PMA or nominee use ?

**Pearl** · 17-12-2008, 05:34 PM

Hello,

Because it's complicated and also because I just start my investigation, I will have a simple question (maybe it is not that simple, this is what I feel :lol: ) :

To own a property in Bali, shoud we (better) use a PMA or a nominee ?

Thanks

Pearl

**Bert Vierstra** · 17-12-2008, 06:41 PM

A PMA is used to set up a company, if you just set it up for "holding a house" you don't use the PMA for where its meant to be used for. I believe officials are looking very critical at the set up of PMA's.

A nominee structure is used a lot, and I believe its the most used construction. If you look at the letter of the law, or better, the spirit of the law, its not a valid construction. So if you end up in trouble with your nominee, you may draw the shortest straw. I say may. Not necessary.

If you use a nominee, use one you can trust for 100%.

Most safe constructions are lease or Hak Pakai. But even leases and Hak Pakai come in different flavors nowadays, not all of them trustworthy IMHO.

Buy this book:

http://www.equinoxpublishing.com/srirolaw/default.htm

It talks about a lot of aspects of Indonesian law, also about foreigners and property.

Look through this section of the forum to get an idea on how different people have different views on the matter. And you will find that a lot of developers and agents also have their own "version of the law".

Still, many foreigners live in Bali, and buy and sell houses in one or another way.

Its not a bad idea to rent for a while and feel the water.....

**Roy** · 17-12-2008, 06:53 PM

Its not a bad idea to rent for a while and feel the water.....

In fact, that is an excellent idea.

Pearl, it is almost a certainty that the real estate laws, especially those dealing with foreign “ownership” and use of land in Indonesia will be revised in the near future, or at least clarified, as there is far too much ambiguity within them as they currently stand.

For newcomers, I would suggest they follow Bert’s excellent advice and be very cautious about entering into any long term arrangements until the dust settles on all of this.

**Pearl** · 17-12-2008, 06:56 PM

Thank you Bert,

Rent will be definitevely a solution... to wait and see. Thanks for the tips.

Pearl

**Pearl** · 17-12-2008, 07:15 PM

Hello Roy,

This is also what my wife is thinking.... it may change in the future, we just need to be patient.

Thanks

Pearl

**Pearl** · 17-12-2008, 07:18 PM

"Sriro's Desk Reference of Indonesian Law 2008"

Weight : 1 kg
Pages : 672

WOOAAHH :shock:

**vandor** · 17-12-2008, 07:37 PM

It is very unfortunate that I have to say that, no proper guidance to Indonesian law seems to exist in English. I have used the mentioned book in several occasions, and I would certainly not recommend to place big reliance on it: it is a not very well organised, very limited compilation of very messy word for word translations of the very messy Indonesian law.

To put is short: the PMA ownership is perfectly legal, though expensive to set up and maintain. Nominee ownership can be challenged any time.
The other difference: only private Indonesian individuals (i.e. nominees) are allowed to own Hak Milik (freehold) land. PMA’s can only have leasehold.

**Pearl** · 17-12-2008, 07:50 PM

and in french :mrgreen: ?

**Bert Vierstra** · 17-12-2008, 08:05 PM

Vandor, its not true what you say, I am afraid.

There have been several messages in the Media about the government looking stricter at PMA's which are set up to hold property only.

PMA's can hold a lot more than leasehold. This "awful book" names: hak guna usaha, hak guna bangunan and hak pakai to name a few.

**vandor** · 18-12-2008, 03:37 PM

PMA's can hold a lot more than leasehold. This "awful book" names: hak guna usaha, hak guna bangunan and hak pakai to name a few.

Hak guna usaha relates to the agricultural utilisation of the land.
It is true that hgb and hp can be held by PMA's. These are special rights where the ultimate ownership remains with the state/government, which gives the usage right for a limited period.
In most of private deals however, usually there is privately owned hak milik land involved therefore, in the end, foreigners most likely end up either being involved in a nominee structure or a leasehold.

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