Can anyone give me info on buying land in Indonesia?

It's simple: you buy in the name of an Indonesian. Then they keep everything for themselves and you've got nothing to say.

It's inevitable, and don't come complaining afterward.

With a decent notary, there are legal protections (in particular, the foreigner holds the original property titles, which, while not in their name, mean the local can't do anything without them. In theory, of course). Still, I’m aware the risk isn’t zero, which is why I’m investing a minimal amount. The problem is I’m struggling to find a notary—most turn me away because the amount is too small to interest them. The only one willing is asking for 25% of the land price, which is huge.

Why do you say that—have you had a bad experience?

Like in many countries, foreigners can't buy "land" outright... 🤪 From there, all the more or less legal or "legalized" tricks and workarounds will inevitably lead to disappointment at some point... In short: When you bend the law, don’t expect it to protect you on top of that 😉

When you bend the law, don’t expect its protection on top of that 😉

Brilliant!

All shady lawyers (and notaries) should be forced to display this sentence outside their offices!

Thanks Dear Master.....

hi

I know the risks, thanks. What I'm really asking is how much it costs, especially the fees you don't expect.

thanks

Hi Citoyendumonde (soon to be citoyenindonésien, I hope!)

I followed your Indonesian adventures with interest. Really fascinating and full of discoveries... I spent two months in Indonesia last year and looked into land and real estate quite a bit... (through my job but also thanks to a local contact!)

To answer your specific questions about fees: Notary: 1% - 1.5% of the transaction value. Tax: Both seller and buyer pay a 5% tax on the value of the land and property sales. Mortgage certificate: 2% of the mortgage value.

As everywhere, the notary’s fee is negotiable, but it’s often around 5% when a middleman is involved! All this should be handled carefully with your "Indonesian landlord."

I won’t get into property duration and certificates—you probably already know about that...

Which island are you planning to buy on?

Feel free to ask if you have more questions. I have a contact there for land purchases—I’ll ask them about a notary in Lombok just in case...

Cheers...

.....and make sure you can build on the land (if you want to build a house, of course...). Some plots aren't zoned for construction....

hi

Thanks, you confirm the numbers I’d read. I think for me the notary’s “5% package” might end up higher than the usual percentage since my purchase is for such a small amount (it’s really rare to be able to buy just one hectare—parcels here are huge).

For the duration, I’ve calculated I’ve got a good fifty years left at most, so we’re on track if I renew once . Anyway, I’m not especially looking to OWN something, just somewhere to take it easy when I’m fed up (though I’m already fed up, but let’s not get sidetracked). I’ve worked out that the total cost of my investment shouldn’t exceed 2 or 3 years’ rent in France... That’s what I’d lose if I get ripped off. My parents struggle to understand that you’re never really an owner over there, and even less so for life, but I’m already paying 7000 € in rent per year here (not including utilities), so it comes down to the same thing—cheaper, warmer, and more human.

I’m planning to buy in Lombok, in a small village. No foreigners are settled there except for one guy from the Emirates who’s doing business. The village economy is thriving, and people aren’t in need—I think that’s an important factor to consider as a non-Muslim foreigner settling among them.

But there’s one thing I don’t get: is there an annual tax to pay? Apparently, it’s a small amount, but on an English forum, I saw an Australian who got hit with a crazy bill for his villa, which is far from luxurious. I expect I’ll have to pay some kind of pseudo-tax to the village chief—fair enough—but I don’t know about the government.

If you’ve got any info on that, I’d love to hear it.

Thanks again, future neighbor (Inshallah 😉)

yes, thanks! I also need to clear up a little ambiguity about the road to access the land—I can’t just settle for a simple "ndai cambai cambai" (="no problem" in Sasak...)

Hi, we bought in Bali last year, and if I can give you one piece of advice, it’s to handle the paperwork with a lawyer + notary—you’ll avoid a lot of problems that way. Before buying, you need to check a ton of things, like access: does the landowner actually have the right of way, and is it stated that they’re granting you permission? If it’s buildable land, you’ll need a mandatory IMB to construct. You should also verify the land certificate (proof of ownership). Take your time and double-check everything. For us, no issues—we’re finishing up our construction this week, and everything’s going smoothly!!!! Well, I think so, anyway. Good luck

hi Thanks so much, I’ll keep that in mind! Can the notary handle all of this, or do I need to go to a bunch of different offices? What’s an IMB—I haven’t heard about that yet... I’ll be there for about 4 weeks to get everything done.

Thanks!

be careful in Indonesia!!!!! contact Greg, he's an expat in Bali, he found a good business lawyer oui2oui@yahoo.fr good luck!!!!!!!!!

