Some Legal Aspects of Export-Import According to Indonesian Law

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "The Role of Law in Sharia Economic Development" read also "Who's Legally Represents The Company In Indonesia?" and on this occasion we will discuss about Some Legal Aspects of Export-Import According to Indonesian Law.

Global Trade

Trade globalization is one type of economic globalization and a way (economic indicator) of implementing economic integration. At the national level, trade globalization roughly represents the proportion of all production that crosses national borders, as well as the number of jobs in countries that depend on foreign trade. At the global level, globalization of trade represents the proportion of all world production used for imports and exports between countries.[1]

International trade is a trade between countries which includes the process of export and import which is very influential on state income. International trade involves currency as a buying and selling transaction between countries and the laws used in accordance with international law. International trade can involve two or more countries with the exchange of goods or services.[2]

Indonesia's Export Leading Products 

As a country that is also involved in global trade, Indonesia has several superior products, namely:[3]

1. Shrimp (Udang), with export destination countries including: Japan, Hong Kong, China, Singapore, Malaysia, Australia, Taiwan, Thailand, South Korea, Vietnam, USA, Belgium, England, Spain, French, Canada, Dutch, Italy, Germany, Japan, Hong Kong, China, Singapore, Malaysia, Australia, Taiwan, Thailand, South Korea, Vietnam, USA, Belgium, UK, Spain, France, Canada, Netherlands, Italy, Germany;
2. Coffee (Kopi), with export destinations including: Brazil, Spain, Italy, Turkey, Argentina, USA, England, India, China, Thailand, Japan, Vietnam, Pakistan, Malaysia, Hong Kong, Sri Lanka, Bangladesh, Egypt , Iran;
3. Palm Oil (Minyak Sawit), with export destinations including: India, China, Malaysia, Pakistan, Singapore, Bangladesh, Vietnam, Jordan, Tanzania, South Africa, Egypt, Iran, Mozambique, Germany, Spain, Italy, Turkey, Russia, USA;
4. Cocoa (Kakao), with export destinations: Malaysia, Singapore, Thailand, China, India, Japan, Philippine, Taiwan, Sri Lanka, USA, Brazil, Canada, Germany, Dutch, Russia, Switzerland, Belgium, England, Mali, Malaysia, Singapore;
5. Rubber and Rubber Products (Karet dan Produk Karet), with export destinations: Japan, Malaysia, Philippine, Australia, Thailand, Singapore, Hong Kong, Taiwan, Sri Lanka, South Korea, USA, England, German, Belgium, Italy, Dutch, Canada, Saudi Arabia, Egypt;
6. Textiles & Textile Products (Textil dan Produk Textil), with export destinations:  USA, England, Germany, Panama, Italy, Canada, Mexico, Dutch, Spain, French, Japan, Australia, Singapore, Hong Kong, Sri Lanka, South Korea, Saudi Arabia, Ethiopia, Nigeria, Kenya, Tunisia, Sudan;
7. Footwear (Alas Kaki), with export destination countries: USA, Belgium, England, French, Italy, German, Mexico, Spain, Canada, Chile, Panama, Turk, Japan, Malaysia, Thailand, South Korea, Australia, China, Hong Kong;
8. Electronics (Elektronik), with export destination countries: Japan, Taiwan, South Korea, China, Malaysia, Hong Kong, Australia, Singapore, Thailand, Vietnam, German, Dutch, Italy, Belgium, Poland, USA, England, Denmark, French, Greece;
9. Motor Vehicle Components (Komponen Kendaraan Bermotor), with destination countries: USA, French, England, German, China, Malaysia, Vietnam, Australia, Hong Kong, Japan, Singapore, Thailand, Sri Lanka, India, Pakistan, Philippine, USA, Canada, Belgium, Turkey, South Africa, Iran, Saudi Arabia;
10. Furniture (Mebel), with export destination countries: USA, French, England, Dutch, Belgium, Spain, German, Italy, Canada, Denmark, Sweden, Japan, Australia, Malaysia, Singapore, South Korean, Taiwan, China, South Africa. 

