Background - The purpose of the issuance of Government Regulation Number 47 of 2012 on Social and Environmental Responsibility of Limited Liability Company (“GR No. 47/2012") is to implement the provisions of Article 74 of Law Number 40 of 2007 on Limited Liability Company (“Company Law”) and Article 15 letter (b) of Law Number 25 of 2007 on Capital Investment (“Capital Investment Law”) on Corporate Social Responsibility (“CSR”).

Definition of adjudication based on Article 1 point 8 of Government Regulation Number 24 of 1997 on Land Registration (“GR No.24/1997″) is “activity which is performed in the process of land registration for the first time, including collection and determination of the fact of the physical data and juridical data concerning one or more objects of land registration for the purposes of its registration”.

Corporate Social Responsibility (“CSR”) in Bahasa is known as tanggung jawab sosial perusahaan. Chapter V of Article 74 of the Law Number 40 of 2007 on Limited Liability Companies (“Company Law”) regulates on Social and Environmental Responsibilities, where Companies which perform its business activities in sectors of and/or related to natural resources are required to undertake social and environmental responsibilities.

Share is a proof that shareholders have conducted a full deposit of capital in Limited Liability Companies (“Company”). Shares in Company are classified based on similar characteristics, it is called classification of shares. Article 53 paragraph (1) of Law Number 40 of 2007 on Limited Liability Companies (“Company Law”) states that the Articles of Association (“AOA”) specifies more than one class of shares.

Background - Background or purpose of the issuance of Government Regulation Number 43 of 2011 on Procedures for Filing and Use of Limited Liability Company Name (“GR No. 43/2011”) is to implement the provisions of Article 9 paragraph (4) and Article 16 paragraph (4) of Law Number 40 of 2007 on Limited Liability Company (“Company Law”).

Background - Definition of land registration in Government Regulation Number 24 of 1997 on Land Registration (“GR 24/1997”) constitutes perfection of scope of the land registration based on Article 19 paragraph (2) of Law Number 5 of 1960 on the Principles Provision of Agrarian (“Agrarian Law”) which includes; measurement, mapping, land records, registration and transfer of right of land and granting of evidence instrument of right as strong evidence.

Criminal provisions related to condominium is regulated in Article 21 until Article 23 of the Law Number 16 of 1985 (“Law 16/1985″) on Condominium. Article 21 paragraph (1) of Law 16/1985 regulates criminal sanction, that is stated:

Each member of association of owners and tenants of Condominium units (“PPPSRS“) has rights and obligations in relation to management of Condominium units. This membership is represented by householder and shall become effective since recorded in the list of tenants and/or have been domiciled in Condominium units which held by them in accordance with the applicable provisions.

Background - There are various subject of Applicant in Bankruptcy based on Law Number 37 of 2004 on Bankruptcy and Moratorium Obligation the “Indonesian Bankruptcy Law of Debt Payment. Article 2 of Indonesian Bankruptcy Law states that the request of bankruptcy stipulation may be applied by the Public Prosecutors, Bank of Indonesia, Capital Market Supervisory Board, insurance Company and Minister of Finance.

Background - A Limited Liability Companies (“Company”) may gain their capital by increasing its capital, the process is performed based on General Meeting Shareholder’s (“GMS”) Resolution. According to Article 41 paragraph (2) of Law Number 40 of 2007 on Limited Liability Companies (“Company Law”),

Background - Mechanism of the investment licenses that is applied by BKPM to the investor covers provisions concerning business sector and business entity that could be managed by the investor in the territory of Indonesia. Principally, provisions on the mechanism of the investment licenses apply the same treatment to all of the investors, either foreign investor or domestic investor.

Definition of Limited Liability Companies according Article 1 paragraph 1 of Law Number 40 of Year 2007 (“Company Law”), stated: Limited Liability Company (“Company”) means a legal entity which constitutes an alliance of capital established pursuant to a contract in order to carry on business activities with an authorized capital all of which is divided into shares and which fulfils the requirements stipulated in this law and its implementing regulations”

Background - Mortgage regulated under the Law No. 4 of 1996 on Mortgage (“Mortgage Law”). Under the Mortgage Law, it is regulated that guarantee repayment of debt through mortgage provides a feature which is called the preferred creditor/ kreditur preferen. Preferred creditor is a creditor who has priority/ privilege right more than other creditor for the debt repayment of debtor in the case of failure events receivable.

Law Number 40 of 2007 on Limited Liability Company (“Company Law”) only recognizes the classification of registered shares. However, Article 53 paragraph (1), (2) and (3) of Company Law states that, the Articles of Association may determine more than one classification of shares. If there is more than one classification of shares, then the Articles of Association determines one of them as common share.