Sick and tired of these self-righteous, holier-than-thou French know-it-alls who love to lecture and moralize with their little rants. The inevitable result of this kind of response is that you’ll never move your ass—except to go rehash the world’s problems at the local bar, hiding behind your beer and your bitter little certainties.

Hi, Citoyendumonde,

When I was working in Lombok, the issue of land ownership had been resolved by my predecessor: the landholding company was 51% owned by an Indonesian bank. The landholding company had set up a long-term lease (emphyteutic lease) with the operating company. That wouldn’t work in your case.

I read this article a few months ago and thought I’d share it with you below.

Best,

Giles

Buying Land in Bali: The Famous Freehold

After discussing the lease of undeveloped land (see *La Gazette de Bali* No. 33 – February 2008), let’s take a look this month at purchasing land as an individual. Indonesian law states that "only an Indonesian national can acquire full ownership of land." The 1996 property law further limits property transfers to 25-year renewable terms. As a result, to better understand the legal techniques in place, let’s set aside the notions of "property transfer" and "purchase deed" as we culturally understand them. So, if you’re considering buying land, you have two options—regardless of your visa type: purchasing through a nominee or buying in your own name. The first option is commonly called "Hak milik," or property ownership with a nominee. "Hak milik" requires you to partner with an Indonesian national who legally acts as your nominee. This person signs the purchase deed at the notary’s office in your presence, on your behalf and for your benefit. Legal professionals have developed a range of documents to maximize transaction security. One of the most common methods involves a lease: the nominee leases the land to you for a 25-year renewable term and grants you full authority upfront. A mortgage in your favor ensures no transactions can occur without your prior knowledge. Some notaries also draft wills, naming you as the heir. Note that this transaction is subject to a tax based on the land’s value as determined by authorities. Also, the title bears the nominee’s name, and this purchase is legally valid for a set duration. This method is favored by the majority of foreigners who have lived in Bali for many years. It’s true that the practice is now common, and notaries are well-versed in the legal techniques to secure the transaction as much as possible. The second option, called "Hak pakai," introduced in 2004, grants you a right to use the land you purchase, similar to concessions found in Latin America. It results in a certificate issued in your name, regardless of your visa type. In theory, it only applies to land no larger than 20 ares (about 2,000 square meters). In reality, this varies depending on the region where the land is located. Moreover, "Hak pakai" isn’t recognized everywhere in Bali. Land acquired under this status must be for private use—meaning the construction of a residence—and the title is unique, so you can’t hold multiple plots simultaneously. As for the duration of this right and the associated tax, opinions and practices differ. In some places, you can obtain a 25-year renewable title, while elsewhere, the title is only valid for 25 years, and renewal requires another notarial act. Some assume renewal is guaranteed, while others see it as uncertain. Regarding the tax, theoretically based on the land’s market value at renewal, its amount isn’t predetermined, leaving things unclear. In summary, "freehold" is like a bronze statue with feet of clay. No one is a prophet in their own land, and here, no one truly owns land in a foreign country. But let’s not be cynical... Marie Michel

Every month, send your questions to our Indonesian law expert at info@lagazettedebali.info

Hey Gilles!

Thanks! The only issue, if I’m not mistaken, is that setting up a **PMA** (foreign-owned company) is really expensive—not just to create, but then you’re heavily taxed afterward. That solution works well for a relatively big business (like a hotel), but the area where I’m buying is way off the beaten path and won’t attract crowds... plus, that’s not my goal anyway 😉 I’m not ruling out creating a PMA if Lombok’s new international airport turns it into the "next Bali"... but I don’t exactly *want* that either, at least not to that extent.

So, I’ve been thinking (and I’ve also talked a lot with an Australian who lives there). The problem is simple: a foreigner owning land in Indonesia is technically illegal. The workaround is to tolerate the common practice of using a local nominee, the famous *Hak milik*. Then, a whole legal package (fake lease contracts, debt acknowledgments—I think there are a dozen or so...) is more or less sold by notaries to "secure" things a bit... and, of course, to bill you nicely for their services! But when you think about it, if things go south, I wonder how—despite all these protections—I could enforce my rights, since I’d still be in an illegal situation... in the most corrupt country in the world. I think it all comes down to trusting your nominee.

So, in my mind, it’s still super risky no matter what anyone says. I’ll invest proportionally to the risk and go with my gut. I’ll still have Rumaji sign all or part of this legal arsenal—not to feel protected, but just to test him psychologically. If a Sasak signs a debt acknowledgment without blinking, I can trust him, right? If I see him hesitate, then I’ll hesitate too, and the project might be reconsidered. I’m trying to put myself in their shoes and think like them... Before anything else, I’ll go see the village chief to immediately set the amount he’ll extort from me every year (so I don’t get any nasty surprises later).

