Property Investment Case Study: Indonesia (TPI-ID-001)
Introduction:
“The Island of the Gods”. “Shangri La”. “The Centre of the Universe”. Known by many evocative names, Bali is undoubtedly one of the most culturally fascinating and scenically beautiful islands in the world. And a Mecca for visitors from every corner of it. A chain of awesome volcanoes stretches across the island helping to create an ideal environment for tropical rainforests, cultivated rice fields, mangrove swamps, beaches of both black (volcanic) and white sand with some world class surf.
The hypnotising sounds of gamelan orchestras, beautiful textiles, intricate paintings and carvings are all interconnected with Balinese spirituality and religion; a way of life virtually unchanged over time. It’s hardly surprising that people are captivated with this tropical island paradise … and some of them never leave!
Bali is also home to large and dynamic community of professional and creative expatriates. This has resulted in a considerable number of businesses and small industries ranging from furniture exporters to fashion designers establishing themselves and in turn attracting like-minded people. As many of these expatriates have chosen to make their homes in Bali, the number of international accredited schools has increased dramatically over the last five years and now there are quality educational facilities for Japanese, Korean, German, French and English native speakers.
The island’s infrastructure has also been developing rapidly in recent years. Dual carriage ways now connect the international airport to the west and east coasts and broadband satellite internet connections and Wi-Fi hotspots can be found in all major tourist areas and in the residential enclaves of Seminyak and Canggu. It all adds up to create a strong and dynamic cosmopolitan atmosphere in paradise.
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The subject of property ownership in Indonesia is much debated and one of the few clear facts that should be remembered at all times is that only Indonesian citizens may currently own freehold land. This law is not likely to change in the next 5 years. Companies, whether Indonesian, foreign or joint venture, or foreign individuals can only enter into what international investors would generally refer to as lease agreements. When putting this guide together, we received numerous interpretations and opinions from a variety of local law firms and “foreign technical advisors”. As non-Indonesians are not allowed to practice law in their own right (except where they act as in-house legal counsels), obtaining accurate information is sometimes a difficult task. Professional indemnity insurance is virtually unheard of, so any recourse in the event of an incorrect or inaccurate legal opinion is practically impossible.
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Report Compiled By:
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Report ref: TPI-ID-001
Date created: 26-03-2006