Import-Export Legal Terminology

If referring to Law Number 7 of 2014 concerning Trade, there are several related terminology, including the following:[4]

• According to Article 1 number 16 of Law 7/2014: Export is the activity of removing goods from the Customs Area.
• According to: Article 1 number 17 of Law 7/2014, Exporters are individuals or institutions or business entities, whether in the form of legal entities or not legal entities that carry out exports.
• According to Article 1 number 18 of Law 7/2014: Import is the activity of entering Goods into the Customs Area.
• According to Article 1 number 19 of Law 7/2014: Importers are individuals or institutions or business entities, whether in the form of legal entities or not legal entities that carry out imports.

Some Legal Aspects

By law, the relationship between exporters (Indonesia) and importers (Country of Export Destination) in global trade is bound by an agreement as regulated in Article 1313 of the Civil Code (“KUH Perdata”) which reads as follows: "An agreement is an act in which one or more persons bind themselves to one or more other persons". From this agreement between the exporter and the importer, legal consequences arise between the parties who make the agreement covering the rights and obligations of each. [5] And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

Reference:

1. "Globalisasi perdagangan", id.wikipedia.org., Diakses pada tanggal 10 Desember 2021, https://id.wikipedia.org/wiki/Globalisasi_perdagangan

2. "Perdagangan Internasional, Pengertian dan Manfaatnya", indomaritim.id., Diakses pada tanggal 10 Desember 2021, https://indomaritim.id/perdagangan-internasional-pengertian-dan-manfaatnya/

3. "Produk Unggulan Indonesia", ppei.kemendag.go.id., Diakses pada tanggal 10 Desember 2021, http://ppei.kemendag.go.id/produk-unggulan-indonesia/

4. Law Number 7 of 2014 concerning Trade.

5. Civil Code (“KUH Perdata”).

The Role of Law in Sharia Economic Development

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "How To Legally Adopt a Child in Indonesia?" read also "Who's Legally Represents The Company In Indonesia?" and on this occasion we will discuss about The Role of Law in Sharia Economic Development. 

Major Muslim Population 

The total Muslim population in Indonesia is 87.2% of the population. With this amount, Indonesia has enormous potential to develop the Islamic finance and economic sector that can contribute to achieving financial inclusion targets including the development of Islamic finance.[1] In other words, the great potential of the sharia economy is based on the majority population in Indonesia who embraces Islam.

Sharia Economic Development in Indonesia

Currently, Indonesia has risen to rank 4 out of 5 in the world in terms of developing Islamic finance after Malaysia, Saudi Arabia and the United Arab Emirates. Meanwhile, Islamic financial assets in Indonesia are ranked 7th in the world with total assets of US$99 billion.[2] According to Prof. Dr. Edy Suandi Hamid, M.Ec Chancellor of the Widya Mataram University (UWM), the development of the Islamic economy has experienced significant development although it is relatively slow compared to when it first emerged in the 1990's. The Islamic economy is mostly concentrated in the financial sector which will slow down if it is not supported by the real sector. The challenges in developing a sharia economy will be easier to overcome if there are serious efforts from all stakeholders. The Islamic Economic Community (MES) must of course be at the forefront of giving ideas and unraveling existing problems.[3]

Sharia Economic Sectors

Some of the opportunities identified as enablers in the development of Islamic finance include the growth of social finance through zakat and waqf, tokenization of sukuk, digitalization and development of Islamic Fintech, sharia financial regulation and impact investment (ESG).[4] 

"The real sector needs to be encouraged so that it goes hand in hand with the monetary sector in developing the sharia economy. The implementation of sharia economy is not only at the level of large corporations, but also at the people's economy to the bottom tier. From existing developments, including a digital-based creative economy, sharia economy does not lagging behind in its digitalization implementation,” explained the Chair of the DIY MES Expert Council--Prof. Dr. Edy Suandi Hamid, M.Ec.[5]

The Role of Law in Sharia Economic Development

To support the sharia economy and finance ecosystem, it is necessary to integrate every element that supports the sharia economy which is reflected in a strong sharia economic ecosystem. In addition, for the development of the halal industry to support the national economy, regulatory support and government incentives are needed to encourage the development of the halal industry. [6] Prof. Edy explained that steps are needed as an effort to develop the sharia economy, including building theories and policies, encouraging a strong legal umbrella, disseminating and promoting sharia economics.[7] 