Basically, in my head, it’s like this: either tourism stays low, in which case I’ll build my simple little house for later, take my time, and rent it out occasionally via my website (which is easy to find on Google). Rumaji will collect the rent, so he’ll get a little richer and won’t be tempted to scam me (or be convinced to scam me—that’s what I’m really afraid of). But that means I’d have to keep living in France 😐 because I can’t make a living in Lombok just by renting out a place now and then... And if Rumaji wants to build 3-4 bungalows (like he dreams of) on part of the land, I’ll "lend" him a piece (with 1 hectare, there’s plenty of space). Or, if tourism grows with the airport, Rumaji and I create a PMA, the land and buildings go under the PMA’s name (with me as the majority shareholder), and maybe—just maybe—I’ll move there if it lets me live off it... you can dream! 🙂

In any case, my nominee needs to get at least a little richer (and preferably his family too). I think that’ll be the most effective "legal" protection against any scam temptations!

For now, I’m going with option 1: low investment (which makes even more sense since I can’t even exercise my right of use while I’m not living there). If I lose everything (15,000 € for the land and house), it’ll hurt, but I won’t be ruined. If it works out, I’ll have the dream pied-à-terre for later—for the price of a garage (or even less... a toilet!) in France (and I’ve got other ideas in my little head, but that’s another story...)

Thanks anyway, Gilles, for the info (I need to look into this *Hak pakai* thing—it’s still unclear...)

Now I don’t rule out the idea of setting up an IVF clinic if the completion of the international airport turns Lombok into the "new Bali"... but I don’t want that either, as you can imagine... at least not to that extent.

That’s the whole paradox of a tourism project! Wanting to live in a place you love while knowing that the success of your project would mean the disappearance of the very lifestyle that inspired it!

I hope your project comes to life while also hoping that "your" Lombok stays the way you love it.

Ahh Gilles, I recognize your usual wit there 😏 You’re not fundamentally wrong (wow, that pun), I’ll just "go with the flow" if there is one. And if there isn’t, I’ll just build myself a little shack—it’s not so bad either.

For now, the EMAAR project seems to be floundering... if I may say so, since there isn’t enough water (I’m on a roll tonight) 😄. Plus, if you think about security for five minutes, it’s not great either—there are still Sasak people attacking tourists with machetes (quite a few reports on the wannasurf forum).

My "tourist project" is a bit of an exaggeration for the little thing I want to do... But your word "paradox"—okay, I’ll take it 😛

Exchanging ideas or opinions doesn’t mean we can’t be polite and respectful... Best regards, Olivier

Great photo, Olivier! 🙂

if I ever lose everything (15,000 € for land and house included), it’ll hurt but I won’t be ruined

Plus, you can always rent out the bungalows you paid for to spend your holidays there They’ll definitely give you a friend’s rate 😉

For now, I’m in no rush to pay the poor guy... the notary just told me it’ll take 6 to 8 months to get the property title in proper order. I don’t care—I’m not in a hurry—but he’s gonna turn green when I tell him that.

Like many who are passionate about this part of Asia, I’ve been following your travel stories (which you tell really well, by the way ;)), especially the recent ones about buying land in Lombok. Given that the main challenge is the fact that foreigners can’t purchase land, I had this idea: why not become Indonesian? To those who are already shouting at this suggestion, I should clarify that I’m bringing it up without knowing if it’s even possible, and I totally understand that for patriotic reasons, this option might not be feasible for everyone.

Stergann

Don’t worry, I won’t scream—I’ve got a strong sense of patriotism 😉 But I think getting Indonesian citizenship isn’t straightforward... First, you’ve got to live there, which I don’t (still need to save up a bit...). And I don’t think the authorities recognize just *living* there... in your mind 😏

Keep voting to the right and don’t bother me with your comments

Insulting people seems to be a sport for you!! 1 calm down 2 think 3 talk (without insults, give it a try—you’ll see you can do it) Now you’re ready for a civilized exchange, WELL DONE!! What do you mean by

Keep voting for the right???

Do we know each other, or are you the type to talk without knowing, without understanding, without thinking??

Best regards, Olivier

Hi Loic,

Congratulations on your love for Indonesia and South Lombok in particular.

I signed up to this forum today just to give you a few extra details (and yes, it’s true—it’s my boy-scout side).

1) The nominee mechanism was well described in your thread by you and a few other members of this forum. I always use SHM (Sertifikat Hak Milik = land title deed) in the name of my nominees, with Hak Tanggungan (mortgages for five times the amount), plus two Hak Pakai (30-year and 20-year leases) whose signatures are, on paper, 15 days apart. Plus 3 or 4 other documents like the right to sell (so to change the nominee), the right to rent, etc.

