29 March, 2016
Government Regulation No. 103 of 2015, dated December 28, 2015, regarding Ownership of House or Residence by Foreigners Domiciled in Indonesia. This Regulation revokes its predecessor, namely Government Regulation No. 41 of 1996 regarding Ownership of House or Residence by Foreigners Domiciled in Indonesia dated June 17, 1996 (“GR 41/1996”). This new Regulation does not introduce drastic changes to GR 41/1996. However, several changes are noteworthy. This Regulation expands the de nition of a “foreign person domiciled in Indonesia” to mean a non-Indonesian citizen whose presence gives a bene t to Indonesia or who conducts business in, or works or invests in Indonesia. This is in contrast to the more ambiguous provisions in GR 41/1996, which de ned the term as a foreign person whose presence in Indonesia gives bene t to national development. The requirement that the foreigner be domiciled in Indonesia means non-resident foreigners are ineligible to use the new Regulation to purchase land. It is unclear whether the foreigner must have an Indonesian domicile only at the time of acquisition on throughout the period of ownership. This Regulation also introduces a new provision regarding the rights of land ownership for an Indonesian citizen who is married to a foreign national. An Indonesian citizen married to a foreign national can still own land, the same as any other Indonesian citizen, provided that there is a notarial deed prenuptial agreement for separation of assets. Also, the Regulation allows a foreigner to be granted a Right to Use (Hak Pakai) title for the purchase of a new house and a Right of Ownership (Hak Milik) over an apartment unit (Hak Milik atas Sarusun) built on Hak Pakai land, for the purchase of a new unit. This language raises the question whether the new Regulation applies to buildings that are already constructed, i.e., that are not new. This Regulation does not limit foreigners to ownership of only one house or apartment, which was clearly speci ed in GR 41/1996. This Regulation came into effect on the date of its promulgation.
For further information, please contact:
Dyah Soewito, Partner, Soewito Suhardiman Eddymurthy Kardono
dyahsoewito@ssek.com