 

In conclusion, the author would like to convey that behind the huge potential for Islamic economic growth in Indonesia, it is necessary to support a legal sub-system as a supporter. And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

Reference:

1. "Potensi Besar Ekonomi Berbasis Syariah Indonesia", Kementerian Koordinator Bidang Perekonomian Republik Indonesia, Diakses pada tanggal 8 Desember 2021, https://ekon.go.id/publikasi/detail/2943/potensi-besar-ekonomi-berbasis-syariah-indonesia

2. Ibid.

3. "Perkembangan Ekonomi Syariah Indonesia: Perlu Akselerasi Baru", new.widyamataram.ac.id., Diakses pada tanggal 8 Desember 2021, http://new.widyamataram.ac.id/content/news/perkembangan-ekonomi-syariah-indonesia-perlu-akselerasi-baru#.Ya_-T9JBxdg

4. Op. Cit., Kementerian Koordinator Bidang Perekonomian Republik Indonesia.

5. Op. Cit., new.widyamataram.ac.id.

6. Op. Cit., Kementerian Koordinator Bidang Perekonomian Republik Indonesia.

7. Op. Cit., new.widyamataram.ac.id.

How To Legally Adopt a Child in Indonesia?

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "What Language Must Be Used In The Agreement In Indonesia?" and on this occasion we will discuss about "How To Legally Adopt a Child in Indonesia?"

Another way to become a parent is by adopting a child. Adoption is not a new thing in Indonesia because parents have been able to do it for a long time. However, not many prospective parents know the procedures and requirements for legal adoption of children according to state regulations. The following is the explanation.[1]

Child Adoption Requirements

The rules and procedures for child adoption are contained in the Indonesian Government Regulation Number: 54 of 2007 concerning The Implementation of Child Adoption. The requirements for child adoption are divided into two, for prospective parents and adopted children. The criteria for children who are allowed to be adoptive parents are:[2]

1. Not reached 18 years old;
2. The main priority is the age of the child has not reached 6 years;
3. For children aged 6-12 years, you can adopt as long as there is an urgent reason;
4. For children aged 12-18 years only for children who need special protection;
5. The child is an abandoned child or his biological parents abandon him/her;
6. The child is in the care of a family or care institution; and
7. The condition of the child requires special protection (eg.: victims of violence).

Meanwhile, the requirements for prospective parents who will adopt a child are:[3]

1. Physically and mentally healthy;
2. The minimum age is 30 years and the highest is 55 years;
3. Having the same religion as the prospective adopted child;
4. Be of good character and never receive punishment for a crime;
5. Married with a minimum of 5 years of marriage;
6. Not same-sex couples;
7. Economic and social conditions in a state of being able;
8. Obtain the consent of the child, parent or guardian;
9. Make a written statement that the adoption of a child is in the interests, welfare and protection of the child;
10. There are social reports and local social workers;
11. Have taken care of prospective adopted children for at least 6 months since the issuance of the parenting permit;
12. Obtain permission from the minister or social service office.

Quoting from the official website of the Indonesian Pediatrician Association (IDAI), it is recommended that prospective adopted children and foster parents carry out a health screening test. This test aims to see the clinical condition and from each party, both parents and children. General health screening procedures include:[4]

1. Physical examination (birthmarks, scars, or other physical defects);
2. Developmental screening;
3. Chest x-ray;
4. Complete blood count (red blood cells, antibodies to hepatitis A, B, C, syphilis, and HIV).

Meanwhile, if you are going to adopt a newborn, you should do some newborn screening. Some of the screenings such as thyroid hormone levels and hemoglobin. Don't forget to know the immunization status of the baby that your child has received.[5]

Child Adoption Procedures and Methods

The first thing that prospective parents must do is submit a letter of application to the district court where the prospective adopted child lives. The application letter must attach all the requirements that have been described previously.[6]

The second procedure, the social service officer will make a home visit and check on the economic and social conditions of the family. Checks include:[7]

1. Economic conditions;
2. Residence;
3. Acceptance from prospective adoptive siblings (if you already have children), social interactions, mental conditions, and others;
4. Financial checks need to be carried out by social workers to find out permanent work and family income.