2) Apart from the mortgage and the Hak Pakai, which offer you quite a bit of protection, the nominee system isn’t worth much from a legal standpoint because our nominees are simply insolvent. And all the money they receive is gone within a week. So they couldn’t care less about the legal consequences if they manage to resell our beautiful land to some Australian suckers, then to Japanese suckers, etc. The law has absolutely no hold over them.

3) In Bali, the nominee system is well known and almost tolerated by the courts because if all foreigners had to sell, land prices in the south of the island would surely collapse by 70%. In Lombok, and in Praya in particular, the courts have probably never encountered disputes of this kind. How will they react? Moreover, Lombok’s courts aren’t known for their transparency or impartiality...

4) In Indonesia, the physical SHM document, which looks like a small green school notebook, is almost proof of ownership. So don’t leave it in your hut...

Don’t forget that if our friendly nominee can’t find "their" SHM in your hut while you’re out surfing in Gerupuk (Darn, missed again!), they’ll often file a "loss" report with the police. Losing "their" SHM will allow them to get a brand-new, fresh SHM... and resell your land to the aforementioned suckers without any problem.

If you’ve taken the precaution of a Hak Tanggungan, this lovely mortgage will be noted on their shiny new SHM. (Darn, missed again!!) But you’re still in a bind because your "old" SHM is now canceled by their new SHM (you no longer have a title deed!). All you’re left with is your mortgage certificate (and the stack of other documents, now useless). It’s a standoff...

If you’ve taken the precaution of 1 or 2 Hak Pakai, even if your friendly nominee manages to sell through a mortgage lift via a shady notary or lawyer (local pleonasm), then the tenant you’ve become can still "live among their coconut trees for the rest of their days." Like in France, the lease survives transfers of ownership.

5) Generally, old expats like me recommend 3 to 10 years of intimate knowledge of the character of potential nominees before choosing one or two. The criteria of honesty and consistency of the nominee (and their family members!) are more important than the entire legal stack binding them. (By the way, their spouse(s) must sign everything too.)

I absolutely do NOT recommend taking a lawyer, notary, or land negotiator as a nominee. Nor the Indonesian wife of a European friend. Nor the original owner of the land (of course!).

6) For good reason, it’s also recommended to NEVER take a local nominee. You take a Javanese for Bali and a Balinese for Java (Lombok people are rarely taken anywhere because of their ancestral practices regarding others’ property...). By taking a nominee who lives 1,000 km away, neither they nor their family know about the beautiful land they own (which, more surely than the lottery, would suddenly make them rupiah billionaires!). And potential buyers won’t easily find the "owner" of that same coveted land. The nominee doesn’t really need to come to Lombok. But having a KTP (ID card) made for your nominee and their spouse from the Kecamatan (district) of your land is mandatory. Three days and 400,000 rupiah (40 US$) later, you’ll have the two necessary ID cards.

7) Watch out for access! Most *setapak* (customary paths) are NOT recorded in the land registry. No matter what the *Kades* (village chief) says to help the selling farmer, they have no power over this!! (It’s the responsibility of the *Bupati* = Regent of Praya). These little paths belong to other farmers! Who will soon sell them to a *Bule* (foreigner) or an Indonesian Chinese. Who will generally rush to enclose their land with an ugly wall to prevent squatting (two other local practices). And then you can’t pass anymore...

Note that there are NO notarized easements in Indonesia!! So even if you thought you had the whole village’s agreement and signed all the documents in the world granting you passage, it only takes one farmer selling to a "foreigner" for them to block the passage forever.

Two solutions, which must be finalized BEFORE the final payment for your land (afterward, everything strangely costs 5 times more!?): 1. Jointly purchase, via a second SHM, a 7-meter-wide strip of land leading to the first registered road. You can then ask other "Bule" buying in the area to reimburse part of the cost of this access (but, via your nominee, keep legal ownership anyway).

or

2. Encourage the *Camat* and *Bupati* (district chief and regent) to register the path (thus expropriating a small strip of land from the farmers) for the general interest. This is harder but mandatory if the path is really long to reach the road.

8) Watch out for unbuildable land! (Especially near the future 1,200-hectare Tanjung Aan tourist resort). The land you’re buying is *pertanian* (agricultural, at the bottom of page 4 of your future SHM), not *permukiman* (buildable) like most land in Bali. Before applying for an IMB (building permit), you’ll need to request a zoning change for the land. This is the former *Ijin prinsip*, now called *Ijin peruntukan pengunaan tanah*, ratified by an *Ijin Lokasi* from the Regent of Praya. You then have to obtain your IMB from the *Cipta Karya* of Praya within 6 months of possibly getting the *Ijin Lokasi*. Besides the 1,500 USD this requires due to your current agricultural zoning, there’s a risk that the land you love could suddenly be declared a green zone, either to please the Saracens or because your land is near a cemetery, the future hotel of a big shot, etc. As for the setback from the coast for building, it’s 30 m to 100 m from the high tide line, depending on the whim of the *Cipta Karya* official.

