L'impôt foncier en Indonésie : Un guide complet
Dans cet article, nous passerons en revue les principaux aspects de la fiscalité immobilière en Indonésie, en nous concentrant sur les revenus locatifs, l'impôt sur les terrains et les bâtiments, et les implications de l'impôt sur le revenu pour les propriétaires de biens immobiliers. Il est important de connaître ces taux d'imposition avant de louer ou d'acheter un bien immobilier en Indonésie. Fiscalité immobilière en Indonésie et à Bali BPHTB - Taxe de vente et d'achat Lorsqu'il s'agit de régler une transaction immobilière, les deux parties ont des obligations fiscales. La première est la taxe d'acquisition foncière ou Bea Pengalihan Hak atas Tanah dan Bangunan (BPHTB). L'acheteur et le vendeur doivent payer la taxe avant que le notaire ne signe l'acte. La taxe foncière et la taxe sont calculées à un taux forfaitaire de 5 % pour l'acheteur (le vendeur paie un impôt sur le revenu PPH de 2,5 %). La taxe pour l'acheteur est calculée comme suit. Le calcul de la taxe varie d'une région à l'autre en fonction des biens immobiliers non imposables, appelés Nilai Perolehan Objek Pajak Tidak Kena Pajak (NPOPTKP), qui sont déduits de la valeur d'acquisition de l'objet fiscal, appelée Nilai Perolehan Objek Pajak (NPOP). BPHTB = 5 % x (NPOP - NPOPTKP) Prenons l'exemple d'une propriété vendue à 3 000 000 000 IDR à Jakarta. Le NPOP est alors égal à 3 milliards IDR. Le gouvernement fixe le NPOPTKP à 100 000 000 Rp IDR à Jakarta : 5 % x (3 000 000 000 Rp - 100 000 000 Rp) = 145 000 000 Rp PBB - Taxe sur les terrains et les bâtiments L'une des taxes foncières en Indonésie est la PBB. La taxe sur les terrains et les bâtiments en Indonésie (Pajak Bumi dan Bangunan) est assortie d'un taux national maximal de 0,5 %. Chaque région d'Indonésie définit son propre taux. C'est le gouvernement local qui le détermine : Le NJOP (Nilai Jual Objek Pajak) qui peut être décrit comme la valeur de vente de la propriété. Ce montant est le prix moyen obtenu lors de la dernière transaction immobilière. S'il n'y a pas eu de transaction immobilière récemment, le NJOP est déterminé par le gouvernement local en comparant les biens sur le marché. Le NJKP (Nilai Jual Kena Pajak) est la valeur d'évaluation calculée à partir du NJOP. 40 % pour les biens supérieurs à 1 milliard IDR 20 % pour les biens inférieurs à 1 milliard IDR Pour simplifier, si la transaction immobilière s'élève à 2 000 000 000, la taxe PBB sera de 20 % x 2 000 000 000. La taxe finale sera de 0,5 % x 20 % x 2 000 000 000 = 20 000 000 IDR. PPH - Impôt sur le revenu et taxe sur les baux en Indonésie Les bailleurs sont responsables de cette taxe. La taxe est basée sur la valeur du bail. Le montant de la taxe sur les baux à Bali est de 10%. Cette taxe est due après la signature du bail et de la transaction. Dans le cas d'une propriété en pleine propriété, l'impôt sur le revenu du vendeur est de 2,5 %. L'impôt est calculé sur la valeur du revenu (prix de vente). TVA (PPN) Souvent oubliée, l'acheteur peut avoir à payer une TVA sur la propriété appelée PPN Pajak Pertambahan Nilai. Le locataire ou l'acheteur doit payer la taxe lorsqu'une transaction a lieu avec un entrepreneur ou un promoteur enregistré comme collecteur de TVA. Le taux de la taxe est de 11 %. Toutefois, cette taxe ne s'applique pas aux biens immobiliers d'occasion. Il est important de vérifier si le vendeur collectera la TVA pour le gouvernement et s'il est en droit de vous facturer la TVA. Taxe de construction 1,75 % pour une société classée comme petite entreprise ou pour une personne ayant un certificat de compétence 4 % si la société n'a pas de qualification commerciale 3,5 % pour une société déclarant concevoir et gérer le projet de construction en tant que promoteur (6 % si la société n'a pas de qualification commerciale) La PPH est due par l'entrepreneur, sauf si le client est une société ayant un numéro d'identification fiscale en Indonésie. Dans ce cas, le client doit retenir la taxe. Droit de timbre (DST) Le paiement du droit de timbre documentaire sert de preuve juridique lors de la signature des deux parties. Le droit de timbre standard a changé ces dernières années mais se stabilise à moins de 1 USD. Comment pouvons-nous vous aider ? Conformité à l'impôt foncier et planification fiscale Pour les particuliers et les entreprises impliqués dans des transactions immobilières, ILA Global Consulting offre des conseils d'experts sur la planification de l'impôt foncier. Nous aidons nos clients à optimiser leurs obligations fiscales tout en garantissant une conformité totale avec les lois fiscales indonésiennes. Cela comprend l'assistance en matière de droits de mutation (BPHTB), de taxes sur les terrains et les bâtiments (PBB) et d'autres taxes connexes. Structuration des transactions Nous aidons nos clients à structurer leurs transactions de la manière la plus efficace sur le plan fiscal. En tenant compte des détails spécifiques de chaque transaction, ils peuvent fournir des conseils sur mesure sur la façon de minimiser l'exposition fiscale tout en adhérant aux exigences légales. https://www.pajak.go.id/id/peraturan/perubahan-kedua-atas-peraturan-pemerintah-nomor-51-tahun-2008-tentang-pajak-penghasilan https://www.pajakku.com/tax-guide/12413/UU/1%20Tahun%202022
Impôt sur le revenu des personnes physiques en Indonésie
