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Summary of Government Regulation Number 39 of 1973 on Judicial Procedure of Indemnity Determination by the High Court Related to the Revocation of the Right of Land and the Objects Over a Land.

This government regulation regulates a legal action by the parties who are related to the revocation of the right of land and the objects over a land. The parties are able to appeal to high court according to indemnity decision which is not suitable, within 1 (one)month from the date of the Presidential Decree which is regulated on Law Number 20 of 1961 on the Revocation of the Right of Land and the Objects Over a Land.

The parties are able to appeal by written or verbal notification to the Clerk of the High Court . If the appeal is verbal, the Clerk will make note of the appeal. The Clerk receives the appeal letter with the legal costs which is determined by the Chief of the High Court. If the applicant cannot  pay the legal costs, the applicant could be released from the legal cost based on the consideration by theChief of the High Court. Within a month after the Clerk of the High Court receives the appeal, the High Court shall examine and make a decision in the shortest possible time. The High Court can also hear all parties who are directly involved with the implementation of such revocationbut The High Court could give the process of hearing directly to the local District Court where the land is and the objects are located.

Then, within a period of 1 (one)\ month, the High Court will notify its decision to the parties concerned and published it  on the State Gazette of the Republic of Indonesia. The High Court also imposes all costs including the legal costs to the applicant’s appeal or to the concerned parties  by the High Court consideration.

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Requirements of Residences Ownership By Foreigners According to The Agrarian State Minister Regulation/Head of National Land Agency Number 7 of 1996

This Agrarian State Minister Regulation explains about the requirements of residences ownership by foreigners, within the frameworks of the implementation of the Government Regulation Number 41 Of 1996 On Residences Ownership by the Foreigners Who Are Domiciled in Indonesia (the “GR No. 41 of 1996”). The Foreigners on GR No. 41 of 1996 are the foreigners who own and maintain the economic interests in Indonesia by implementing an investment to have a residential in Indonesia.

Residential ownership and how to obtain the right of land by the foreigners, are as follows:

  1. Purchase and build the residence on the Right to Use over a state land or the Right to Use over the Right to Own.
  2. Purchase the condominium which is built on the Right to Use over a state land.
  3. Purchase and build the residence on the Right to Own or the Right to Rent of the building which is based on written agreement with the owner of land.

The residence or condominium that can be purchased or built by the foreigners is residences or condominium that is not categorized as simple residences or very simple residences classification.

The acquisition of the right of land and/or residences and the Right to Own of Strata Title unit by the foreigners are carried out in accordance with the procedures according to statutory provisions applicable to the relevant legal actions. While the residences are not used by the foreigners, the residences can be rented by the company in Indonesia based on the agreement between the foreigners and the company.

Foreigners are obliged to release or transfer to the parties that are eligible in accordance with Article 6 paragraph 1 GR No.41 of 1996 when the foreigners or their family members do not use the residence for 12 (twelve) consecutive months.

Posted in Foreign Ownership, Summary of Regulations.


Property Ownership for Foreigner and Foreign Entity Based on Draft of New Government Regulation

The Government of Indonesia has been trying to find a way to provide more flexibility for a foreigner and foreign entity to own a property in Indonesia. One of the intentions is also to improve the property market in Indonesia. At this moment, the Government has been preparing a draft of new regulation on property ownership for foreigner and foreign entity. The type of regulation is the Government Regulation that will amend or terminate the previous Government Regulation Number 41 of 1996 on the Ownership of Residential House by Foreigner that is domiciled in Indonesia.

Definition of Foreigner and Foreign Entity

In the draft of regulation, the foreigner is defined as every individual that is not Indonesian nationality that is presence or domiciled in Indonesia. Foreign entity is defined as a private or public foreign legal entity. Private foreign legal entity means a legal entity that is established not based on Indonesian law or association or any other entities, having more than 50% of its members as foreigners. Public foreign legal entity means representative of foreign State or representative of international bodies in Indonesia.

Definition of Property

Property is a landed house and/or strata title unit. Landed house is a residential house or horizontal house that is directly established over the land. A landed house and/or strata title unit may have function as a residence, office, and/or trade, and/or social, cultural, and religion. This means that a foreigner and foreign legal entity may purchase property not only for residential purpose but also for commercial and other various functions.

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Posted in Foreign Ownership, Summary of Regulations.

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Principle Provisions of Agrarian Law in Indonesia

Background

In December 1960, Indonesian Government declared the Law Number 5 of 1960 on the Principle Provisions of Agrarian (the “Agrarian Law”) as the principles legal provisions of land in Indonesia.

The Agrarian Law is the principle and basic provisions of the agricultural conditions which is the foundation for other land regulations. This includes the principles and the main issues of land. The Agrarian Law’s goal is to lay the foundation for developing a national land law, for unity and simplicity in the land law and to provide legal certainty about the rights over land for the people.

The Scope of Agrarian Law

The Agrarian Law is applicable for soil, water, and natural richness in it, even airspace within certain limits.

Rights of Control by the State

The earth, water, and airspace, including the natural resources contained therein, are controlled by the State. Because of that right, the State has the authority to do the following:

a) To regulate and administer the allocation, use, supply, and maintenance of the earth, water, and airspace;

b) To determine and regulate legal relationships between people and the earth, water, and airspace;

c) To determine and regulate legal relationships among people as well as legal acts concerning the earth, water, and airspace.

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Principle Regulations Governing Batam Island and Its Effect on Property Sector

Batam has a strategic geographical location as the closest island to Singapore and Malaysia, which strategically located in the international shipping route. As the special zone for multinational trade area, Batam has a special treatment from the Government of Indonesia. This specialization can be seen from the several regulations on Batam status, which are as follows:

  1. Batam Island as the business area of Bonded Warehouse regulated in the Presidential Decree of Republic of Indonesia Number 41 of 1978 as amended lastly by the Presidential Decree of Republic of Indonesia Number 25 of 2005.Batam, Rempang and Galang (which also declared as an Industrial area), is developed to serve several main functions, namely: industrial, warehouse, trade, and transshipment.
  2. Free Trade and Free Port Zone regulated in the Government Regulation Number 46 of 2007 on the Free Trade Zone and Free Port Zone Batam.Batam has been determined as a Free Trade Zone (“FTZ”) and Free Port Zone (“FPZ”) which it gives the guarantee and the protection for all investors to conduct their business in Batam.
  3. Tax liberation regulated in the Government Regulation Number 2 of 2009.Batam was not only determined as place of warehousing, but also for place of processing with the liberation for Import Duties (Bea Masuk), Customs and Excise (Bea Cukai), Value Added Tax (PPN), and Luxury Goods Tax (PPnBM) which can be enjoyed by the entrepreneur who has obtained permission in Batam.
  4. Economic Cooperation regulated in Joint Statement by the President of the Republic of Indonesia and the Prime Minister of the Republic of Singapore.On June 25, 2006, the President of Republic of Indonesia and the Prime Minister of Republic of Singapore committed the joint statement of the Framework Agreement on Economic Cooperation between the Government of the Republic of Indonesia and the Government of the Republic of Singapore in the Islands of Batam, Bintan and Karimun.

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Posted in Batam Property Law.

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