Many people have chosen to start a business of their own in Indonesia. Those who do so ought to be aware of the rights which they are accorded. Such rights are provided by the Indonesian government to facilitate the development and growth of the Indonesian economy through increased business ownership and activity. Business owners in Indonesia ought to know their rights in order to defend themselves against unjust or illegal actions which may be taken against their person or business. However, not all business owners in Indonesia fully understand what rights they have as one and how they may use such rights. It is important for them to know about these rights because knowledge of their rights as a business owner will make their business more successful and marketable in the eyes of the public. Thus, this article contains information on the rights held by all Indonesian business owners.
Land Use and Ownership Rights
There are several laws in Indonesia which govern the use and ownership of land for business purposes in Indonesia. Chief among these is Act No. 5 of 1960. This law specifies the details about rights related to leases of land, building rights, cultivation rights, and rights related to use of land.
Any business owner, representative office, or company based in Indonesia has the right to lease another’s land. This is to be done through a pre-determined arrangement between both parties involved in the lease. Business owners in Indonesia also have building rights on land. This right is active for 30 years, can be extended by up to 20 years, and can be transferred to anyone able to sell or inherit land or secure a loan. Any Indonesian citizen who is a business owner or Indonesian company have these rights. Foreign business owners, on the other hand, are to place their building under a rights-to-build deed which will expire after a stipulated period. Cultivation rights are applicable to business owners who own a business within the agricultural sector. These rights last for 25 years and can be extended by up to 35 years. To apply for these rights, an applicant is to register at the Land Register of the National Land Agency (BPN). Cultivation rights can be used by a business owner to receive a loan. This is done by delivering a certificate of cultivation rights to the lender. Cultivation rights may be possessed by any Indonesian agricultural business or any Indonesian citizen who owns one. Rights of use are rights related to using land which may either be government-owned or privately owned. This land may either be used for construction or agricultural purposes. Local government authorization is required for the transfer of this land.