Individuals are considered tax residents in Indonesia if they are engaging in business, freelance endeavors, or earning income surpassing the Non Taxable Income threshold. They have to register their NPWP (Tax card) in order to report their tax annually between 1st January and 30 March. Married persons meeting their tax obligations independently from their spouses have to obtain an NPWP at the tax office. Generally, tax residents are liable for taxes on their global income, but with the implementation of double taxation agreements (DTAs), these obligations can be waved for those who have income from working on their own behalf, such as working remotely. The provision under the Income Tax Law Nomor 18/PMKc03/2021, specifying that foreign individuals transitioning to tax residency in Indonesia may be taxed solely on income sourced within Indonesia (even if received offshore) for 4 years. In other words foreigners can apply for the territoriality for 4 years before being tax on their worldwide income. It’s important to note that this territorial taxation system may not apply if a foreign individual receives income from overseas and utilises the relevant tax treaty between Indonesia and the source country to avoid taxation on both sides. Who pay personal income tax in Indonesia? An individual is an Indonesian tax resident if the person: Resides in Indonesia Resides in Indonesia for 183 days or more in any twelve-month period Presents and intends to reside in Indonesia (this option is more rarely applied) For non-resident individuals, a general withholding tax (WHT) of 20% is imposed on their Indonesian-sourced income. However, concessions are available in the presence of an active DTA. TAXABLE INCOME IN INDONESIA Taxable income for 2023 (IDR) Tax rate (%) Up to IDR 60 million 5 Above IDR 60 million to IDR 250 million 15 Above IDR 250 million to IDR 500 million 25 Above IDR 500 million to IDR 5 billion 30 Above IDR 5 billion 35 DEAD LINE : 31 March following the previous year TAXATION ON SEVERANCE PAY Taxable income (IDR) Tax rate (%) Up to IDR 50 million 0 Above IDR 50 million to IDR 100 million 5 Above IDR 100 million to IDR 500 million 15 Above IDR 500 million 25 Taxpayers have the convenience of extending the deadline for filing annual income tax returns by up to two months. They can simply notifying the Tax Authority. It’s a hassle-free process that provides you with additional time to ensure accurate and timely submissions. Keep in mind that late tax payments incur a 2% monthly surcharge. Should there be any tax underpayment resulting from voluntary amendments to tax returns, a surcharge of 2% per month or 50% to 150%, depending on the case, will apply. Timeliness is key, as late reporting comes with a penalty of IDR 100,000 for annual individual income tax returns. Taxpayers who are working in Indonesia have to contribute to the social security system. Never worry about taxes and accounting again Dealing with finances, taxes, and accounting can feel overwhelming, especially as a foreigner in Indonesia. Let us guide you through processes like tax calculation, payroll, personal or corporate tax, short-term investments, balance sheet analysis and much more. With ILA by your side, nothing can go wrong. Schedule a free consultation today or learn more about our tax and accounting services. Capital Gains Ordinarily, capital gains are included in an individual’s overall income and taxed at standard rates. Notably, exceptions apply to the sale of land, buildings, and exchange-traded shares listed on the Indonesian stock exchange. These transactions are subject to final tax. Dividend Dividends received from an Indonesian limited liability company attract a final income tax of 10%. However, this tax is waived if the recipient is a domestic individual taxpayer and the dividends are reinvested in Indonesia within a specified timeframe (3 years). Interest Interest income from time deposits and savings with Indonesian banks or their overseas branches, as well as interest from time deposits placed through Indonesian branches of foreign banks (in any currency), is currently subject to a final income tax rate of 20%. Additionally, interest on bonds incurs a final income tax at 10%, collected through withholding by the payer. Stay informed about these specific tax treatments for optimal financial planning. Read also: Property Taxation in Indonesia : Comprehensive Guide (2024) Exemptions from Personal Income Tax for Certain Foreigners in Indonesia The tax office exempts of personal income tax declaration some person living in Indonesia. Some KITAS holder are not entitle to report their tax in Indonesia if they hold a second home KITAS a retirement KITAS a spouse KITAS and getting revenue with their partner Read Also: Tax Planning: How to Optimise Taxation in Indonesia Reporting Individual Tax Returns in Indonesia Taxpayers need to fill out their personal income by the end of March following the calendar fiscal year. In order to declare their tax, the KITAS holder needs to obtain two essentials documents. NPWP EFIN (Electronic Filling Identification Number) Those documents can be obtain at the tax office of the tax payer. The locations depends on the residence written on the KITAS and provided when the KITAS was issued. It is mandatory to update the address in case of changes with the residency to update the tax office. If for some reasons the taxpayer didn’t declare its tax, the taxpayer will receive a fine for each year that was not fulfil. Contact us about these tax implications to make well-informed financial decisions for yourself and your family.
