selling well.

A recent interview with a Finnish newspaper

 

Somewhere in Bali

Why and when did you leave Bali?

I left Bali three years ago, my reasoning was pretty simple. I had spent eight or so years living on the island and I found myself becoming increasingly annoyed by the small stuff, the traffic, the rip offs etc. No matter how beautiful the place, when that starts to happen, it’s probably time to move on.

What did you do for living in Bali?

While I lived in Bali I was involved with a development company. Most of my work was done within the marketing side of the business.

How long did you live there?

Eight or so years, but I travelled back and forth regularly before that.

Are your brothers still living there? How many of them?

My brothers no longer conduct business in Bali; my family visits the island occasionally for holidays.

Where are you living now?

I now live in Thailand, there is a similarity that I’m used to, and I could not give up on South East Asia altogether.

Would you consider Kuta area as a dangerous place to visit?

Like most places in the world Kuta is as dangerous as you want to make it. I would advise any person that is thinking of traveling to a foreign country to keep their wits about them and to understand the environment they are entering into.

Indonesia is a very large country and there are people that travel to Bali seeking vulnerable tourists. That said most high profile tourist destinations seem to attract a criminal element.

How does the criminality in Kuta show on everyday life of an average tourist?

Most of the criminality against tourists is generally small scale, rip offs, over charging, pick pocketing, villa break-ins, etc. However, problems with violence do sometimes occur along the nightclub strip in Kuta.

In your advice, how can tourists avoid the problems?

  
My advice would be to never become in involved with in an altercation with the locals or any nightclub security staff in Bali. I have seen a lot of tourists get hurt this way. I would also only carry small amounts of cash and a cheap phone on any night out.

Is there a lot of criminality in other parts of Bali than Kuta also?

Kuta would be the hub of criminality in Bali, that said it is a small island and most of the bad element lives in the capital Denpasar.  The criminal element then travel to Kuta, Seminyak, Sanur, and other tourist destinations. The distance between these places is relatively short.

Can the police be trusted? Are they only corrupted or also straight involved in criminal activity?

It is always wise to have some money in your wallet if you intend to trust the police.

Can you trust anyone there? Locals or westerners?

Most Indonesians are good people that will do anything to help travellers in their country. Unfortunately there are also a small number of people that cannot be trusted. I guess it comes down to the individual judging the person they are dealing with.

Are all the gangs locals or have the western people formed those too?

A few western motorcycle gangs are moving into Bali, but at the moment the locals have most of the control.

What's the difference between a local and an expat criminal?

The local will generally have relatives or they will know somebody with connections. The local will generally win most disputes. 

How can an average tourist spot a scam? In other words, how not to get screwed?

Do due diligence, check everything twice or three times, and always hire an outside source to go over any paper work before signing. Never accept the lawyer or Notaris that is offered to you in any land deal.  Sometimes it helps to ask someone who has lived in Bali a long time to recommend a trusted lawyer or Notaris.

You've probably seen a lot of other destinies like that? Is it very common?

Bali has its own uniqueness but most places in South East Asia, if not the world, have their problems.

What about the good sides of Kuta / Bali?

I would not have been able to live in Bali for eight years if it didn’t have a good side. When I wrote Bali Raw I had grown weary of all the wonderful things that were being written about Bali. I wanted to level the scales slightly, tell people about the other side of Bali.

What's your upcoming book about?

I have written another book about Bali that will be published soon, I am also close to completing a book about Thailand, but at the moment most of my focus is on screenplays. 

I have completed  two screenplays at present. One script is based in Cambodia and it is titled, ‘No Negotiation No Ransom’ it is the true story of an Australian who was kidnapped by the Khmer Rouge in 1994. 

The other is a horror/comedy titled Dog House that was written for the American market. I have recently started another about the Bali Bombings that is loosely titled, Heroes.

Anything else you'd like to say about Bali?

Not really, I hope I said everything that needed to be said in my two books.

