Starting a property business in Indonesia is among the hottest things going on in the world of business today. The property and real estate industry in Indonesia has been growing rapidly and is expected to develop even more in the coming years. The statistics have shown that the residential property prices have risen by 0.5% compared to the data of the previous quarter.
Many investors use real estate, especially residential property, to protect their investments against inflation. Indonesia is expected to become the property and commercial hub of the Asia-Pacific region.
In 2018, it was found that among 18 major cities in Indonesia, 17 of them have seen significant rising prices for property.
For example, Jakarta has a strong apartment market: in 2018, the prices rose by 2.1%, hitting US$2,393 per square meter. And in Bali, one of Indonesia’s most popular areas, has its share of property price hike as well.
Furthermore, tourism and property contribute to approximately 80% of the region’s economy.
Keep reading and you will find all the essentials about starting a property business in Indonesia.
Why Start a Property Business in Indonesia?
There are many reasons why investors desire to start their property or real estate business in Indonesia.
One of those is the increasing demand of residential properties especially in the tourist areas, making this market a tempting one for investors to enter.
The second reason for starting a business in Indonesia in the property market is because of the country’s huge population and thus large customer market. Indonesia has one of the largest populations in the world, estimated at 270 million as of 2019.
Therefore, apart from accommodating the international visitors, the demand of housing for Indonesian local people saw a compelling spike – making more investors opening up their own property or real estate agencies in Indonesia.
How to Start a Property Business in Indonesia?
On August 3, 2017, the Indonesian government has issued Permendag No. 51/2017 to replace the older regulation.
This regulation was enacted to grow the property industry particularly the property brokerage company or P4. In Indonesia, the property brokerage businesses can only be performed via a joint venture with a foreign company or by a national investment company.
A property brokerage company in Indonesia must have a minimum of two experts. If it is a branch office, it must have at least one expert. For all these experts, they must acquire the Property Brokerage Competency Certificate before they can do their job at a property brokerage company.
The services of a property brokerage company in Indonesia contain the following, all relevant to property:
- Lease service
- Sale and purchase service
- Marketing service
- Research and assessment service
- Consultancy and dissemination service
Except the branch office, every property brokerage business must have a Property Brokerage Business License (SIU-P4).
Investors must renew their SIU-P4 once every five years by submitting the application through OSS (Online Single Submission System) to the Ministry of Trade.
All applicants must submit the Request Letter (SP SIU-P4) along with other documents:
- Copy of notarial deed
- Copy of the decree for the approval of the company
- A statement letter to prove the existence of the company
- The list of experts (at least two experts)
- Copy of tax IDs of key personnel
- Copy of IDs of key personnel
- Power of attorney
- Two photos each of key personnel
How Cekindo can Assist in Establishing Your Property Business
Cekindo is always proud to be an experienced business setup consultant in the property market. With a team of combined expertise, we are here to transform your entrepreneurial dream in Indonesia into a reality with a clear action plan.
Before starting a property business in Indonesia, conducting market research and finding out what the property market has to offer is critical.
Therefore, Cekindo is ready to provide you with world-class business solutions from the very beginning until the end.
Our mission is to deliver the business ideas you conceive in an outstanding approach and within the legal framework.
Discuss your business plan with us. Fill in the form below now.