For foreigners, there must be approval to adopt an Indonesian baby from the competent authority of the country of origin.

The third stage of the adoption of a child is when the social service agency assesses that the prospective parents are worthy, the child and the parents live together. This is a process for prospective parents and children to know and interact with each other for 6 months. The social service office will issue a Temporary Care Permit and carry out supervision and guidance during the care period.[8]

The fourth procedure for the adoption is the couple will undergo a trial in district court by presenting at least two witnesses. This process is to assess parenting patterns and interactions during the 6 month trial period between children and prospective parents.[9]

The fifth stage is the determination of the application's decision, whether the court approves it or not. If the court agrees, a decree with legal force will be issued. If the court rejects the application, the child will return to the Child Care Institution office. If the court has determined the result and the adoption process has been completed, proceed to the next procedure.[10]

The sixth procedure for the adoption is the adoptive parents need to report and submit a copy of the court order to the Ministry of Social Affairs. In addition to the Ministry of Social Affairs, foster parents also need to provide a copy to the Regency or City Population and Civil Registration Office. For prospective adopted children who come from orphanages, the foundation must have a written permission from the Minister of Social Affairs. The contents of the permit stated that the foundation had received approval in the field of child adoption activities. The process of determining the status of a foster child in court takes approximately three to four months. The stipulation from district court coincides with a substitute birth certificate which states the child's status as an adopted child of the adopting parent issued by Regency or City Population and Civil Registration Office. Neither party can cancel the adoption status. The entire process of formally adopting a child from start to finish takes approximately two years. [11] 

The process of adopting a child in Indonesia is not an easy matter, there are two decisive stages in it, the first is the process at the relevant Social Service and the second is the process of applying for adoption at the relevant District Court. Both require a lot of time and energy. And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Cara dan Syarat Adopsi Anak di Indonesia Sesuai Aturan yang Berlaku", hellosehat.com., diakses pada tanggal 26 November 2021, https://hellosehat.com/sehat/informasi-kesehatan/langkah-langkah-prosedur-adopsi-anak-di-indonesia/

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

7. Ibid.

8. Ibid.

9. Ibid.

10. Ibid.

11. Ibid.

What Language Must Be Used In The Agreement In Indonesia?

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "Who's Legally Represents The Company In Indonesia?" you may read also "How To Check The Validity of Indonesian Advocates?", "If I Get Fired, What Are My Rights According to Indonesian Law?" and on this occasion we will discuss about What Language Must Be Used In The Agreement In Indonesia?

Nowadays globalization is unavoidable. Human interaction from various parts of the world with one another has become a necessity. Including in doing business, business transactions between countries at this time are something commonplace. As a result, interaction between culture and law becomes unavoidable. On a practical level, foreign investors who wish to invest in Indonesia need a sufficient understanding of local aspects such as culture, language and laws. With an understanding of some of these aspects, it is hoped that future business activities will be smoother.

For example, when a company starts running or when it is already running, it is common practice to enter into business agreements between companies. Loan agreements with banks, raw material supplier agreements with suppliers, employment agreements with employees, and other agreements are real examples that are often carried out. When doing so, companies need sufficient knowledge of the language spoken in Indonesia and the laws that apply in such country. As the title above, on this occasion will be discussed about the law of using Indonesian language/'bahasa Indonesia' in an agreement.

Governing Law

The law related to the topic of discussion in this article is Law no. 24 of 2009 concerning the National Flag, Language, Emblem and National Anthem. Article 31 paragraph (1) and (2) Law no. 24 of 2009 concerning the National Flag, Language, Emblem and National Anthem, stipulates that:

"Indonesian language must be used in memorandums of understanding or agreements involving state institutions, government agencies of the Republic of Indonesia, Indonesian private institutions or individual Indonesian citizens."

"The memorandum of understanding or agreement as referred to in paragraph (1) involving a foreign party is also written in the foreign party's national language and/or English"

What Language Must Be Used In The Agreement In Indonesia?

Thus, the question in this article has been answered, that the agreement made by the company to carry out its business activities must use the Indonesian language/'bahasa Indonesia'. This is as regulated in Law no. 24 of 2009 concerning the National Flag, Language, Emblem and National Anthem.