That’s all, folks! It still took me 75 laborious minutes to put all this together. Quick, a Bintang! (I hope all this will at least save your life, or the life of another Lombok lover.)

Don’t get discouraged! You just need to be very systematic (and very patient). As you can see in my profile, this obstacle course doesn’t prevent buying very beautiful land and even building beautiful, discreet "huts" overlooking the Indian Ocean.

Alright, I’ll give you my two cents as an old monkey who can’t be taught new tricks... you’re not actually buying the land, you’re leasing it (with a lawyer present).

Everyone’s happy except you, since you won’t get that owner’s feeling...

The owner stays the owner, but with euros in their pocket, you don’t have to worry. And since you’ll have money left over, you can build a Versailles clone...

Hi Pascal

It's really nice of you to take all this time to give me all this info—and also... to scare me a bit 😉 Especially since the photo in your avatar shows a landscape that looks a lot like mine, but phew, there’s a caption and it’s far from where I bought 😏

Well... I’m far from having taken all these precautions. Let’s just say I did things a bit backward: for now, I’ve bought a plot of land in my nominee’s name, and that’s it. Of course, there’s a bunch of paperwork we signed in front of a notary (Fikri Said in Mataram, for the record—his name comes up often as a "good guy" among expats and on the Lombok Lovers forum). For me, those papers were just to get something signed by my nominee.

I do plan to secure the deal a bit better one of these days, as long as it doesn’t cost a fortune, because I don’t really believe in legal protections in Lombok...

Actually, I’m buying in a remote area with no tourists, no accommodations, and no foreigners living there (well, except for one Australian 5 km away). On the other hand, the village’s economy is booming thanks to aquaculture, and the standard of living doubles every year. So in theory, if I add "not too many tourists" + "not too much poverty," they shouldn’t have too many bad ideas... Besides, at the notary’s office, the seller had already signed the receipt for 7000 € (the purchase price of the land) even though I hadn’t paid yet...

All this doesn’t worry me too much. But yes, I do have two unknowns to sort out: making sure my land is buildable (it used to be, since it was the site of the old village—they lived on large plots back then, and the government encouraged them to regroup into villages to better resist raiders... kind of like us in the Middle Ages!). But for now, I don’t have any documents specifying that. The other issue is access to the land: I keep hearing "no problem," but I know that’s something that bothers me—between my land and the road, there are other plots... I can always access it via the beach, but that’s not very practical 😉

I’ll continue this in a private message, and thanks for letting us know about the risks on this forum (because this kind of investment is far from safe!)

It's true that renting is a good option, but it's super hard to find land for rent. In Lombok, the Sasak prefer to sell! Plus, given the price I paid, it wasn’t really worth renting 😉

Loic, a few more public thoughts to help you finalize, as well as others like Johann:

1) For the land sale, the notary must be one from the Kabupaten. No possibility of using a notary from Mataram for Mawi or Gerupuk. It will be a notary from Praya. (Unless you pay a notary from Mataram who will have a notary from Praya do the work).

2) For the set of documents binding the nominee, it’s not regulated. We often use the same notary.

3) Yes, taxes are in principle 5% for you and 5% for the seller (who doesn’t understand anything), so it’s often 10% for you. BUT 10% of the declared value! Which is generally chosen to be slightly higher than the land value indicated on the annual tax paper SPPT. Actually, it can be 10% of 20% = 2%. If you give 10% of the total actually paid, the notary will pocket the difference😏😏. Terima kasih banyyyyaaak!

4) No, the fact that the seller signs anything, including receipts, etc., is absolutely not cool. That’s exactly the trap we all fall into, Loic! Among Westerners, a signature carries serious consequences. In Lombok, it’s absolutely not a sign of sympathy or special trust toward you. Indonesian farmers all do this! They sign anything because they couldn’t care less about legal consequences. As soon as they’re paid, they’re insolvent, and the justice system won’t put a poor Sasak fisherman or a poor Javanese farmer in prison.😕 Just remember that once you’ve paid your 10,000 €, if tomorrow someone gives them 1,000 € cash, the person could very well sign anything again...

