AP Con is aware that Indonesia and Bali especially has been the most attractive business place for foreign investor. In this stage AP Con try to involve positively to share its experiences to any investor who would like to get business information including Indonesia regulation. AP Con always open mind in sitting together to client or investor to discuss what the client or investor should do once investing in Indonesia.
Mostly discussion and common question occurred once foreign investor would like to enter in Indonesia is to choose an appropriate company model is an essential first step in the process of establishing or expanding your business in Indonesia, how to execute land in Indonesia, working permit, immigration services and for sure tax would be the critical concern.
AP Con through its services trying to assist investor or client by giving some information, business advices to answer the common question above.
AP Con confirm that generally investments in Indonesia can be categorized as either domestic (Penanaman Modal DalamNegeri or PMDN) or foreign direct investments (Penanaman Modal Asing or PMA).Foreign direct investment companies in Indonesia, established under full foreign ownership or under joint venture structure, should be incorporated as Indonesian Limited Liability Companies (Perseroan Terbatas (PT) and domiciled in Indonesia.
AP Con answer on what the Foreign Direct Investment is
According to Indonesian legislation, foreign capital investment in Indonesia may only be conducted in form of a limited liability company, that is established in accordance with the Indonesian legislation and that has its legal domicile within the Indonesian territory.
The foreign capital investment limited liability company (Perseroan Terbatas – Penanaman Modal Asing – “PT. PMA”) is the most commonly used vehicle for direct foreign investment. An application to the Investment Coordination Board (“BKPM”) is necessary in order to obtain permission for a foreign capital investment. A letter of approval (Investment license) will be issued by the Head of the Investment Coordinating Board to the applicant after all of the requirements prescribed by law have been completed and fulfilled.
To the check the possibility of line business that would be the business propose of investor or client then “The Negative List” would be the answer. There are a number of Presidential Regulations – commonly referred to as the “Negative List” – that define those areas that are closed for foreign investment and those areas which are open to foreign investment subject to certain conditions.
AP Con advise on how to execute land in Indonesia
The basic Indonesian Land Law is Law Number 5 of 1960 (UU 5/1960), also referred to as UUPA (UndangundangPokokAgraria, or the Basic Agrarian Law Act). Generally, Land titles can be classified under two categories: Primary Land Titles and Secondary Land Titles.
All primary land titles are certified and registered with the National Land Agency (BPN Office).
- Right of ownership / free hold called as HakMilik, here right of ownership is the most complete form of individual right on land. It gives the holder the right to use land and the earth underneath and also water and air above it. Right of ownership to apiece of land does not include the right to obtain the wealth underneath the earth. Right of ownership has no time limit, the land owner is entitled to convey the use this land to another. The land owner is given a legal document as evidence of his right officially known as a Certificate
- Right of Cultivate called as HakGuna Usaha, this right to cultivate state land or to use it for other agricultural purposes is for a fixed period of time not to exceed 35 years, extendible for 25 years. Right to cultivate can also be released to the state . In practice there are two kinds of HakGuna Usaha, one for farming enterprise which smaller then 25 hectares, and one for enterprise which are 25 hectare or more. The regulation applicable to each kind are not same. However according to our new investment law number 25/2007 which just
- Right of building (HakGunaBangunan), is a title on land which gives its holder the right to erect and posses, normally belongs to company. In turn the holder of the title is given a certificate as evidence of the right. Right of building does not entitle its holder to obtain the natural resources in the earth underneath the land possessed. However according our new law investment number 25/2007 Hak
- Right of Use (HakPakai),is a title on land which gives its holder the right to use and obtain the product of a certain piece of land. The land possessed with right of use can be either state land or land belonging to a private sector.
Basically foreigner cannot own land in Indonesia, its totally restricted according law number 5/1960, however since 1967 Indonesian government already governed about investment law whereas foreigner through investment mechanism they could have land in Indonesia legally. Foreign direct investment normally called as PMA, here foreigner could set a PMA with 100% ownership which can own land and properties in Indonesia.
AP Con dealt with Consulting Services for Development Cooperation and Corporate Sustainability
AP Con provides consulting services for development cooperation, individual experts and consultants for third party projects and programs and consultancy for corporates on corporate sustainability, corporate social responsibility, environmental assessment and in various other sectors related to the expertise of AP Con. and its experts.