As a tips, make a contract in bilingual. Make sure that you comply with the applicable laws in Indonesia and also understand the contents of the agreement that binds your company. And also, translate agreements or company documents into the required language for file. For official documents use a sworn translator. And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

Reference:

1. Law no. 24 of 2009 concerning the National Flag, Language, Emblem and National Anthem.

Who's Legally Represents The Company In Indonesia?

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "What Types of Land Ownership May Company Obtain In Indonesia?" you may read also "Principles of Buying Land in Indonesia", and on this occasion we will discuss about Who's Legally Represents The Company In Indonesia?

We assume that when you make the choice to start a business in Indonesia, you understand which sectors are open or closed for foreign investment. In this article, we also assumed that you as a foreign investor have established a company in Indonesia. And to run a company, of course you need sufficient knowledge of corporate law in Indonesia. Or at least, on this precious occasion we will increase lightly your knowledge about company law in Indonesia.

Governing Law

The main sources of law governing limited liability companies in Indonesia are Law Number: 40 of 2007 Concerning Limited Liability Company. In addition, other laws are also regulated, including Law Number: 3 of 1982 concerning Compulsory Company Registration and Law Number: 11 of 2020 concerning Job Creation. Also, various implementing regulations under it.

The Company Organs In Indonesia

To answer the questions referred to in the article, we must first understand the company's organs first. There are three organs in a company, the first is the general meeting of shareholders, second is the board of directors, and the last is the board of commissioner. 

What is the General Meeting of Shareholders? As stipulated in Article 1 point 4, what is meant by General Meeting of Shareholders is the Company's Organ which has authority not given to the Board of Directors or the Board of Commissioners within the limits specified in this law and/or the articles of association.

What is a the Board of Director? As stipulated in Article 1 point 5, what is meant by the board of director is a company organ that is authorized and fully responsible for the management of the Company for the benefit of the Company, in accordance with the purposes and objectives of the Company and represents the Company, both inside and outside the court in accordance with the provisions of the articles of association.

What is a the Board of Commissioner? As stipulated in Article 1 point 6, what is meant by the board of commissioner is the Company's organ in charge of conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors. 

Who's Legally Represents The Company In Indonesia?

Then, who's legally represents the company in Indonesia? To answer this question, we must still refer to Law Number: 40 of 2007 Concerning Limited Liability Company, especially Article 1 point 5, where the board of directors is the one who legally represents the company in Indonesia, both inside and outside the court.

And as a tips, in the practice of corporate law in Indonesia, there are also rules that allow the board of directors to delegate their authority to one or several company employees for certain purposes. This provision refers to article 103, Law Number: 40 of 2007 Concerning Limited Liability Company. And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

Reference:

1. Law Number: 40 of 2007 Concerning Limited Liability Company.

What Types of Land Ownership May Company Obtain In Indonesia?

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "How To Buy Land In Indonesia?" you may read also "Principles of Buying Land in Indonesia", and on this occasion we will discuss about What Types of Land Ownership May Company Obtain In Indonesia?

In this article, we assumed that you as a foreign investor have established a company in Indonesia. It is also assumed that you as a foreign investor have understood the basic principles of buying land in Indonesia. And also assumed that you understand how to buy land in Indonesia. In general, not all types of land ownership in Indonesia can be gain by companies. Only certain types of land ownership are allowed. Make sure the land you have purchased is certified according to the company's needs at the relevant National Land Agency office. 

Governing Law

This law was officially named Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles, which regulates the rights to land, water and air. It also includes basic rules and provisions for control, ownership, use or utilization of national agrarian resources in Indonesia, land registration, criminal provisions and transitional provisions.[1] If we look at Law No. 5 of 1960 in a limited way, in fact the Agrarian Law regulates land law in a narrow sense.[2] Through Law No. 5 of 1960, regulates matters of land use. The land rights regulated in the law include land ownership rights, cultivation rights, building use rights, use rights, lease rights, land clearing rights, and rights to collect forest products.[3] 

Regarding the title of the article here, the law that regulates and relates to the types of land ownership that can be obtained by companies in Indonesia is Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles. Derived legal rules that are directly related to Law No. 5 of 1960 is Government Regulation No. 24 of 1997 concerning Land Registration and its amendments.

