In terms of the legal system in Indonesia, the three most widely used services in the legal profession are notaries (notaris), lawyers (pengacara) and legal advisers (konsultan hukum).
A notary is required to have a law degree (SH), a master’s degree in notary law followed by business formation and ethics courses, and one year of practical training with a licensed notary. Licenses to practice are issued by the Ministry of Justice. Notaries generally provide legal advice, handle civil and commercial agreements/contracts, leases, deeds, and company formation. Many notaries also have PPAT licenses issued by the Ministry of Lands which qualifies them to process title transfers of ownership.
A lawyer is required to have an “SH” law degree followed by a defense training course and a period of practical training at a registered law office. Licenses to practice “SK” are issued by the regional High Court. Lawyers typically provide general legal advice, handle criminal cases, breach of contract, immigration issues, litigation, and representation in court.
The most common mistake I see investors make when seeking professional legal advice is that they often go to a lawyer when they should hire a notary, and vice versa. This is especially common with those of us from an Anglo-Saxon system where the role of a notary public is to witness signatures and they are not required to have any legal knowledge, often being the local postman, hotel manager or publican. In the Indonesian system, a notary is the most qualified legal professional and the only one who can execute business contracts on behalf of clients. Making the wrong choice won’t be fatal, as you’ll probably end up in the right office eventually, but you could waste precious time and money in the process.
Another misunderstanding occurs when foreigners are led to believe that a person with an SH is a qualified lawyer or notary. SH means the person has a law degree and this does not qualify them to practice law, any more than it would in western countries. Compounding this confusion, there are many dubious institutions giving SH qualifications in Indonesia, just as there are dubious over-the-counter qualifications available in western countries or online these days.
Before engaging the services of a lawyer or notary, it is good practice to ask them to show you their SK license. I guarantee they will be happy to show their qualifications as both titles are considered to be high positions in Indonesian society where only a small percentage get third level education. If they are reluctant or hesitant to present their credentials to you, think again before hiring them.
Try to find a lawyer or notary who speaks your language at a level that you can understand. Going through your local friend whose English is “not so good” can be expensive when it comes to legal documents. Leaving your notary’s office “thinking” he knows what he agreed to/signed is a recipe for disaster. Get all documents officially translated before you sign them.
The third category that you are likely to find in the legal profession is that of legal consultants/advisors (Konsultan Hukum). These businesses are often owned by professionals with connections to well-qualified lawyers, notaries, and government officials. They usually provide a set of services such as organizing notaries and lawyers as needed, translations, licences, permits, visas, etc. They can be useful if you are not sure if you can deal with the various offices yourself and want to save time, as they usually have a network of professionals to handle common transactions.
It is common to find legal consultants who combine their services with business and investment advice. For example, they may act as advisors for investment or development projects and also manage relationships with government departments and local community leaders. Finding a consultant you feel comfortable with should involve visiting a few companies that already provide the range of services you need, and negotiating a fixed price for the service before signing up. Again, find a consultant who speaks your language at a proficient level, and remember that consultants are only as good as the connections and professionals they employ; so don’t be afraid to ask about the qualifications of the experts they use.
In general, moving to or doing business in another country is never an easy process, even when dealing with similar cultures, languages, and legal systems. However, when you add different languages, laws, and traditions, it becomes much more challenging. Therefore, one has to be disciplined and methodical and exercise careful judgment every step of the way. Some helpful general guidelines to keep in mind:
Professional advice is relatively cheap in Indonesia; check qualifications and background and hire the best.
If you are buying property, have professional due diligence carried out; For example, you don’t want a 30-year lease on your house with only a 15-year lease on access.
Be perceptive: Don’t always take things at face value and seek a second opinion.
Start by opening your own bank account; get your own safe deposit box at the bank; and save all your own important documents.
Hire a professional or consultant who offers independent advice. Using the same broker you are buying the property from to arrange your legal issues and permits can be convenient at the time, but it can also leave you very vulnerable later if you made a bad decision to begin with.
Doing things legally in Indonesia is not as difficult as many would have you believe. Essentially, by employing a similar level of caution as you would at home and by avoiding some of the major pitfalls discussed above, you can ensure that the transition to your new home, business, or life is as smooth as possible.
Then you can get down to the real business: enjoying life in Bali.
By Daniel O’Leary