Tropis Living

Ownership of Villas in Bali

It is still impossible for a foreigner to directly own land in Indonesia. There is a chance that this will change in the future. The government is taking a more flexible stance on this issue. In the mean time, you can create a contract with an Indonesian citizen, strong enough to give you the legal protection as if you would own the property directly.

An advantage of such a contract is that only simple modifications are required in the contract if you want to buy property together with other people.

In Indonesia, the land is registered in the name of an Indonesian citizen. We recommend a nominee, who is connected to our company. We have done business with him for some years and he has proved to be 100% reliable. Off course you can also select another Indonesian citizen if you like.

In any event, we offer an arrangement with the best possible legal protection.

The contracts

The complete contract consists of four parts which include the agreements for cooperation. According to Indonesian law, there has to be a balance between the two parties. The nominee "lends" his name and for this service you pay him. You pay IDR 200,000.- per month to him for the legal protection of your property, calculated against an exchange rate of IDR 15,000 this is approximately € 13.- In this way there is a balance under Indonesian law.

The four part contract.

Contract 1; which describes the non-Indonesian has given money to the Indonesian citizen in order to buy the land and villa. The Indonesian citizen will voluntarily supply the land and villa to the non-Indonesian, so the non-Indonesian can use the villa as his home. The Indonesian citizen owns and he has his share of responsibility for the property. All correspondence relating to the ownership of the land and the villa will be provided to you through him, as well as the bills for electricity and water supply. For this service he receives the benefits described above. On top he also receives 5% of any profits made from selling your villa. Furthermore, this contract states that the Indonesian citizen has given permission to rent out the villa and make changes to the property. There are arrangement for heritage and the payment of bills for water, electricity and property taxes.

You can download part one here: Part One (pdf)

Contract 2; This section describes the rules in detail if you decide to sell your property and the advance permission of the Indonesian counterpart to sell the property.

You can download part two here: Part Two (pdf)

Contract 3; Makes clear that the non-Indonesian can rent out (lease) the property.

You can download part three here: Part Three (pdf)

Contract 4; this section describes that when it becomes legally possible for the non-Indonesian to directly own the Indonesian property that the Indonesian owner has to cooperate in the change of ownership.

It is also agreed that in the event that a change (in negative sense) in Indonesian law would affect the contract agreements with the Indonesian "name holder" the contracts will have to be transformed into a lease for a period of 50 years with the right to extend.

If you at any time decide to stop your contract with "our" nominee and choose another "name holder", it is a requirement to compensate for his losses, which are the monthly payments for the period of 25 years. (25 x 13.- x 12 = € 3,900. -) (based on a EUR/IDR exchange rate of IDR 15,000)

You can download part four here: Part Four (pdf)

Any questions?

Please contact Palm Living through our the contact page.