5) You had a little shock thinking my land encroached on yours (wrongly, since all my land is between Mawun and Gerupuk). That shock is a good thing, Loic!! It proves you love this beautiful beachfront a lot... BUT if you lose it due to too much trust, it’s not just 10,000 € you’ll have lost—it’s YOUR land! A lovely little piece of your life...🙁

6) In 2010, many new roads will be built between Tana Ahu, Kuta, Selong Belanak, and Awang. With the international airport inaugurated in October 2009, I’m not at all sure your piece of beach will be safe from covetous eyes. (Unless it’s on Sumbawa Island...). So, not only will it be coveted right after 2010, but if you lose it, say in 2015, you’ll have to pay 150,000 € per hectare to buy the same land back (and which, sniff, will never be the same).🙁🙁 Because of this airport, the price of some land has multiplied by 8 (+700%) in 24 months. For example, for pure beachfront land in Ebuak, it went from 250 € per are in April 2007 to 2,000 € per are in April 2009 (1 are = 100m², like in elementary school).

7) Buildability No, being near/in a fishing village doesn’t make the land buildable! Fishermen generally don’t have an IMB (building permit). I bet you a case of large Bintang that on page 4 of your certificate, it will say "agricultural" land, like ALL of ours. But where you are, far from the tourist complex, you’re almost guaranteed to get your Ijin Prinsip and Ijin Lokasi (before your IMB).

8) Access I’m happy to have reinforced your fears. Please swallow the pill and buy yourself a strip of land up to the road. That little access will one day be worth a small fortune, and you’ll recover 100% of the cost from your Bule neighbors. Conversely, it could cost you a small fortune one day (40,000 € to pass through—it happens often!) I bet you a second case of large Bintang that you’ll pay "a bit more per m²" for that path than for the beach... If you wait until after paying for your land, it’ll already cost three times as much.😮

9) By the way, roughly check the size of your land with one-meter strides, or better yet, with a small GPS. At the equator, each minute of angle represents 1 nautical mile, or 1,852 m. So, the thousandth of a minute on the GPS represents 1.852 meters. There are sometimes "errors" of +100% made by BPN officials. You pay twice as much for your land, and that money makes a lot of people happy.

10) Yes, leasing is quite common in very touristy areas of Bali (Seminyak, Kerobokan, Sanur, Nusa Dua) and also in Phuket. For a 25-year lease, you pay about half the price of a purchase. It’s very common for small businesses and also by some older foreigners. But this doesn’t exist in South Lombok. And you’re too young to risk being kicked out just when you can finally enjoy this sunny retirement.

11) I know, I sound like an old fool giving advice like this. All my advice leans toward distrust of these poor Sasak. Besides, I’m old (I’ll soon be 50) and I’m waiting for my card from Le Pen. Objection, Your Honor! I’ve been in this beautiful country for 25 years, which I love as much as my native Brittany. I love its people and the Sasak as much as the French, Balinese, Dayaks, etc. I’ve been schooling children from 21 slums for 10 years. Not really the Le Pen profile, I think... The answer is simple: poor or rich, white or tanned, banker or fisherman, human nature is the SAME for everyone. In Brest as in Ushuaia, almost all humans will one day take easy money if you give them the opportunity for too long.😠😠 And so, for very long-term decisions, like building a little house by the Indian Ocean, you have to be extremely systematic, very patient, and not skip ANY step. It’s particularly annoying, I know. Besides, all advice is annoying. But I’m not writing to say how exceptional this coast with its karst landscapes is... Everyone already knows that.

As a result of precautions: 😎😎😎😎😎 until the end of your days...

See ya,

Buurrrrppp!! I shouldn’t have drunk those two cases of Bintang 😛😛

hi,

I’ve been following the conversations on this forum for several months now, and it’s always really interesting and helpful—so thanks to everyone who doesn’t hesitate to answer questions!

I’m looking for information on setting up a business in Indonesia (especially Lombok) since the 2007 law, which was updated by the 2007 decree. Since that law, it seems impossible to use the PMA system to create an eco-tourism company. Is it possible to use a nominee to set up the business, like you can with land? In an article from the Bali Gazette, it says that even though going through PMA is no longer an option, a local PT company is still possible for foreigners. Unfortunately, I can’t find any documents explaining the difference... If anyone can give me some info (even just a little), that’d be great!

"When you bend the law, you shouldn’t expect its protection on top of that."

Do you hold the copyright on this sentence?

A bit raw but so true!

YES! But since everything written on a forum is public, you can use it as much as you want! 😉

hi

in my opinion, it must be pretty tough, like it is in Thailand

you should really ask French people who live there (you’ll find some)

in Thailand, you can own a house but not the land but you can buy a condo (apartment in a building) as long as foreigners own a maximum of 49% of the total surface area

maybe it’s the same case in Indonesia

you should find some websites—just need to search more

see you and good luck

provided that foreigners hold a maximum of 49% of the total

Hi,

Not the surface area but the capital. 😉

provided that foreigners hold a maximum of 49% of the total surface area

Hi,

Not the surface area but the capital. 😉

Well, that amounts to the same thing!!