Background - Merger is a legal action conducted by one or more company to merge with another existing company causing the assets and liabilities of the merging company transferred by law to the surviving company. Moreover, the legal entity status of the merging company will be ended by law.

Background - International Center for Settlement of International Dispute (“ICSID”) was established on the basis of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1966 (“ICSID Convention“). This ICSID Convention regulates the settlement of dispute between a country with foreign individual or company who have invested their capital in the country, by peaceful means through conciliation or arbitration.

Background BKPM holds 2 (two) types of services on investment activity for the investor in the territory of Indonesia, which is the licensing service and the non-licensing service. Based on Article 1 paragraph 6 of Regulation of Chairman of BKPM Number 12 of 2009 (“Perka BKPM 12/2009”), what is included in the licensing services is any type of agreement to conduct investment which is issued by the Government and local government who has the authority under the regulations.

In Indonesia, regulations concerning Limited Liability Companies are stipulated under the Law Number 40 of 2007 on Limited Liability Companies (“Company Law”), which replacing Law Number 1 of 1995 Concerning Limited Liability Companies. Inside Company law, there are regulations of register of shareholder.

Background Foreign Company Representative Office/ Kantor Perwakilan Perusahaan Asing (KPPA) is the representative office established by foreign company or foreign companies outside the territory of Indonesia with a view to manage the interests of the company or the affiliated companies in Indonesia and/or in other countries and/or to prepare the establishment and development of foreign investment companies in Indonesia and/or other countries.

Background Referring to Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”), particularly Article 10 paragraph (1), it is stated that the granting of mortgage is preceded by a covenant to provide mortgage as the security for settlement of certain debts, which is set out in and as an integral part of the debt (loan) agreement concerned or other agreement which causes such debt.

Introduction As we already have known, according to Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”), the granting of mortgage is conducted by making the Deed of Granting of Mortgage (“Deed”) by the Land Conveyancing Officer (“Pejabat Pembuat Akta Tanah/PPAT”) in accordance with the prevailing laws and regulations.

To maintain the sustainability of the national economic development, it needs large amount of funds. The more increase of development activities, the more of the needs of availability of funds, whereas such funds are mostly obtained through credit financing activities.

Mortgage (hak tanggungan) of land is a security right over right(s) of land, along with or without other properties that constitute a unity with such land, for the settlement of certain debts, which gives the preferred position to certain creditors against other creditors (“Mortgage”).

Background: A condominium is a building built in an environment which is divided into parts that are functionally structured horizontally and vertically and consisting of units that can be owned individually and can be used separately, particularly for residence, which is completed with common equipment, common facility, and common land.

In order to implement the provision of the granting of rights of land in accordance with Law Number 5 of 1960 on Agrarian Principle Regulation (“Law No.5/1960”) and Government Regulation Number 40 of 1996.

Background: Construction service is one of the activities in the field of economy, social and culture which has important role in the achievement of various objectives to support the realization of the national development goals. Therefore, the implementation of construction services needs to be regulated to carry out the orderly of the construction work.

In densely populated urban areas, where available land is very limited, it is necessary to develop residential in the form of strata title to provide a complete, balanced, and harmony with its surroundings.

The Law Number 40 of 2007 on Limited Liability Company (“Company Law”) regulates the provisions about one of the most important organs of the limited liability company (“Company”), that is, Board of Directors (“BOD”) and Board of Commissioners (“BOC”).

To create an order in the investment activity, the authorized body needs to set out a line of licensing process before an investor could conduct the investment activity in the territory of Indonesia. Investment Coordinating Board (Badan Koordinasi Penanaman Modal) (“BKPM’) introduced a system, namely Integrated One Door Service (Pelayanan Terpadu Satu Pintu) (“PTSP”) whereby investors can enjoy certain facilities.

Construction service is one of the activities in the field of economy, social and culture which has important role in the achievement of various objectives to support the realization of the national development goals. Therefore, the implementation of construction services needs to be regulated to carry out the orderly of the construction work.

In establishing a Limited Liability Company (the “Company”), the Company shall have deed of establishment to obtain the status of legal entity from the Minister of Law and Human Rights (“Minister”).

In the limited liability company (“Company”), capital is the primary factor which allows the Company to conduct their business activities. The Law number 40 of 2007 on Limited Liability Companies (“Company Law”) has set out the provision on the company capital.

