Infographic: PMA vs Nominee, what is the safest method to own a property in Indonesia?
A Nominee Arrangement in everyday practice, is the use of a person’s name of Indonesian citizenship as being the owner of land which has the freehold title status in Indonesia. So the practice of a nominee arrangement is not only related to the use of an Indonesian name as a shareholder in PT Indonesia, but also the use of an Indonesian name for possession of freehold property in Indonesia, which is very widespread especially in Bali. Admittedly or not, there are numerous land parcels in Bali owned by foreigners, although when checked at the local land office, they are registered on the foreigners behalf by an Indonesian citizen.
This occurs because of the principle ban on the alienation of land (gronds verponding verbood) adopted in the land laws in Indonesia, which prohibits ownership rights of land by a Foreign National, other than usage rights. Since the enactment of RI Law no. 25 of 2007 on Investment and Law No. RI. 40 of 2007 Concerning Limited Liability Company, the practice of the nominee arrangement is PROHIBITED.
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