Types of Land Ownership

To understand the types of land ownership in Indonesia, we must first understand land rights. What are land rights? According to Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles: "The rights to land as referred to in paragraph (1) of this article authorize the use of the land in question, as well as the body of the earth and water and the space above it, only as necessary for interests directly related to the use of the land within the limits according to This Act and other higher legal regulations". 

In the opinion of the author, 'land rights' are simply a 'power' granted by law to a specific area of land to be used as long as it does not contrary with the law. This means that when a company owns land rights in Indonesia, it has the power to use it for investment and/or economic purposes in general. 

According to Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles, especially Article 16, Land rights include: [4]

1. Right of ownership;
2. Cultivation rights;
3. Building rights;
4. Right to use;
5. Lease rights;
6. Land clearing rights;
7. The right to collect forest products;
8. Other rights that are not included in the rights mentioned above which will be stipulated by law as well as rights of a temporary nature as mentioned in Article 53.

1. What is meant by right of ownership? According to Article 20 paragraph (1) Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles: "Right of Ownership are hereditary, strongest and most complete rights that can be owned by people on land, taking into account the provisions in Article 6". Only Indonesian citizens can have right of ownership. 

2. What is meant by cultivation rights? According to Article 28 paragraph (1) Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles: "Cultivation rights are rights to cultivate land which is directly controlled by the State, within the period as referred to in Article 29, for agricultural, fishery or animal husbandry companies.". Cultivation rights are granted for a period of 25-35 years. 

3. What is meant by building rights? According to Article 35 paragraph (1) Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles: "Building Rights is the right to construct and own buildings on land that is not he/her's own, with a maximum period of 30 years." Can be extended for a period of 20 years. 

4. What is meant by right to use? According to Article 41 paragraph (1) Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles: "Right to Use is the right to use and/or collect proceeds from land directly controlled by the State or land owned by another person, which gives the authority and obligations specified in the decision to grant it by the official authorized to give it or in an agreement with the land owner, which is not a lease agreement, rent or land management agreement, everything as long as it does not conflict with the spirit and provisions of this law".

5. What is meant by lease rights? According to Article 44 paragraph (1) Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles: "A person or a legal entity has the right to lease land, if he has the right to use land owned by another person for building purposes, by paying the owner a sum of money as rent." The mechanism for paying the rent can be done at a certain time or at a certain time of period, before or after the land is used.

Regarding the last two types of land rights (Land clearing rights and The right to collect forest products),  is not close-related to this article, so it will not be discussed further. While regarding 'Other Rights' that are not included in the rights mentioned above which will be stipulated by law as well as rights of a temporary nature as mentioned in Article 53 of Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles will be further subject to discussion. 

What Types of Land Ownership Can Company Obtain In Indonesia?

So, last question, what types of Land Ownership can company obtain in Indonesia? To answer this question, we still have to refer to Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles, especially to article number 16 as mentioned above. 

If we examine further, it is possible that when a company is established in Indonesia, it will be allowed to obtain land rights of the following types: 

1. Cultivation Rights (Hak Guna Usaha/HGU);
2. Building Rights (Hak Guna Bangunan/HGB);
3. Lease Rights (Hak Sewa).

These are land rights that are 'commonly' used in Indonesia by companies. Make sure your company's land ownership rights in Indonesia are in accordance with applicable law. And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Ulasan UU Pokok Agraria (UU No 5 Tahun 1960)", www.rumah.com., Diakses pada tanggal 6 November 2021, https://www.rumah.com/panduan-properti/kenali-uu-no-5-tahun-1960-lebih-dekat-18542

2. Ibid.

3. Ibid.

4. Law No. 5 of 1960 concerning Basic Regulations on Agrarian Principles.

How To Buy Land In Indonesia?

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "Principles of Buying Land in Indonesia" read also: "How To Check The Validity of Indonesian Advocates?" and "How to Obtain Indonesian Citizenship?", and on this occasion we will discuss about 'How To Buy Land In Indonesia?'