Practically, in Indonesia, Limited Liability Company is the most common form of business entities. Therefore, it is necessary to arrange laws and regulations concerning the Limited Liability Company as set out in Law Number 1 of 1995 on Limited Liability Company (“Law 1/1995”), which has been replaced in 2007 because it was no longer suitable for the developing economy in the Republic of Indonesia.

Based on Article 8 paragraph (1) of Law Number 40 of 2007 on Limited Liability Company (“Company Law”), it is stated that a deed of establishment must contain the articles of association (“AoA”) and other information in relation to the establishment of the Company. AoA is the document that contains the internal regulations and the management of the Company.

According to Article 41 of Law Number 5 of 1960 on the Principles Provisions of Agrarian (“Agrarian Law”), Right of Use means right to use and collect the production over State Land or land which is owned by private parties.

As we all know, earth, water, and natural resources contained therein controlled by the State and used as much as possible for the prosperity of the people (society). Land and buildings that build on it, in addition to fulfill the basic need, is also constitutes as profitable investment equipment. In other words, land and building have economic value.

According to Article 41 of Law Number 5 of 1960 on the Basic Principles of Land (“Land Law”), Right of Use means right to use and collect the production over State Land or land which is owned by private parties.

Nowadays, there are various kind of companies established in Indonesia. In term of construction, these companies require a building located on a land. Therefore, according to Law Number 5 of 1960 on the Principle Provisions of Agrarian, there are several rights over land. One of these rights over land is the right to build which can be defined as the right to establish and own a building on a land.

Article 7 paragraph (1) and (2) of Law Number 16 of 1985 on Condominium, the developer (the “Developer”) may build a condominium over the land with Right of Management (Hak Pengelolaan) (“HPL”). HPL is a right to control, given by the state which the implementation is delegated to its holder. Rights of land that may be granted over the HPL land are Right to Build (Hak Guna Bangunan) (“HGB”) and Right of Use (Hak Pakai) (“HP”).

According to the Regulation issued by State Minister for Public Works Number 28/PRT/M/2006 Year 2006 (“Minister Regulation”), it is allowed for the representative of foreign construction legal entities (“Foreign Entities”) to conduct their business in Indonesia after fulfilling some requirements.

On 12 January 2011, the Government issued the Law Number 1 of 2011 on Housing and Habitation (“Housing Law”). By the issuance of this law, the existed law on housing Number 4 of 1992 has been revoked. This new Housing Law is divided into 2 (two) parts i.e. housing and habitation. The purpose of this Housing Law is to fulfill the public needs for housing.

The illegal occupancy of land is not a new event in Indonesia. The terms illegal occupancy can be interpreted as the act or condition of holding, possessing of rights or assets illegally, such as occupying a land or house, which is not belong to him, illegally (which is forbidden by law). The illegal occupancy of land is an unlawfully act that can be classified as a criminal offense. As we know, the prices of land are very stable and continue to rise along with the times.

Basically, the development for industrial area is required to support the economy in a country. If one country has well maintained industrial areas, it can be the supporting factor for the investor to make their investment in those areas.

Indonesia’s high population growth rate has increased the housing needs of the people. Urgent needs of the available units of house often results on the sale and purchase of the house which is still in the planning process and it is giving rise to the sale and purchase through reservation. Therefore, as a result of it, the sale and purchase of house is conducted through a preliminary sale and purchase arrangement.

On 23 August 2010, the Minister of Health has issued the Decree Number 1195/MENKES/SK/VIII/2010 of 2010 on the Accreditation Agency for the Hospital with International Quality Standards.

The building has an important part as the place for human being to conduct their daily activities. The regulation on the building is the Law Number 28 of 2002 on Building (the “Building Law”).

Construction services hold a very important and strategic role in achieving various aims in order to support the objectives of national development to realize a fair and prosperous society both materially and spiritually based on Pancasila and the 1945 Constitution. Therefore, it is necessary to arrange a specific regulation of construction services, which is now set under the Law Number 18 of 1999 on Construction Services (“Construction Services Law”).

As the capital city of state of Indonesia, Special Capital Region of Jakarta is a center of economic and trade center in Indonesia, which located in the west island of Java.

The interest to live in the condominium tends to increase particularly to people who live in the big cities. According to Article 7 Law Number 16 Year 1985 on Condominium, it is stipulated that the condominium can only be constructed over land of Right to Own (Hak Milik), Right to Build (Hak Guna Bangunan), Right to Use (Hak Pakai) on State Land or Right to Manage (Hak Pengelolaan).

Overview of Post Notification for Merger, Consolidation and Acquisition.

