Many Modes of Foreign Investment (PMA) in Bali

DENPASAR

Nominee Crisis Working Group of Indonesia (K3NI) estimates the number of foreign investment shrouded in Bali since many years ago until now reached Rp 102,9 trillion.

The data is obtained based on a study of the notary, the property owner, villa management, and online surveys.

The mode used by foreign citizens to invest their funds by cooperating with Indonesian people to be used as a binding agreement with the owner or nominee.

Chairman of Indonesian Employers Association (Apindo) Bali, Panudiana Kuhn urged the government to soften the rules by allowing local residents to get foreign capital so it can be taxed. The reason is that the shrouded capital recently free of tax liability, because it is not tracked by the officer.

“All of them are under name. Actually it is wrong, but the rule for foreign capital in the field is complicated and not easy,” he said.

Panudiana exposed that the foreign capital was largely invested in the sector of tourist accommodation, such as villas and hotel of ‘jasmine’ class. He described that the property that had been built then leased and no taxes to our country.

That kind of practice is exist, because the rules are very strict as prohibiting investment of jasmine-class hotels, so investors have their own faster way.

The Government was suggested to record foreigners who have business in Bali and then turn the permit into easier way to be taxed. Thus, according to him, local residents also be beneficial to obtain working capital due to get credit in the bank is not easy.

He stated the nominee mode is actually violating the rules, but his party could not do much because such practice has been going on for a long time. Besides the foreigners are cooperating with local residents, many of them also decided to marry with local people to run their business.

If they are being recorded, set the permit to be easy, but still under name to be taxed later. This is actually a small business but worth billions, “he said.

Meanwhile, the data obtained from K3NI, estimated as many as 50,000 foreigners who settled officially or semi-formal. The number of properties in the form of houses or villas are under-named by nominee about 7,500 units and an estimated 10,500 land from small area to Ha.

The average value of the property being dominated is around Rp10.4 billion per unit.

Earlier, Chairman of Public Relations Division of K3NI Susi Johnston revealed using the ownership on behalf of local residents is occured because there are foreigners who do not know to invest as well as intentional.

Even though there are requirements that rule foreigners to invest in property, unfortunately, in practice all of the rules contained are not implemented.

As a result the property ownership raises many problems and disputes in the future. In fact, many of the citizens who are bound by the agreement by the nominee must defeat in the trial.

Therefore, he said, the government needs to solve the problems of nominee by giving sunset policy for foreigners to settle the affairs of the ownership of land or property. Because it is predicted that there would be 5 .000 properties units in problem if the nominee issue is still unclear.

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