We assume that you have understood the basic principles of buying land in Indonesia as previously article published. As a continuation of the article, this article will discuss the practical stages of buying land in Indonesia. According to the author's experience, there are at least 6 stages that must be passed when you are going to buy land in Indonesia. 

The First Stage: Research The Land Object You Are Going To Buy

At this early stage, it is important to research the suitability of the land certificate that you are going to buy with the land that is the object of the certificate. Pay close attention to whether the land certificate you are going to buy is registered in the relevance National Land Agency office. If the land certificate that will become the object of sale and purchase is registered in the National Land Agency, then the buying and selling process can be continued. Pay close attention to whether the data listed on the land certificate that you are going to buy is in accordance with the facts on the ground. Pay attention to the address of the land object that you are going to buy, whether it is in accordance with the facts on the ground. Also pay attention to the land area, whether it is appropriate. Also pay attention to the boundaries of the land that you will buy whether it is appropriate. Also pay attention to other details related to this matter. 

Second Stage: Research The Land Seller

Pay attention to the compatibility between the Owner's Name on the land certificate and the Identity Card of the person who will make the sale. When going to sell land, in general, a proof of payment of Land and Building Taxes (PBB) for the last 5 years is also required. Pay attention to the suitability and compliance of the seller with this tax. In the event that the seller is a married couple, a letter of approval from the spouse is required. Likewise, if someone is divorced, a divorce certificate is needed. Also pay attention to other accessories from the seller such as the Taxpayer Identification Number (NPWP) and other things as details. 

Stage Three: Prepare Your Legal Eligibility As Buyer

As a buyer, you must have considered the economic aspects of buying land later. Things such as access to major roads, distance to the port, availability of adequate electricity, land prices, availability of labor around the land location, calculation of labor wages, availability of production raw materials, security, and other things you must have consider beforehand. After considering the economic aspects of the land that you will buy, then the buyer must prepare himself to be legally eligible as a buyer. It is assumed in this article that the buyer is a limited liability company, not an individual. In such a case, a Company Establishment Deed, Company Taxpayer Identification Number (NPWP), Company Registration Certificate, Board of Directors' Identity Card, and other necessary accessories are required. 

Fourth Stage: Process of Making Sale and Purchase Deed

If the object of land that will become the object of sale and purchase has been examined by you and is suitable for a transaction, and the Seller has also fulfilled the requirements to conduct the transaction and you as the Buyer are also legally eligible to purchase the land, then the sale and purchase process can be carried out. 

If it meets the legal requirements for buying and selling, then The Deed of Sale and Purchase of land must be made by the Land Deed Maker Official (PPAT) and or Notary. The making of the Sale and Purchase Deed must be attended by the seller and the buyer. And at least two witnesses need to be present. The Land Deed Making Officer (PPAT) will read and explain the contents of the deed. If the seller and buyer agree with the contents, the deed will be signed by the seller, buyer, witness and the Land Deed Making Official (PPAT). The deed is made in two original sheets, one is kept by the Land Deed Making Officer (PPAT) and the other sheet will be submitted to the National Land Agency office for transfer of names. Copies will be provided to both the seller and the buyer.[1]

In addition to the components of the basic cost of buying land that you have to spend, please be aware at this stage that both the Seller and the Buyer will be subject to tax on the transaction to be executed. The seller must pay income tax (PPh). While the Buyer is required to pay Customs for the Acquisition of Land and Building Rights (BPHTB). Income tax (PPh) and Customs for the Acquisition of Land and Building Rights (BPHTB) can be paid at the Bank or Post Office. Before the Income Tax (PPh) and Customs for the Acquisition of Land and Building Rights (BPHTB) are paid off, the deed cannot be made. At this stage also consider other costs in detail.

Fifth Stage: Transfer of Ownership/Name to the Office of the National Land Agency

After the Sale and Purchase Deed (AJB) is completed, the Land Deed Making Officer (PPAT) submits the Sale and Purchase Deed (AJB) file to the relevant National Land Agency office for the transfer of names. The files submitted are include: a). A letter of application for transfer of name which has been signed by the buyer; b). Sale and Purchase Deed from Land Deed Making Officer (PPAT); c). Land Rights Certificate; d). Photocopy of the identity of the seller and buyer; e). And other necessary letters. 