Formerly, investment law was regulated in two different regulations. The Law No. 1 of 1967 on Foreign Capital Investment as amended by Law No. 11 of 1970 on the Amendment and Supplement to the Foreign Capital Investment Law No. 1 of 1967, and Law No. 6 of 1968 on Domestic Capital Investment as amended by Law No. 12 of 1970 on the Amendment and Supplement to the Domestic Capital Investment Law No. 6 of 1968.

On January 2010, the Business Competition Supervisory Commission (Komisi Pengawas Persaingan Usaha - “KPPU”) issued Regulation No. 7 of 2010 on the Guidelines of Interlocking Directorate (the “Guidelines”). Interlocking on directorate was formerly stipulated in Article 26 on Law No. 5 of 1999 on Prohibition of Monopolistic Practice and Unfair Business Competition (the “Antimonopoly Law”).

The Law No. 24 of 2009 on Flag, Language, State Symbol and also National Anthem (“Law No. 24 of 2009”) has been ratified on 9 July 2009. This law basically regulates the technical and the practical use of Indonesia National Flag, Language, Symbol, Anthem and any other national attributes and also the penalty of any misused towards them.

Regulation of Minister of Energy and Mineral Resources No. 28 of 2009 on The Conduct of Mineral and Coal Mining Services Business (the “Minister Regulation”) is issued in Jakarta on September 30, 2009. This Minister Regulation is the implementing regulation of Article 127 of Law No. 4 of 2009 on Mineral and Coal Mining (the “Mining Law”).

Formerly, mining was regulated with Law No. 11 of 1967 on Basic Regulation on Mining (“Law No. 11 of 1967”). But with the highly development of mining, nationally and internationally, Law No. 11 of 1967 is no longer suitable with the conditions nowadays. That is why there is the need for changes of regulation on mineral and coal mining which could manage and utilize the potential of mineral and coal in Indonesia and could ensure a continuous national development accordingly.

A life in condominium is different from life in ordinary house. Tenants not only have next door neighbours but also have upstairs and downstair neighbours. In condominium there is also a governing body that regulates the management of the condominium environment, maintenance and the construction of environmental infrastructure and social facilities for the purpose of living together with all tenants in condominium.

Housing and residence are every human being basic needs. With the increasing number of inhabitants, the land space provided becomes very limited. Because of that, houses are made in a multistory structure or commonly known as condominium (rumah susun).

The purpose of the Government Regulation No. 41 of 1996 (the “GR No. 41”) is to give a legal certainty for foreigners who own property in Indonesia. Foreigners who are domiciled in Indonesia are foreigners who give benefits for national development.

Indonesia as a developing country is one of the investment destination for developed countries to expand their global business activities. That is why more foreigners domiciled in Indonesia to do their business. However, there are boundaries or conditions for foreigner to own a residence especially a strata title, which is going to be discuss further here.

Batam has a strategic geographical location as the closest island to Singapore and Malaysia, which strategically located in the international shipping route. As the special zone for multinational trade area, Batam has a special treatment from the Government of Indonesia.

Condominium is a multistory building for residential purpose, which every unit of it can be owned separately. As a residential building that can be owned separately, tenants of condominium have boundaries in making use of spaces and facilities inside of condominium. In a condominium there are common equipment, common facility, and common land.

Not all land has a pure rights over land. There is a Right to Manage (Hak Pengelolaan Lahan – HPL) over some lands, like in some areas in DKI Jakarta, for example Senayan, Kemayoran, Pulomas, etc.

A life in condominium is different from life in ordinary house. Tenants not only have next door neighbors but also have upstairs and downstairs neighbors. In condominium there is also a governing body that regulates the management of the condominium environment, maintenance and the construction of environmental infrastructure and social facilities for the purpose of living together with all tenants in condominium.

Buildings are made to support people’s need of spaces. Building has many functions such as work space, business place, education place, recreation place and many more. In developing countries, especially for small countries, building is used to maximize the use of spaces.

This overview is describing the fundamental concepts of agrarian law in Indonesia. It will also relate to any aspects of real estate project because they all derive from agrarian law. This article also explains the strata title concept. The intent of this article is to give legal highlight for the foreigner or foreign entity who wishes to own or build the real estate project in Indonesia.

Superblock is developing largely in Indonesia nowadays. Almost all property conglomerates are starting their prominent project of superblock over large cities in Indonesia. There are certain legal aspects that a developer needs to be aware of in order to be successful in the building and managing of the project. This article is best for a property developer, especially foreign property developer that is already establishing its entity in Indonesia or is intending to do so in the near future.