What is the procedure for foreigners who want to invest in Indonesia?
The world today is in the era of globalization and the era of free trade. Many countries open up and provide access/opportunities for investors from abroad to invest their capital.
Establishing cooperative relations between nations/states, both institutional/organizational/individual is certainly very good. Because there is a spirit of togetherness, unity, harmony, humanity and welfare. And it should always contain elements of mutual benefit and justice.
In terms of ownership of assets/property by foreigners, each country must have prepared legal procedures. The goal is to not only guarantee the official ownership, is also to be able to run their business safely and comfortably. On the other hand, it is also to protect land and state assets, to sort out which ones are allowed or not allowed to be owned by foreigners, so it is very necessary to make laws and regulations.
The parties involved in the formal management of these legal documents are usually notaries, legal experts, developers or property owners, land/agrarian services, immigration, etc. All of those who are related must understand well the local legal system that will be the location of investment. And must be able to explain it perfectly. There should be absolutely no element of “looking for shortcuts that will harm certain parties”. Especially if the client/partner/relative/consumer/seller/buyer/etc do not understand the legal basis in detail.
In Indonesia, it has often been reported in various media that foreigners are allowed to own assets/property. Including types and limitations. This is normal in any country, because without restrictions, a region/island/country can change ownership to a foreigner. The regulations are contained in Government Regulation (PP = Peraturan Pemerintah) Number 103 issued at the end of December 2015. What and how are the rules and limitations that need to be underlined, and known to all related parties?
Following reviews from property agents is quite popular in Indonesia. The requirements that must be met are:
1. Foreigners may only own Property with a Right of Use Certificate [NOT PROPERTY CERTIFICATE].
This Right of Use Certificate is valid for 30 years. Later, if the validity period expires, it can still be extended for another 20 years, and can still be extended again for a 3rd period for 30 years, so that the total Right of Use is 80 years.
2. Have a KITAS.
KITAS stands for Kartu Izin Tinggal Terbatas [Limited Stay Permit Card]. This certificate is issued by the Ministry of Law and Human Rights. To be able to get a KITAS, a foreigner must first reside in Indonesia, then it must be registered in the records of the Immigration Service. KITAS must be renewed every 2 years.
3. Only Landed Houses and Apartments
What are Landed houses and Apartments?. Broadly speaking, a Tapak house is a house built on land directly, so that the owner can freely use his land area. And apartments or flats are multi-storey houses, so the owner does not have land rights, because the land belongs to all residents of the apartment.
Especially for foreigners who want to own a landed house/apartment, then there are laws that regulate it. From the reviews by Harian Bisnis Indonesia and Warta Ekonomi, we understand that foreigners can have landed houses and apartment houses, but there are limits on the area, and minimum price limits that must be adhered to, and each province has its own standards. This can be seen in the Ministerial Regulation Regulation 18/2021 Article 185 and Article 186
Can foreigners own property with PROPERTY CERTIFICATE? . As long as the writing is taken from various sources, no explanation has been found. Maybe there is no legal basis. Because Indonesian land belongs to Indonesian citizens. The solution?. Foreigners must first become Indonesian citizens.
That’s a summary taken from various sources. Foreigners can have a total RIGHT of USE for 80 years. If you want to get PROPRIETARY RIGHTS immediately, then a foreigner must become an Indonesian citizen.
If by chance there is a legal expert who understands this, and wants to correct/complete it, they are welcome.
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The author is not a legal expert, only writes based on references, intended for a best friend of mine. Hopefully useful for other readers.