After the file is submitted at the National Land Agency office, there will be a receipt that will be submitted to the Applicant. The name of the buyer as the holder of new land rights will be written on the pages and columns in the land book and certificate of ownership, with the signature of the head of the National Land Agency office or the appointed relevant official.[2] In reality, the process at this stage requires its own time. Regarding the process of transfer names at the relevant National Land Agency (BPN), you can authorize someone else to take care of it.

Sixth Stage: Master and Use the Land You Have Purchased

As the final part in the process of buying and selling land in Indonesia, while waiting for the transfer of names at the relevant National Land Agency (BPN), the land that you have purchased can be controlled and used. Present your ownership at the location of the land object that you have purchased. You have been able to do fencing/guardrail on the land that you have purchased. Either on the north, south, east and west sides of the land you have purchased. 

In the next stage, you have been able to build buildings on the land that you have purchased as part of the production equipment you need. At this stage, you as the new owner of the land that you have purchased, have been able to take benefit of it. As a legal practitioner, we recommend that you do Legal Due Diligence (LDD) first before making material transactions such as buying land, this is solely to avoid losses that may be incurred in the future. Related to this, please read our article entitled: "How to Avoid Fraud in Investment by Using Legal Tools". And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Syarat Serta Prosedur Jual Beli Tanah dan Bangunan", www.cermati.com, diakses pada tanggal 2 November 2021 https://www.cermati.com/artikel/syarat-serta-prosedur-jual-beli-tanah-dan-bangunan

2. Ibid. 

Principles of Buying Land in Indonesia

(iStock)

By:

Team of Hukumindo

Previously, the Hukumindo.com platform has discussed about "How To Check the Validity of Indonesian Advocates?", read also "If I Get Fired, What Are My Rights According to Indonesian Law?" and on this precious occasion will be discussed about Principles of Buying Land in Indonesia?

In this article, it is assumed that you already understand which business sectors are open or closed for foreign direct investment in Indonesia. Read the previous article "Latest Negative List of Investments In Indonesia". It is also assumed that you have understood how to set up a company in Indonesia. Read the previous article of Hukumindo.com titled: "Process and Requirements for Establishing a Limited Liability Company for Foreign Investment". And now to run the company that you have founded in Indonesia, you need land as a place to establish a production unit. In this article, we will briefly explain tips so that you are free from legal defects or disputes when buying land in Indonesia. 

The Principle of Buying Land in Indonesia

This principle is important to be used as a guide when you are going to buy land in Indonesia. If applied when you make land purchase transactions as intended, God willing, you will be free from legal defects or disputes afterwards. Or at least, the application of this principles will minimize the negative impact. 

Apply the "free, clean and clear" principles when buying land in Indonesia. What is meant by principles of free, clean and clear here?[1], [2].

What is meant by the "free" principle here is the land you are going to buy is free from disputes. 

What is meant by the "clean" principle here is the land that you are going to buy is not being used for any activity, or occupied by another person or anyone who does not have rights. 

What is meant by the "clear" principle here is refers to the land boundaries that exist in the field according to those in the certificate.

In addition, the author explains here that the "free" principle is related to certainty regarding the suitability of the land you are going to buy with the land certificate. You can check in the field and check with the National Land Agency regarding this. Make sure its suitable. Regarding the "clean" principle here, make sure in the field that the land you are going to buy is not controlled and/or being used by other parties who are not entitled to it. Make sure the land you are going to buy is ready for you to use. And the last, regarding the "clear" principle here, is related to the boundaries of the land that you will buy. Make sure the North, South, East and West boundaries of your land. In the event that the land you are going to buy is properly cared for, usually there is a kind of land stake as a boundary marker for the land you are going to buy. And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Ini Tata Cara Jual Beli Tanah yang Sah di Mata Hukum", www.popbela.com., diakses pada tanggal 28 Oktober 2021, https://www.popbela.com/career/inspiration/natasha-cecilia-anandita/tata-cara-jual-beli-tanah/4

2. "Prosedur Tepat Beli Tanah", www.rumah.com., Diakses pada tanggal 28 Oktober 2021, https://www.rumah.com/berita-properti/2017/6/155415/prosedur-tepat-beli-tanah