Terje Nilsen, director of Ray White Paradise, a leading property in Bali, discussing what's hot in the property Bali and beyond.
We are about six months into the new Indonesian government under the chairmanship of Joko Widodo (aka Jokowi). As seen, after many national elections, Indonesia and business communities have experienced a period of "wait and see what happens." An impressive aspect of the new cabinet is that their planning and execution was by far the most positive drive and energy in Indonesia has ever seen. The wait and see period seems to have consolidated and the domestic market is back on solid investment in property, supported by the fact that Indonesia is now 10 e the largest economy in the world, set to hit 7 e largest in 2030.
Bali is seeing a growth in tourism and ended 2014 with about 15% of overall growth in domestic and foreign markets. So far this year the trend continues.
The growth of the tourism industry is also reflected in the growth of the real estate market. As stated in a recent study by Knight Frank, Bali is now ranked third in the world in terms of capital gain, and it is expected that domestic and foreign investors will continue to invest in Bali. Note that the hospitality industry respected consulting firm, Hospitality Global Services (HVS), which make them tourism conference per year in Indonesia, last year moved the event in Bali, attracting hundreds of investors station .
Buy Residential property / semi-residential
If one is looking to property for residential or semi-residential, should set up a Hak Pakai title (housing for foreigners) and a permit permit / residential work. This can be achieved by companies specialized in this activity. There is no set time restrictions must go to Indonesia, and the property can be sold and inherited at any time.
Investing in real estate
When setting up for investment, you need to investigate what the law says negative investment in each business flow. For three-star resorts and upwards, there is no restriction and a company can be 100% owned by foreigners. For a two-star, 51% may be held abroad. One option here is to put up a nominee company structure, where a company owns 49% of the shares on your behalf - that would be an Indonesian entity 100% owned, and as long as taxes are paid, this is a very safe way to invest. The structure would be applicable for restaurants, sightseeing tours and other tourism-related businesses.
A 100% foreign company was recently approved by (Indonesia Investment Coordinating Board) BKPM with its sole purpose to buy, sell and rent property in Bali. Some of these professional companies also take a step further structure where an LDC foreign owned 100% (or other appropriate) is set up and entered into a nominee agreement with an Indonesian person - the legal structures both entities are Indonesian.
Ultimately, all these structures are safer for foreign investors in relation to the structure of the most questionable candidates, and also secures the sole purpose of the Indonesian government to collect more taxes. Recently, BKPM completed over 6000 PMA companies set up between 2007 and 2012 with no activity reported in this period. At the same time, BKPM approved and opened many new businesses, once they had the correct structures. BKPM also promised to relax more about the regulations for foreigners -. Although trade flows and to what extent remains to be seen
The future of tourism
It is clear that in the very near future, Indonesia will open up many new areas for tourism. For some time now it has been based in Bali, with some overflow into emerging areas. A good example is Lombok, where growth has been held back for years by the inability to attract and support this overflow. Now with separate drive to promote tourism, the growth of Lombok is coming, and it's coming fast.
Does it happen? I believe him. If these areas together with the central government to create a director and market level to national and international investors, it will happen.
What would the investors see? Much cheaper land prices than anywhere. In major markets such as Europe, it is about the same travel time as it is in Makassar to Male in the Maldives, and Asian markets much closer.
Infrastructure to Support Tourism
Over the next two to three years, the airport of Makassar will be twice as large as the Ngurah Rai airport in Bali and able to process 50 million passengers annually. Then to reach areas such as Wakatobi, Selayar and Raja Ampat, travelers can take small planes from the sea and speed boats, arriving in 1-2 hours.
Singapore sees only about 20 million tourists a year, which is a good start for a market. Maldives now has 1.2 million visitors and saw over 130 hotels built since the late 1970s Whether tourists who want to visit Bali do, but create a new dream destination and Indonesia have no difficulty reach its optimistic tourism growth objectives.
For contact, please e-mail: terje@raywhiteparadise.com