Many foreigners buy freehold property in the name of an Indonesian citizen, often a stranger who does this for a fee. At the same time as the contract is signed, the nominee gives the investor a “power of attorney” that entitles the investor to sell the property at anytime without an agreement from the nominee. In some cases the investor also registers a mortgage on property, in order to further safeguard his investment.

The investor should be aware of the risks associated with this method:

• The investor is to some extent exposed to the integrity of the nominee.

• This method circumvents the law that states that foreigner can not have freehold title to land and could therefore be subject to some government actions in the future.

This is the most straightforward way for a foreigner to own a property. It is fully legal for a non-resident foreigner to lease land for 25 years in his own name, and he can have an option to extend for further 25 years . At the end of the lease period the land and building is returned to the landowner.

The investor can at any time during the lease period sell the remaining lease to any other person.

This method is regarded safe for foreigners as long as the legal documentation is done in a proper way.