Home Blog Due Diligence to Conduct before Buying Land in Bali & Lombok Land Property Ownership | More Services | Secretarial Services Due Diligence to Conduct before Buying Land in Bali & Lombok InCorp Editorial Team 20 January 2020 4 minutes reading time Table of Contents Buying Land in Bali and Lombok: What to Validate Due Diligence with Cekindo Before jumping into buying a piece of land in Bali, Lombok, or anywhere else in Indonesia for that matter, you must conduct land due diligence to at least determine that the land seller is the legal owner and has the sole selling rights. We tell you why. Bali and Lombok have long been desirable destinations for many foreigners to buy land and settle down for good in Indonesia. However, buying a piece of land in Bali means that you will also have to face certain legal risks. Many unforeseen issues can arise and may turn your dream of land acquisition in Bali and Lombok into an ordeal. Most foreigners encounter some common problems while buying land in Bali and Lombok: land-use restrictions, eviction issues, legal owner issues, unnecessary hidden fees, etc. In this article, you will read more about the things you need to validate in your due diligence before closing a land acquisition deal in Bali and Lombok. Buying Land in Bali and Lombok: What to Validate 1. Rightful Owner with Valid Certificate First, you must ensure that the person selling you the land is the correct landowner. Then, you need to identify their truthfulness by asking the landowner to show the updated and valid land certificate; or you can also check the inheritance documents. 2. Tax Payments One of the most critical parts of land acquisition in Bali is to know whether the former owner has paid their land taxes before you finish the transaction. Unpaid taxes mean you will not be able to proceed with anything e.g. acquisition and building permit. 3. Zoning Verification Under Bali’s zoning regulations, commercial activities are actually prohibited in some areas of the island. Therefore, your land could be useless if you have the wrong zoning for your business activities. 4. Building Permit If there is a building on the land you are going to buy, you must also make sure that you possess the building permit IMB. To avoid any litigations, the building’s classification and function must all be in compliance with the zoning laws in Bali. Buildings that do not meet the zoning requirements or do not have an IMB will be demolished by the government. 5. Land Infrastructure and Land Border It is important to determine the land’s actual size as well as whether there are any overlapping property boundaries with due diligence. This gives you a confirmation regarding your land transaction integrity. A tiny overlapping unit can eventually give rise to disputes between the two parties: the landowners and their neighbors. In addition to that, ex-pats are encouraged to check the legality of an access road because some access roads may be privately owned or publicly owned by the local community. This condition can also affect the value of your purchased property. 6. Limited Property Access In Bali and Lombok, it is common that foreigners who purchase a villa will also get usage permission for road access from the previous owner who possesses the land linked to the foreigner’s purchased villa. However, after some time, the landowner may change their mind and would want to collect fees from foreigners for using their land as road access. This can quickly lead to disputes and maybe costly court cases. Thus, foreigners need to know beforehand that road access comes as “free” and is not actually free. Due Diligence with Cekindo It is essential to have a clear understanding of your land acquisitions in Bali and Lombok. Cekindo offers quality due diligence that will help you gain insights into the land value and potential issues, giving you confidence in making a final decision for closing a deal. As a leading land due diligence service provider in Indonesia, Cekindo’s due diligence team is made up of highly-trained examiners to provide you with a detailed analysis of all pertinent aspects of land transaction and ownership. Let our experienced team assist you in buying your prospective land in Bali before making a huge commitment. Reach out to discuss your due diligence needs by filling in the form below. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions Is there limited responsibility for shareholders in a PMA company? In a PMA Company in Indonesia, shareholders typically have limited liability, meaning they’re not personally liable for agreements or losses beyond their shareholding, except in certain circumstances. Liability may extend if the company isn’t properly established or if shareholders exploit the company in bad faith, engage in unlawful acts, or deplete company assets to the detriment of creditors. Can an individual or a business organization be a shareholder in a PMA company, and is there a minimum number required? A limited liability corporation is required by Indonesian company law to have two or more shareholders, who may be either a legal entity or an individual. The foreign investor must find a second shareholder to own shares in the PMA firm for investments that are 100% open, which could be an affiliated party. What are the standard regulations regarding employment in Indonesia? The standard regulations state: Minimum salary of IDR 3.9 mil for the Jakarta region 12-day annual leave (minimum) BPJS coverage Holiday allowance Get in touch with us. 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Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website. More on Land Property Ownership How to Tell if It is Time for HR Outsourcing when Doing Business in Indonesia? Read more 10 Items to Check Before Buying Property in Bali Read more Things You Need to Consider When Preparing a Property Lease Agreement in Bali Read more