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BALI INFORMATION & GUIDES

VISA & PERMITS
In February 2004 Indonesia introduced a wide range of changes in the national Free Visa and Visa on Arrival system.
Free Visa on Arrival
Entering Indonesia without a visa is now only possible for nationals of 11 countries and territories below:

Brunei Darussalam, Chile, Hong Kong, Macau, Malaysia, Morocco, Peru, Philippines, Singapore, Thailand and Vietnam.
Nationals of these countries and territories will be issued with a 30-day stay permit without charge upon presentation of a valid passport with 6 months remaining validity. This stay permit cannot be extended or converted into another type of visa.

Visa on Arrival
Nationals of 52 countries below can obtain a Visa on Arrival, processed at the gate of entry following the payment of an official fee:

Argentina, Australia, Austria, Bahrain, Belgium, Brazil, Bulgaria, Cambodia, Canada, Cyprus, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Iran, Ireland, Italy, Japan, Kuwait, Laos, Liechtenstein, Luxembourg, Maldives, Malta, Mexico, Monaco, New Zealand, Norway, Oman, People’s Republic of China, Poland, Portugal, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Spain, Switzerland, Sweden, Suriname, Taiwan, The Netherlands, United Arab Emirates, United Kingdom, United States of America.
Visa on Arrival may only be extended upon approval from the Director General of Immigration of the Republic of Indonesia in case of natural disaster, illness or accident, but cannot be transferred to another type of visa. Overstay visitors will incur financial penalties and in some cases up to 5 years in prison.
Citizens of countries not included on a Free Visa or Visa on Arrival lists must apply for a visa overseas before arriving in Indonesia.

Nationals of ALL countries planning to stay for more than 30 days in Indonesia have to apply for the appropriate visa (tourist, business, social-cultural) at an overseas Indonesian Consulate or Foreign Mission before departing for Indonesia.

It is always wise to check with the Indonesian embassy in your home country for current visa regulations.

BUYERS’ GUIDE
INVESTMENT IN INDONESIA
With the emergence of foreign investment and business in Indonesia, many foreign investors need land for buildings for their company. However Indonesian Land Law is quite different to the laws that apply in most other countries. The Act No. 5 of 1960 is the basic law applicable in Indonesia regarding rights over land ownership. With this law, only Indonesian citizens are allowed to own land in Indonesia with freehold title. Foreigners who wish to use or purchase land for whatever purpose need to be aware of these facts and not assume that the legal conventions that apply in their home countries would necessarily apply in Indonesia.

According to the current legislation, foreign investors who want to establish their business in Indonesia can obtain building or land by forming a PMA (Foreign Investment Company) and then obtaining one of the following land rights:

Building Right on Land ( Hak Guna Bangunan – HGB)
The right to build and possess a structure on land owned by others: the duration of right for building is a maximum 30 years, extendible for 20 years (article 30 Act No. by 5/1960). Those who may obtain the right to build deeds are Indonesian citizens and legal entities (such as a PT (limited liability company) established under Indonesian Law and domiciled in Indonesia, either for 100 percent foreign-owned, joint venture or 100 percent Indonesian-owned companies.

Right of Use ( Hak Pakai)
This is the right to use and/or harvest from land directly owned by the estate (rendered by authorized official government deed), or private land (by agreement with the owner of the land). This may be applied to land for use as a building site or for agricultural purposes. The transfer of this right must have local government authorization.

Right of Lease of Building ( Hak Sewa)
A person or Indonesian legal entity has rights to lease another’s land. This right belongs to Indonesian citizens, foreigners, and legal entities (such as PT/limited liability companies) established under Indonesian Law and domiciled in Indonesia or the representative office from a foreign legal entity. The leasee and the lessor can make an agreement regarding these rights.

Purchasing properties (Strata title, Convertible Lease Agreement or indirect purchase)
By the Indonesian Law, a foreigner cannot own land in Indonesia but purchasing an apartment or office space is possible through a strata title deed. The 1996 regulation (No. 41/1996) states that an expatriate who resides in Indonesia or visits the country regularly for business purposes can purchase a house, apartment or condominium, as long as it is not a government subsidized development. The title is only for right of use.

Regulation No. 41/1996 and its implementation as Hak Pakai title is still somewhat unclear in Bali and is not recommended by most lawyers and Notaries in Bali.

Hak Guna Bangunan vs Hak Milik (Freehold title)
Hak Guna Bangunan is only the right to use a building for a fixed period of time, which then has to be extended. The owner of Hak Guna Bangunan land is the Indonesian government. Meanwhile, with Hak Milik title you do actually own the land or the building. Hak Milik does not need to be extended.

Indirect ownership
This system involves an Indonesian citizen acting as the official owner of the property. Foreigner’s interests are protected in a number of ways by agreements made with the Indonesian. The combined effect of the various agreements with the Indonesian will clearly show that the Indonesian has no financial or possessory interest in the property and that the foreigner is the beneficial owner. This arrangement is strictly based on a loan arrangement with the Indonesian.

Recommendation
It is recommended that before making any property purchase or signing any property agreements, foreigners should consult bona fide lawyers who are experts in Indonesian property ownership to understand the legal status of the ownership and prevent and future regrets. It is also important that when you purchase a property, you address tax issues such as payment of PPN or Construction Tax as to who is responsible to pay and the provision of proof of payments.

Austrindo Law Office, our preferred legal adviser in Bali, has provided this guide.

Austrindo Law Office
Jl. ByPass Ngurah Rai 2001
Simpang Dewa Ruci
Kuta – Bali 80361
Indonesia
Phone: 62 361 847 33 40
Facsimile: 62 361 759 605
They have English speaking staff who can give responsible advice.
Contact person: Ary Johnson or Dessy Widyantari, SH