Ownership and legal issues

• As a foreigner, how secure is my ownership of the villa I would buy?
  Because foreigners cannot currently own land in Indonesia, I have established a PMA company. This is an official and authorized foreign investment company set up by a non-Indonesian (me), approved by the Indonesian Investment Coordinating Board and registered by the Indonesian Ministry of Justice. It is owned, managed and controlled by the foreign shareholders-in my company’s case that is me. Such a company can then buy or lease land, obtain all the building permits and other licenses to build villas, then construct and sell them to foreign buyers legally and with security of ownership. As the legal owner of a villa you will receive all necessary documents to verify your purchase and the legality of your investment and rights of usage and to sell your villa if desired.A copy of the lease agreement held by the PMA company will be made available to all villa owners as will a full sub-lease agreement which legalizes the lease of the land on which your villa will be built as well as your share of the land on which common facilities will be built on.In addition a full due diligence survey and report on the status of the land and any building restrictions or requirements will be done by a qualified legal advisory company and their results made available to all potential buyers. No leasing of the land nor building will commence without a positive report in all aspects.
• What sort of lease is there and how long is it?
  The owners of the land on which the villas and other common facilities are built have agreed to lease the land for an intial period of 25 years with automatic right of renewal for additional periods of 25 years after that by the PMA company. The cost of the villa includes lease payments for a 50 year lease. The renewal of the lease is the responsibility of the PMA company at the end of the first 25 year lease period. Renewal after 50 years will also be done by the company but the costs of this second renewal will be at the villa owner’s expense.
• Can the lease be renewed and how much will it be?
  Yes, the lease is renewable after 50 years on the basis of the lease agreement which will be drawn up by the project’s legal advisors. The terms of renewal will be tied to the movement in the Indonesian cost if living/inflation index. So, for example, if over the 50 year term of the lease the CPI rate increases 200% then the lease renewal of the land would be for twice the rate paid for the current lease.
• Are there any restrictions on the use I can make of my villa?
  No, as long as guests abide by the leases/management agreements they have signed as well as the rules of use of the villas and its facilities and also conform to Indonesian laws and local cultural norms and sensitivities then the villa can be used for whatever use or period you require.
• Can improvements and additions be made to my villa once built?
  This will depend on their extent. Obviously major additions that would interrupt or adversely affect neighbouring or other properties on the site would not be possible. However additions and renovations that don’t affect other properties would normally be permissible at owner’s expense.
• Am I liable for tax on any rental income I make from the villa?
  If the income is earned within Indonesia and you are required to make an official Indonesian Government tax return then yes. However if you live outside Indonesia and have no obligation to pay Indonesian tax then I advise you to make arrangements to minimize your tax payments. Legal advice on how to do this is available in Bali.
• What financial reporting and accountability is there to villa owners?
  Annual financial statements for the operational and management costs of the villa complex will be made and distributed to all villa owners by the management company. In addition quarterly statements will be provided to all villa owners of their own personal accounts including income received and payments made from them.

