Property investment potentials in Indonesia have attracted not only local investors, but also foreign investors, whether individuals or companies. Lombok, especially, is one of the hottest islands to place property investment plan, especially holiday and hospitality properties. While the nearby Bali is always interesting for holiday property investors, Lombok has entered the spot where it should be considered more.
Why Should I or My Company Investing in Lombok?
There are many reasons why you or your companies should consider investing for property in Lombok, especially those who run hospitality, holiday accommodation, restaurant, and entertainment businesses. Here are some things to consider:
• Lombok has slowly become more recognized in the past decade, and has been promoted as ‘the new Bali,’ which offers many places that are still unexplored and pristine.
• Lombok has grown in popularity among beachgoers and surfers, especially since Lombok also has many unexplored or pristine beaches with really great waves.
• Lombok government is in efforts to increase local revenues by attracting tourist and investors, which means that the investment climate is quite positive for many years to come.
• Lombok has been more accessible with the newly built international airport; plus, the availability of cheap airlines has enabled more people to go to Lombok, opening even more investment opportunities.
With these amazing possibilities and potentials, Lombok has become favorite place to invest among individual and group investors. Also, many companies have started to build resorts, hotels, restaurants, bars, salons and other services in some areas, to attract more visitors and finally more revenues. This is a great opportunity if you have company and want to invest in Lombok.
But, there is some hassles that you must pass if you want to get property in Indonesia as individuals. If you have an experience before, you will see that there are several requirements of foreign investors to own full property title in Lombok and Bali, such have to be partner with nominee and lawyer. However, Indonesian government has Penanaman Modal Asing (Foreign Investment) or PMA, which is included a scheme governed by law that regulated foreign investment and investor acts to open business in Indonesia.
Lombok government expects more investors to come and provide more facilities as well as employment opportunities, and therefore, foreign companies can invest for Lombok property even without any partners, representatives, or nominees. The company just needs to hand business plan, proposal, and other required documents, and fulfill all formal requirements before being allowed by the state to get property.
This is definitely a great opportunity for foreign investors to get more profits from Lombok property and provide more contributions and job opportunities for the local. By opening business in Indonesia and buy property in the name of the company, investor can get their dream property in Lombok or Bali, and they can get it without have to deal with extra hassles of nominees and lawyers.
Basically, PMA is the official name of foreign investors that open business in Indonesia. If you are a big-scale investor with big capital and business plan, using PMA scheme is the best and most profitable way to get property in Indonesia, including in Lombok.
What to Prepare for PMA Scheme
If you are a foreign investor interested in buying Lombok property and you want to buy it under the PMA scheme regulated by Indonesian government, you must make sure that you provide:
• Good and concise business plan with profit projections, business goals, business schemes and other required information.
• Proof and documents about how you(your) business plan will help contributing to surrounding communities, such as in relation with employment, life quality, local investment scheme, and national revenues depend on how big your company is.
• Proof that you have deposited certain amount of money in the reputable bank.
• Other formal requirements as requested by local and national governments, depend on what kind of business you have.
You also have to provide other requirements such as formal documents that are essential in forming new foreign investment or business. Usually, a foreign business can be officially called PMA after 3 or 4 months of period after taking care of all requirements.
Why Following PMA Scheme for Lombok Property Investment?
If you follow PMA scheme, you will be able to own a property in Lombok or basically any other location in Indonesia, in which your company or business becomes the official holder or the property title. This is a great option if you plan to spread the business operation to Indonesia, or if you plan to work and stay in Indonesia, or if you do not want to have partnership and other hassles when owning property in Indonesia.
What if I want to Invest as Individual?
Owning a property in Indonesia, especially in potential holiday development area like Lombok, is a great investment if you plan to start a business here.
PMA is one of our suggestion if you want to invest as company. But, if you are one of the individual investors, leasehold transaction may be one of the best methods to gain full title of the property.
Leasehold transaction gives individual investors the right to own full property title, without having to follow Foreign Investment scheme stated by Indonesian realty law. In this case, the investor does not have to own a business in Indonesia or open a company in this country with proposed business plan. Also, this plan does not require individual investor to have nominee or representative that will give the property title through legal steps after the investor buying the property.
