There are several regulations related with building construction project in Bali
. Especially for foreigners, there will be some differences in terms and conditions related to the agreement when they want to possess any land or building a property in Bali and also other places in Indonesia. The regulation has stated that foreigners can’t directly have property in Indonesia without using nominee. This is because the nominee has to sign several legal documents requiring Indonesian ID. Foreigners who are contemplating freehold title of purchase, the main choice is using a nominee for Indonesian.
Foreigners are able in securing interests with several documents with good advice on legal matter when they choose reliable agent. They can also take mortgage in which it will bring direct result on placing their names on title. It precludes all dealings related with the title without the consent of foreigners for mortgage removal.
There are some documents in which the nominee has to sign. First, the nominee should sign agreement related to the Right of Use which deals a lot with the permission of the foreigners in using the land. Then, the nominee should also agree with the terms and condition in loan agreement which acknowledges where foreigners have lent land’s price purchase to the nominee.
Another important document that a nominee should sign is the statement letter related with the loan of foreigners and their intention for possessing the land. The use of attorney is also applicable and this is why nominee should sign Attorney Right in which the nominee can give total authority in selling, mortgaging, leasing or any dealing with the land for the foreigner.
However, some foreigners feel objected in finding nominee in Indonesia as some of them may not know any Indonesian person to become a nominee. There is no need to worry that foreigners have the solution in making the most of foreign investment company service which is legalized in the country. Establishing a company from foreign investment, called Penanaman Modal Asing (PMA) in Bahasa, can be the best alternative for foreigners without attempting to find partner.
Such regulation has been implied since 1997 and it can be very beneficial to all foreigners for being property owners because they can own the PMA and the title for one hundred percent which will last for 25 years and it will be renewed with the local government.
Most property agents can help any foreigner who wishes to have their property built in Bali in proper procedure. First of all, clients should submit the plan of his or her business in detail. But it should be noted that the government will accept any application in which the PMA can operate in such environment of business that may be beneficial for all aspects related with investment and also local employment.
When a foreigner has decided have his own PMA company can acquire the land with the building purpose right (Hak Guna Bangunan) which is valid for thirty years and can be extended to twenty years. The foreigner can also have some choices for merely leasing his land to PMA or he can leverage through his nominee and lease it to the company of PMA.