Villa finishing and maintenance

• Can you help with furnishing and other supplies for my villa?
  The furnishing and decorating are left to you as the villa should reflect your own tastes however I can supply you a list of good shops and suppliers of the range of furniture, furnishings, fittings and other supplies you may want to purchase in Bali or Jakarta
• What is the likely cost of furnishing and setting up the villa for use?
  This depends on the quality of furnishings you choose however the prices of locally produced wooden and rattan furniture are considerably cheaper than equivalent foreign or imported products. A range of beautiful antique furnishings are also available in Bali. Local fabrics and other items of décor can generally be purchased and made up at competitive prices. I am happy to provide a list of furniture providers and give general ideas as to costs if you are interested
• What does the monthly maintenance fee cover?
  Wages and salaries of full time and part time staff, utilities used by common facilities, donations and any required local administrative fees, insurance costs on common facilities, vehicle maintenance and running fees, operating and maintenance costs of common facilities such as swimming pool, Jacuzzi, sauna, exercise room, laundry plus a managers fee payable to me for the work I will do in overseeing the management and operation of the Villa Gunung complex. Any surplus from maintenance fees will be retained for long term costs such as vehicle replacement and any unforeseen expenditure
• Does the monthly maintenance fee increase over time?
  This fee will increase over time reflecting increased costs however I will try to minimize the increase in line with the aim to keep these to a minimum. Any ideas for cost savings to minimize this fee are welcome.
• What does the two year builder’s guarantee cover?
  The builders guarantee covers faults, defects and repairs necessary as a result of faulty construction work or substandard materials or any other fault attributable to the builder and the materials used. Natural disasters such as landslips, earthquakes, floods, etc or fire and other insurable events are not covered and private insurance of your villa to cover these events is strongly advised.
• Is insurance included in operation costs?
  For facilities used in common such as the clubhouse, facilities/maintenance and car park, swimming pool and gardens, a comprehensive insurance policy is kept and paid for out of the maintenance fee. Individual insurance of villas is the owner’s responsibility however the services of a local company can be arranged to give a quote and annual payments can be made by villa administration staff using funds provided by villa owners.

Selling and marketing

• Can I sell the villa and if so how do I do that?
  As the legal owner of the villa with rights to use common facilities, you have the legal right at any time to sell your villa as long as you and the new owner conform to the same regulations and obligations set out in your ownership and lease documents. The selling of your villa and the costs associated with this is your responsibility although help in referring you to local or other real estate agents can be given if required.
  The legal documents you will receive including the subleasing of land allow you to legally transfer ownership of your villa easily if you decide to sell your villa.
• What will it cost to market my villa?
  This very much depends on you the owner and how you choose to market it. For some owners renting of their villa will have strict time or other restrictions. For others maximum rental income may be required. I am prepared to develop a website and also list properties on websites that I currently list my own villa on. These include local Bali property agents as well as international Websites. As pointed out in the marketing information the marketing of villas in niche markets familiar to individual owners is probably one of the best and most lucrative sources of rental income. Costs of marketing will be based on what avenues are used and can range from commission-free rentals by individual owners to commission based rentals if villas are listed on international Websites or sharing the costs of listing on Websites with fixed annual fees. If marketing requires bookings being made, rentals collected and other services, some form of commission would need to be charged by the managing company.

Staying in Bali

• How do I get to and from the villa when I arrive and while I’m there?
  The villas will have two vehicles for the use of guests. They will collect you and deliver you back to your place of arrival/departure in Bali. They will primarily be to transport guests to and from the airport and offer a regular daily shuttle service from the villas to and from Ubud. Once these functions are fulfilled then the villa vehicles will be available for guests use on a paying basis although the fees will be set at a cost recovery level.
• When is the best time of year to visit Bali?
  Bali is a wonderful experience any time of year! However if weather is a factor, the rainy season lasts from around October to March. During this time, heavy rains can occur but in a tropical environment, rains don’t affect temperature much and don’t usually last all day so their impact on lifestyle is limited. The dry season is warmer and with less rain, Bali can be drier, less green and maybe less attractive than in the wet season. So take your pick! I visit Bali throughout the year and its always marvelous.
• What can I do during my stay?
  In and around Ubud there are a huge range of activities to do.
  These range from exploring the immediate environment by foot or on bikes to a range of learning experiences, village and temple visits, outdoor adventure such as whitewater rafting, elephant trekking and mountain biking and trekking and nature walks. Swimming, surfing and snorkeling/diving locations are just over an hours drive away as are excellent golf courses and other sports amenities.
  Shopping, dining and a wide range of Balinese cultural entertainment is found in the village of Ubud and its immediate environment, a 15 minute drive away.
  Longer day trips to other parts of the island or specialized itineraries plus advice on a wide range of other activities to do during your stay can be provided by the staff and a wide range of magazines, guidebooks and other sources at the villa.
  There are many Websites featuring Indonesian and Balinese information and attractions. One good general site is http://www.budpar.go.id/
• Are there any difficulties being able to stay for extended periods in Indonesia?
  The current tourist visa is for a period of 30 days and costs US$25 if you are eligible for the Visa on Arrival (VOA) facility. Alternatives to this are the Social Visit Visa which requires some form of sponsorship and is valid for 60 days. Another alternative is the over 55 years old residency visa. This requires more processing and extra costs but is better for those over 55 who want to stay for extended periods. Further information on the various types of visa available for visitors and intending residents can be found on the Indonesian Immigration Website at http://www.imigrasi.go.id/ Go to the panel on the left hand side and chose Foreigners and then Concerning Visa.
• What are medical facilities like in Bali?
  Local doctors near to the villas offer basic care and a 24 hour Clinic operates in Ubud, a 15 minute drive away. The local Sanglah Hospital in Denpasar-an hour’s drive away- has a foreign funded hospital wing built following the first Bali bombing which gives high quality service. Other private hospitals in Denpasar also offer emergency and regular hospitalization facilities and care. SOS Medika and an Australian-operated clinic give high quality emergency service and arrange medical evacuation if required. Despite the much improved medical facilities now available in Bali, it is highly recommended that all visitors have medical insurance including cover for medical evacuation.
• Do I need to take any special medical precautions before coming to Bali?
  Bali is supposed to be malaria free however cases of the mosquito borne dengue fever occur periodically. Other diseases such as typhoid, cholera, tuberculosis and hepatitis occur and innoculations against these are useful however doctors advice should be sought before proceeding with these. Following safe and healthy eating, drinking and hygiene practices will minimize the risks of contracting any of these sicknesses. I’ve lived here for 23 years and have suffered from none of them!