Hello,

I’d like to add my two cents about Indonesian companies (PT and PMA).

1) A simple PT is a public limited company (SA) or limited liability company (SARL) owned by Indonesians. PT stands for *Perseroan Terbatas*, which means Limited Liability Company.

2) A PMA is a special public limited company (SA) or limited liability company (SARL) registered as a Foreign Investment (so through the BKPM, the Foreign Investment Coordinating Board, by foreign shareholders, including some French ones). (Don’t be surprised—a PMA also starts with the letters "PT," like "PT Danone Indonesia," because a PMA is also a public limited company or SARL. 🤪)

3) On Google, you’ll find all the rules for Indonesian PMAs under the keywords *PMA + Foreign + Investment + BKPM*. Since 1980, these rules have changed roughly every five years. Consistently, though: - There’s a minimum capital requirement (but you can pay only a portion of it in the first few years). - Generally, a small percentage must be left to an Indonesian shareholder (or put in the name of a nominee). - In theory, foreigners must reduce their percentage over time (but 30 years later, many PMAs are still 90% owned by the original foreign shareholders). - Many economic sectors are open to PMAs. Some sectors are strictly closed (e.g., alcohol distribution). Others are encouraged, even allowing 100% foreign ownership.

4) In the 1990s and 2000s, thousands of foreigners abused PMAs to buy land (especially in Bali). They’d set up a sham PMA under the pretext of tourism, hospitality, real estate construction, restaurants, etc. Then they’d buy private land through these PMAs. 😜 They’d build private villas and pools. And the PMA would have *zero* economic activity from day one to now!! They’d claim they couldn’t get a single customer... 😜 Eventually, they ruined the golden goose. To crack down on these abuses, the Indonesian government and the BKPM removed the "tourism and related" sectors from those allowed to acquire land in 2007. (PMAs created before 2007 can still buy private land, though.)

5) Having owned a telecom PMA for five years, I know a bit about the BKPM’s complex decision-making logic. I think a sincere, mid-sized investor in tourism could get all the approvals to set up a PMA (especially at the Lombok BKPM, where the governor really needs hotels to accommodate arrivals from the future international airport). In my humble opinion, a persistent investor could, through their PMA, acquire land, build their hotel, get up to five expat work permits, etc. BUT—serious question from Poutou—there are two major constraints to my plan: - **First catch:** You’ll need a minimum size, like 20 rooms or 20 bungalows + a large pool, restaurant, etc., for the BKPM to be interested in helping you and creatively finding the right classification under the 2007 law for your PMA. 20 rooms and all the trimmings mean about 700 m² of construction. At roughly 400 Indonesian rupiahs per well-built and cheaply furnished square meter, that’s an investment of 280,000 rupiahs. Let’s say 400,000 with the land, the company minibus, etc. This won’t please my friends who love the authentic atmosphere of Indonesian *losmens* (budget inns) with woven bamboo for 3 rupiahs a night (I love the *bak mandi* in tiny bathrooms too), but these days, for 400,000 euros, you get nothing in terms of real PMAs. As mentioned earlier, you can start with 40,000 euros, but if you don’t register a hotel (ecotourism or gastronomy tourism) with a declared capital of at least 400,000 euros, the Indonesian administration will—rightly or wrongly 😉—put you in the same category as the schemers in point 4 above and block the PMA from acquiring land. - **Second catch:** A real, functioning PMA is a *real* bureaucratic nightmare in terms of accounting, immigration, labor laws, taxes, tourism regulations, etc. The same laws apply as for a simple PT, but you’re constantly under the microscope of all the authorities because out of 10,000 Indonesian PTs, there’s only one PMA! Being rich and foreign, you’re a soft target for universal bureaucratic scrutiny. So, since 2007, it’s all or nothing! If you choose the PMA route, you’d better aim for at least 500,000 rupiahs in annual revenue after four years, or you’ll face all the hassles of petty extortion and mountains of paperwork without the benefits (90% of real PMAs make over 2 million euros in revenue!!). You might start making money in the third year. The coconut-tree siesta will come in 10 years, when you sell your successful PMA for a fortune to some new enthusiast. 😎😎😎

6) And what about the simple PT option, Poutou asked? - It allows you to buy all kinds of land and buildings. - It covers all economic sectors, including small-scale hospitality. (But for three *losmen*, you don’t even need a PT!) - It’s much more lenient in terms of monthly paperwork. If the investment and annual revenue are small—say, 20,000 euros/year—the administration will mostly ignore you. - It allows you to get 1 or 2 expat work permits under the title of *Technical Advisor* (who, unofficially, actually run "their" company). - **Big limitation:** It doesn’t allow foreign ownership of shares!! So you’re forced to go 100% through nominees. This puts you in the same situation as buying land individually through a nominee (see all the posts above). - Often, in Bali, expat entrepreneurs start with a simple PT (via two nominees) and later, if the business is very successful, set up a real PMA to protect their property before the business becomes too coveted.