Leasehold transaction works like this: once the investor buys the property in Lombok or Bali (or basically any other areas in Indonesia), they can put their property in lease for up to 25 years. Of course, during that time, the owner cannot actually use the property personally, but the owner can have full title of the property without having to go through legal steps with lawyer and nominee (representative).
Benefits of Leasehold Transaction
In Indonesia, foreign investors who want to get any property (including in Lombok) must do it through nominee to get full property title, in which the nominee get the title first during the transaction, and later hands it to the owner rightfully and legally through lawyer as witness. This means extra time, cost and hassle for the owner to get full ownership of the property. Leasehold transaction helps to get the title without having to go through nominee and lawyer.
Also, since the property owner must put the property on leasehold, it is great for property buyers who aim for passive income. Investors can get steady income from people who rent or lease the property, and after certain amount of time, investors can finally gain their property titles back as individual owners.
If you are a foreign investor and wish to have property in Lombok or Bali, but want to keep the property title fully without using any representative, then you should consider this leasehold transaction.
So, are you interested in investing in Lombok and Bali areas right now? If you are, you need to consult with reputable realty service from Indonesia.
Why You Need Realty Company Service for Property Investment
If this is your first time buying property in Indonesia, you will need help from reputable institutions that can guide you through all legal and formal aspects of purchasing until you can get the property title in your hold. Or, if you are a business owner, you may want to avoid problems since the beginning by property conduct all formal steps and requirements necessary to obtain Lombok or Bali property. However, there are other aspects in which realty service in Indonesia will be necessary.
In Lombok and Bali, many land owners use traditional rules to manage their lands. In Lombok, for example, there is the term of ‘Pipil’ or unregistered land that has been passed from generations. Pipil land owner must converse the land first before being able to sell it; a process that takes about 1 year before the investor can get the full title of the land. These aspects have been understood by realty service, and they will help every investor getting the property in pleasing ways.
Asking for help from Indonesian realty service also means that you can get extra recommendations about Lombok or Bali property from it, especially if you never buy one before. Remember, Bali and Lombok are popular so you need to pick the right time and price to get a piece of land or property. Realty service with good knowledge about property trend in Indonesia will help investors earning future profits by choosing the right property or land. This is why that the cost for realty service is just like small investment for the big one.
What is Pipil Land
In Lombok, Pipil term refers to a piece of land that has been passed down from generations, which has happened in a long period that the current owner usually does not have the official registration certificate. Therefore, it can be a real slow process for the investors if they want to buy the land, even if the land owner agrees with the price. There are certain amounts of period both parties need to set everything up before the land can be sold.
First of all, the original land owner must apply for formal registration certificate at Indonesian Land Office, as this is a formal requirement needed to prove the identity and documentation of the land as well as converse the land status. This process can take up about 3 to 4 months long. However, as for the actual purchase, it can happen at least 12 months after the official conversion (which is, after the official certification is released). This means that any investors that want to buy a Pipil land must prepare extra time.
Pipil Conversion and Benefits of Getting Lombok Property
Many potential property investments in Lombok are in the shape of lands, not buildings. These lands are waiting to be converted into hotel, resort, surfer’s cabin, and many more. Buying only the land gives investors more freedom to build the dream property. However, since Lombok is still thick with tradition, investors must follow the tradition, including waiting in certain periods of time when buying any Pipil land.Despite having to wait for land conversion if you get Pipil land, the benefits of this investment are numerous.
Whether you want to hold property title as individual, leasing the property through leasehold transaction, or following PMA (Foreign Investment) scheme, realty service helps you going through all legal matters and documents.
Lombok is one of the hottest spots in Indonesia to own property, especially holiday season. However, foreign investors also need to remember that many people in Lombok have their lands according to traditional rules, which can be perplexing and confusing for people who is not local.
Fortunately, Indonesian realty law also covers everything all foreign investors must know about dealing with traditions related to land selling and purchasing, including Pipil land. If you need anymore information about Lombok, how to Invest, what it needs, don’t hesitate to ask us or visit our websites. We would be pleased to answer all your question.
Have a Good Day!