Villa facilities

• How are costs for the car, business centre, bar and other payable facilities calculated?
  For owners and guests they are costed on a cost recovery basis with any excess being included in annual income and offset against operating costs.
• Can I do shopping while I’m staying in the villas?
  Yes, using the villa cars to go to the local supermarket or other shops can be arranged as long as it doesn’t interfere with other car use. It isn’t possible to use our driver or other staff to do the shopping for guests unless special arrangements are made or such trips are part of their routine. Assistance with places to shop, ideas of prices and any other issues involved in shopping can also be given by villa management staff.
• What options do I have for eating while I stay in the villas?
  You have a number of options.
  Firstly cook for yourself using the villa’s fully equipped kitchen facilities and the food you bring with you or buy locally. The outdoor barbeque area near the pool can also be used for your cooking needs.
  Secondly, have a hired cook prepare your meals in the villa for you. Full or part time cooks can be engaged on a daily, weekly or longer period basis. Rates vary on work required, circumstances and duration needed.
  Thirdly, eat out at the large range of restaurants in the Ubud area or further afield. The staff will happily recommend good restaurants to eat at in the local area.
• What is the security like in Bali and at the villas?
  After two terrorist bombings, it may be surprising to hear that Bali is generally a very safe place. The Balinese are a peace loving people who have been devastated in many ways by past terrorist events and are now more determined than ever to ensure that visitors feel safe and that facilities to maximize safety are in place.
  The Balinese are generally very trustworthy although in crowded places petty theft can occur. Carrying large amounts of money conspicuously in public places is not advised. .
  The villa complex will have 24 security service and its location in a secure rural area minimizes theft and other criminal activity. However guests need to ensure that rooms are locked and valuable placed in safe keeping during their stay.
• Can I change money at the villas?
  We can change small amounts of money but recommend that you use the banks and/or money changers in Ubud for you needs. We will recommend these to you. A range of 24 hour ATM machines are also available in Ubud.
  We suggest that if you plan on staying for long periods in Bali that you open a local bank account. This is easy to do and a number of banks are available in Ubud. We can recommend options for you.
• Can I hire a car in Bali and do I need a driver’s license?
  Yes, to both questions. We can assist in hiring cars and/or drivers for you during your visit. The drivers license you use can be an official license from your home country so unless you’re staying for extended periods in Indonesia, it doesn’t have to be an Indonesian driver’s license.