Happy back-to-school to everyone.

Thanks so much for your reply!! It’s true that the small PT is a better fit for our modest project (ten eco-friendly bungalows) and our budget. We want to keep the business family-run and aren’t necessarily looking to create a big tourist site! For the land, we’re using a nominee system, taking the risks that come with it... The goal of the project (after generating profits) is to build schools... In that regard, I saw that you’re the founding president of an association working in education—if we could discuss this privately at some point, that’d be amazing. I’ll gather your info, do a bit of sorting... and I’ll definitely get back to you! The main thing is figuring out the right organization between the documents to bring to Indonesia, the nominee who’s in France... We’re leaving in early November, so time’s running out!

Thanks a million!!

Sama Sama (you're welcome).

Since we’re all buying agricultural land, for your nominee, you’ll need to get a KTP (ID card) from the Lombok Kabupaten where your land is located. It costs around 20 € and takes about a week. The nominee can stay in France.

Good luck. Be systematic, cautious, and very persistent. Don’t listen to local partners who urge you to rush, swearing everything will be fine. If you trust your common sense and self-preservation instincts, you should be able to protect that beautiful little plot of land you’re dreaming of near the Indian Ocean.

Hi Lolo ... I followed your process for buying land in Lombok with great interest. I’m in the same situation as you now, just a few years behind. How’s it going for you??? Thanks for your reply. Best, Jean François

Hi JF

Unfortunately, my project has been delayed by fate: my mother’s serious illness and a car accident involving the friend who’s co-investing with me... But things are going well on the ground—I’ve managed to get the certificates for the different plots (some took up to 2 years to obtain). Setting up the PMA and getting the building permit will be the next step once this tough period is behind me.

Loic

Hi Loïc, Thanks for your quick reply. Could we talk on the phone? I’m heading back in a few weeks to sign the land purchase in person, and I’m looking for as much info as possible. Thanks! My number is 0609158552

I’ll send you my number in a private message, but just to clarify (for others who might also ask), I’m FAR FROM AN EXPERT in this area—especially in the Kuta Lombok zone (the most in-demand right now). I bought land on the east side of Lombok in an area that’s still underdeveloped, which, administratively, falls under Lombok Timur rather than Lombok Tengah. Very few foreigners are present in Lombok Timur. There’s no real estate pressure like elsewhere, and in fact, there are no real estate agencies catering to foreigners. The local administration handles very few foreigner cases. The upside is that the area isn’t yet on the radar of the scammers who operate in Kuta, but the downside is that it’s still poorly mapped, and the administration is pretty outdated. So, the practical issues you might face can be very different.

Hey lolodesiles, I’d like to hear how your land purchase adventure turned out—did everything go as you hoped? I’ll be in Lombok in about ten days to sign. Can you reply in private? I’m not far from Lyon either—could we talk on the phone? It’d be way more practical. Thanks

Hi

Actually, my experience is limited. I did buy land that’s in the name of an Indonesian (there’s no other way), and had him sign a nominee package (for him and his wife) that includes a debt acknowledgment for 10 times the land’s value (in case he gets the idea to resell it, since everything is in his name). No issues in all these years... I’m planning to set up a PMA (foreign-owned company), a structure that will let me get a land concession (a kind of long-term land-use right), which will make me less vulnerable to my nominee (since this right is recognized by law and the courts).

That’s as far as my experience goes for now. I won’t have time to talk on the phone because I’m actually leaving for Indonesia (and not for Lombok)!

Everything depends on your nominee—you absolutely need someone you can trust, which is really hard to find in Lombok. You also need to verify the land’s status on the cadastre by any means possible (in person or through a trusted person you pay if needed). In fact, a *lot* of land in Lombok has been sold multiple times to different people.

Loic

Thanks for your quick reply—I think I’ve gathered everything I need to move forward. Have a great trip, Loic

Are there residency visas? Buying through a nominee is pretty much a guarantee you’ll get scammed—I don’t know Indonesia, but in India that’s how it goes. In Goa, there were so many problems for Brits that their embassy had to step in; they lost their property after five years. So keep your 10 000 € for your trips there.