Property Ownership in Bali

 Freehold Methods

1: Hak Milik (the term for freehold title in Indonesian language) using Nominee structure

This is a contractual agreement - in this case between a foreigner and an Indonesian national whom he nominates to hold the Hak Milik title (on his/her behalf). This structure typically has several agreements (such as right to use and right to sell) as well as a mortgage agreement which states that the Indonesian nominee has borrowed the money in order to buy the property. This method has been used for many years now and a clear process has now evolved with legal precedents being established.

Simultaneously to acquiring the land, the Indonesian individual completes three additional agreements with the foreigner:

a: A loan agreement acknowledging that the foreigner has lent to the Indonesian citizen the purchase price of the land. This is then registered on the land exactly the same as a first mortgage or caveat. This is then noted on both the title at the Land Department and the copy held by the owner. There can be no dealing in the land until the loan agreement is cleared from the title. With the foreigner's loan details registered on the title, it also prevents the reissuing of new title deeds (due to "lost" title deeds) without the foreigner's consent.

b: An irrevocable power of attorney is signed giving the foreigner complete authority to sell, mortgage, lease or otherwise deal in the land. Without notice to the Indonesian Citizen, the foreigner can sell or otherwise deal in the land.

c: A permanent right of use agreement is completed, giving the foreigner rights to use and occupy the land.

To cover the event of death of the nominee, the Power of Attorney is drafted in such a manner so that the governing conditions are passed on to the heirs. In the event of subsequent dispute with the nominated Indonesian, the Power of Attorney allows the foreigner to sell the land to another Indonesian.

2: Corporate ownership

A foreign investment Limited Liability Company incorporated in Indonesia is commonly known as a PMA. All Indonesian companies whether they are Indonesian-owned or are foreign invested, are allowed to hold a 'Right to Build' title called Hak Guna Bangunan (HGB). In this case the freehold title (Hak Milik) is relinquished to the state and the company is given possession of the property under a right to use title (normally) granted for a period of 30 years with rights of extension (+20 + 30 years) - each extension subject to tax.

3: The 'Right to Use' (Hak Pakai)

Hak Pakai means "Right of Use" and works a little like a lease but is different in that the Hak Pakai certificate of title can actually be issued in the name of the foreign owner and the owner's interest is noted as an encumbrance on the Hak Milik title, unlike a leasehold structure.

The freehold Hak Milik owner grants the purchaser a Hak Pakai title of an initial 25 year term with a pre-determined amount of fixed term renewals. However, this has been a bone of contention with regard to the legalities of issuing such renewals and legal opinions vary on both the amount of renewals promised and the length of term of such renewals. As a result we are hesitant to recommend this variation of ownership.

 

Leasehold (or Hak Sewa)

This is a contractual agreement between the land owner and the foreigner. While leases are often notarized documents they have no official record of existence in the National Lands Department. As such there can be difficulties in enforcement when there are conflicting documents or multiple lease agreements.

A Typical Transaction

The following summary outlines the essential steps involved in a foreign investor transacting a Hak Milik ("Freehold Title") property in Indonesia.

Phase A- Due Diligence

The Notary initially checks all aspects of the Hak Milik property and advises in relation to any impediments to acquisition of the Hak Milik property.

Phase B - Hak Milik Transfer

Should the foreigner decide to proceed on the basis of the favorable outcome of the due diligence, the Indonesia Hak Milik owner executes with the nominee/designee of the foreigner, who must be an Indonesian citizen, either:

(a) an Akte Jual Beli ("AJB" or "Sale and Purchase Agreement") pursuant to which 100% of the purchase price is paid; or
(b) a Perjanjian Pengikatan Jual Beli ("PPJB" or "Agreement Binding for Sale and Purchase") pursuant to which a deposit is paid subject to payment of the balance of the purchase price. The deposit is generally not held by a stakeholder but is typically paid to the vendor.


Phase C - Power of Attorney etc

See  Freehold Methods. 1a, b and c above.

 Note: These laws were in place four or five years ago and some may have changed. Please also note that I did not write the above and so I take no credit for its production. It is in fact an old work document of mine that I found in my computer. Recently somebody asked me for information and I thought it may help anyone thinking of purchasing property in Bali.