Nominee for the land or property in Bali

Nominee is not known in Indonesian Law. It is more similar as a "forced product" of people who want to settle a problem but it is not arranged yet in Indonesian Law. In Indonesia it is common to be used by people who want invest on property, especially on land but this people does not comply any terms according to the law thus they use this product to settle their problem. 

Nominee came from the word "name", on the property business it is so popular when an expatriate want to have a land with a freehold but the law does not accommodate their needs caused the law does not allow expatriate who does not have Indonesian Citizen to have land with freehold, thus they use / "borrow" Indonesian Name of Indonesian people to be entitled on the certificate of the land/s those they bought, with intention: they can use those lands as they want without wondering any limit time of expired. 

Benefits of using nominee: 

• The borrower (expatriate) could use the land as freehold with "full power" contained in the freehold. 
• Has no limit time of ownership by the nominee. 
• The process of moving or transfer of such land/property is more simple, just by a sign of nominee. 
• Could be burdened with mortgage with simple way. 

Frailty of using nominee:

• All power is held by nominee and nominee's family in case the nominee is dead. 
• The nominee could sell such land/property without any accordance from the "borrower" / expatriate. 
• If the expatriate want to sell / transfer / put mortgage on the land and the nominee is not appeared or doesn't want to come or doesn't want to sign and pressing the expatriate with some price to do such action, the expatriate has no choice neither solutions but paying all nominee's want. 
• Although the certificate already burdened with a mortgage,  if the nominee is cleaver and see the value of the property in his/her name is more than the mortgage inserted on the certificate, the nominee can loan money more with such certificate and put another mortgage and does not want to pay anything until the bank come and take over such property and let the expatriate sleep on the street. 
• Or the nominee loan money as much as mortgage in the certificate and settle / erase such mortgage and go to the other investor and sell such property with copy of the certificate that they can propose to the Land Department.

Thus.... what is the solution to invest in Bali / Indonesia without wondering nominee's problem?

• Use Hak Pakai or other rights those prepared by Indonesian Government according to Agrarian Law (UU Nomor 5 Tahun 1960) those accommodate all investor's need. Although the right has limit period but the secure is trusted and the cost spent is so economic and could be renewed for every 50 years (30+20 or other calculation depend on the option of the rights used). This right could be held by expatriate personally. 
• Use Hak Guna Bangunan (HGB), this right could be held by a company both Indonesian Company or Foreigner Company (PMA), by this way there is no abuse in Indonesian Law to hold the land or property.

Freehold of Land in Bali

Freehold of land or Hak Milik Atas Tanah in Indonesia is ruled by UUPA (Agrarian Law) where in the article 21 (1) of UUPA (UU Nomor 5 Tahun 1960) only Indonesian Citizen could have it or to be have by a legal person who indicated by the Indonesian Government. 

For expatriate / foreigner, it is not allowed to have land or property with freehold (hak milik) caused in the article 21 (3) of UUPA arranged that:

Foreigners who after the enactment of this Act to obtain property inheritance without a will or a mixture of property by marriage, as well as citizens of Indonesia have owned and after the enactment of this Act loss of nationality must relinquish that right in period of one year from obtaining such rights or loss of citizenship.  

If after that time period past the property was removed, then the right is void due to law and the land falls on the State, provided that the rights of others burdens persist.

It is completed by paragraph (4) of this article that arranged:

Over the next person to have Indonesian citizenship of foreign nationality so he can not have property rights and land with him apply the provisions of paragraph (3) of this Article.

So, it is so clearly arranged in Indonesian Law that expatriate could not have land in Indonesia with Freehold if they act as private person, but if they act with Foreign Investing Company or PMA, they can have it with rule of company (PMA) that arranged by the Government. 

The Expatriate is only allowed to use Hak Pakai (Using Right) if they are private person, or Hak Guna Usaha (Business Purpose Right) and Hak Guna Bangunan (Building Purpose Right) where the explanation will be described in the other page. 

The Clue for the ownership of lands in Indonesia with Freehold or Hak Milik is: Indonesian Citizen.