Recently we've seen a lot of stories in the local press, social media and so on related to the Indonesian government's enforcement of regulations, not just in the property industry but in anything related to permits and zoning.

Specifically for the property industry, owners now find themselves in a situation where they're being visited by various government agencies, checking permits of wells, Gensets, operational licenses, build permits (IMBs) and underpayment or no payment of taxes.

And in many cases owners simply don't have many or any of the permits they need. This could be due to several reasons or a combination of them.

1. First and foremost is because the owner didn't know they actually needed one. Please note here that ignorance is no argument under Indonesian law.
2. Secondly, consultants and agents have told them there's no need to worry. Again ignorance is no argument.
3. Third, permits, papers, proof of payments and so on, are not duly registered and even in several cases not even genuine.
4. And finally, proper advice hasn't been available or forthcoming. This is often down to investors choosing to shop around for what they want to hear, not what they need to hear.

It's been more than 5-years since we started to openly say and publish things like this would happen; tax amnesties and enforcements, clearly stating nominee structures are illegal, and now permits. We estimate there are thousands of property owners and investors out there who have unwittingly, in many cases, used the nominee structure who will have face the reality that it’s essentially illegal and they will need to restructure their investment to be in accordance with regulations.

I believe it's all part of the process a country must take in normalizing itself and stepping up to its greatest potential. We should all be supportive and positive about this, as it will lead to a better, larger and more transparent investment environment.

So what should property owners and investors do?

• Educate yourself as to what you need and don’t need.
• Consider engaging a reliable consultant to help you identify all aspects and structures.
• Contact and engage with the various government offices and institutions. Believe it or not they are there to help.
• Be cooperative with the agencies and show that you have the best intentions at heart.

From us at Harcourts Seven Stones we are here to help and point you in the right direction. Reach out and let us know how we can do that for you.

You can contact Terje Nilsen for advice and consultations via the contact details below.

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