations, link to evidence that supports your assertion.
I would say it's generally better to avoid making such statements as Indonesian law can be pretty harsh but, if you do, provide the links and be subtle.

http://www.andrew-drummond.com/2012/07/ … le-on.htmlhttp://www.opentrial.info/index.php?title=Butler

Very interesting links......

well he took my land certificate...when i asked for it back the staff tried to give me a photocopy..and keep my original...
if he's yer mate good luck but don't recommend him..as other aussies will tell u..u obviously don't know him..so mas fred u haven't
asked around much..

Just a few points...

While I've never used Peter myself, I know several Australians who have, and with no problems. 

As for the land certificate (Hak Milik) not being in your hands bundyrum, that's not so unusual as after all, it isn't your name on the Hak Milik that is shown as the land owner.

@ ubudian: yu seems yu know everything at first, but after a while i dont konw what to think. Yu even tried to give us link to anex lawyer who already has been involved with fraud and justice problems.

You're replying to a post I made just shy of five years ago. 

You should at least try to understand that the recommendations I made at that time would not necessarily be the same today.