Bali property and options property
Bali is an amazing place and inviting to live, and also invest. For 15 years of real estate prices continued to rise, and are more likely to continue doing so.
For Indonesians, there is no problem because there is no limit to how an Indonesian may own or control a property, as long as it complies with the law Indonesian land.
Over the years, Bali has also developed its own "culture" of how foreigners in particular may own or control properties there. However, some of these habits may not be entirely in Indonesian law; not only from a legal point of view, but also from the perspective of taxation and immigration.
The strongest title to the land and property in Indonesia is the title of "freehold" or Hak Milik in Indonesian. Only Indonesian citizens may hold the title of freehold - end of story. Many lawyers and notaries in Bali will offer what they call a "structure of candidates"; with a complex set of agreements telling abroad which makes control and "clean" of the earth. The fact is, Indonesian agrarian law clearly states any attempt for a foreigner or a foreign entity to own freehold land is zero, and the right to property owned by the Government. This structure also opens up a whole series of other legal complications; which is responsible for payment of taxes on these items, operating permits for a residence permit at home, etc. Currently, there are about 140 known cases of the police and the court between the applicant and the owner. These days we see all lawyers and notaries who have had this structure in place from slowly to argue against it.
Subordinated indebtedness known Hak Pakai or translated into right is probably the best option for a foreigner watching live full time or part time in Indonesia. Technically, it is an extension built in 25 years and renewal after 20 years with a small tax implication. However, there is no reasoning or mention in Indonesian law that these extensions and renewals can not be prosecuted as long as it is done on public lands. If you buy a freehold Indonesian, then the lawyer would take steps to convert it into state land before a title is delivered directly to the land certificate on behalf of the foreigner. There are some restrictions on this title on what ground the size of the property can be and abroad must hold a residence permit valid in Indonesia.
The best way to argue that those securities are sufficient to foreigners residing in Indonesia is that, even if he went to the year 24 and the stranger then sold the property to a Indonesia would require 2-4 weeks to convert the land back to freehold title.
commercially or Hak Guna Bangunan (right to build) is a commercial compulsory insurance for foreign and Indonesian companies buying, selling or managing houses for commercial purposes. From a 4 star and there are no restrictions to foreign LDCs owning such a company 100%. There are restrictions on the extension after 30 years and renewal after 25 years. However, as with residential title, there is no restriction in Indonesian law on the extension and renewal, and as with residential purposes, it can be converted back to a freehold title if the property is sold Indonesian citizen to purchase as private property.
This structure requires the establishment of an LDC, foreign company, and this can be done in a few weeks and is not very expensive. It is also possible to have the PMA via an offshore or legal entity in a country that gives many tax benefits, both the operation and the eventual sale or resale, all in Indonesian law.
last title to consider could be a simple lease of land and buildings, or Hak Sewa as it would be in Indonesian. It is, and probably rightly argued that the lease should not go beyond the deadlines right to use and right to build, because these titles would not make sense if it.
Recently, it was also quiet some questions raised by people wanting to exercise a fixed extension of a lease. It turned out to be quiet difficult to apply, even through the court. This is supported by the court not to be just for the owner in fee, especially when the price has been set and it is the extension time well below the market value.
In addition, there are tax implications that when the lease is sold again, for both the buyer and seller. And the latest immigration laws state that foreigners holding a lease must have a residence permit or hold securities under a PMA. Otherwise, as the involvement of tax for the seller will be twice as high.
At the end of it's time for mystics and smoke around it in the end. There is not a significant risk for a foreigner to hold the correct title, rather the opposite; there is no special tax advantages, the opposite to circumvent these options; no immigration or risk for foreigners holding the title right and stay permit, rather the opposite.
And as in any business, it is for the investor to have the right guidance and the right information to which they invest, and to be able to analyze risks in the best way possible.
Indonesia is changing rapidly for the better, both on creating a better investment climate and in the application of the law; why do we as investors do not follow it as we would in our own country, especially when it has no advantages to not do it.