Planification fiscale : Comment optimiser la fiscalité en Indonésie
Feeling overwhelmed by Indonesia’s tax landscape? As a company, family office, or entrepreneur, minimizing your tax burden while adhering to regulations can seem like a complex puzzle. But worry not, effective tax planning, tailored to your needs, can be your guide to optimizing taxation in Indonesia. What is Tax Planning? Think of it as strategizing your finances to keep more of your hard-earned money. It’s about using legal methods to leverage available allowances, deductions, and exemptions offered by the Indonesian government. Why should I consult for tax planning? Save money: Reduce your tax liability and keep more of your income for growth, investment, or rewarding your team. Peace of mind: Knowing your taxes are handled efficiently can alleviate stress and uncertainty. Stay competitive: Smart tax planning can give you an edge in the dynamic Indonesian market. Tax Planning a Strategies for Success in Indonesia: Investment Savvy: Utilize tax-advantaged investments like Pensiun Dana Manfaat Pemberhentian (PDMP) or Sukuk Wakalah to optimize returns and reduce taxable income. Deduction Detectives: Claim legitimate deductions for business expenses, research and development, or employee training to lower your tax bill. Timing Tricks: Strategically adjust the timing of income and expenses to fall into lower tax brackets or benefit from specific deductions. Compliance Champions: Partner with our team of experienced tax consultants to stay updated on regulations and navigate the evolving tax landscape with confidence. Never worry about taxes and accounting again Dealing with finances, taxes, and accounting can feel overwhelming, especially as a foreigner in Indonesia. Let us guide you through processes like tax calculation, payroll, personal or corporate tax, short-term investments, balance sheet analysis and much more. With ILA by your side, nothing can go wrong. Schedule a free consultation today or learn more about our tax and accounting services. Is tax planning only for high-net-worth individuals or big companies? No, absolutely not! While complex tax planning strategies might be more relevant for high net-worth individuals or large corporations, the fundamentals of smart tax optimization apply to everyone, regardless of income level or business size. Read also: Corporate Income Tax in Indonesia. Here’s why: Everyone pays taxes: Whether you’re a salaried employee, a freelancer, or a small business owner, everyone faces some form of taxation in Indonesia. Minimizing your tax burden, even by a small percentage, can make a significant difference in your disposable income. Simple strategies can have a big impact: Even basic tax planning measures like claiming eligible deductions, utilizing tax-advantaged accounts, and understanding income brackets can lead to noticeable savings. Here are some concrete examples of how tax planning can benefit individuals and small businesses in Indonesia: Salaried employees: Claiming deductions for medical expenses, education costs, or dependent care can lower your taxable income and reduce your tax bill. Freelancers: Utilizing micro business tax regulations or setting up a Pensiun Dana Manfaat Pemberhentian (PDMP) can offer substantial tax benefits and secure your future savings. Small businesses: Optimizing depreciation deductions, claiming legitimate business expenses, and understanding VAT regulations can contribute to significant tax savings and boost your bottom line. Tax planning is not exclusively for the wealthy or the big players. Even small steps towards optimization can lead to significant savings and contribute to your financial well-being. Don’t underestimate the power of smart tax planning, regardless of your income or business size. Start early: The sooner you implement tax-efficient strategies, the greater the long-term impact on your wealth accumulation. Seek professional guidance: While basic strategies can be managed independently, consulting a qualified tax consultant can unlock more complex optimization opportunities and ensure compliance with regulations. Tax laws are complex and subject to change. Consulting with our qualified tax consultants ensures you stay compliant and optimize your tax strategy. Never engage in illegal tax schemes. We prioritize ethical and transparent approaches to maximize your savings while respecting regulations. Case Study: Simplifying Taxes for a Family Office Meet the Wijayas, a successful family operating a thriving manufacturing business in Indonesia. Their family office manages their diverse portfolio, including the business, real estate investments, and personal wealth. However, their tax bill threatened to significantly eat into their profits and future investment plans. The Wijayas relied heavily on traditional income generation methods, unaware of tax-efficient strategies. This resulted in a higher tax burden than necessary. Additionally, their portfolio lacked diversification, limiting opportunities for optimization. Read also: Personal Income Tax In Indonesia Action plan Our tax consultants partnered with the Wijayas to implement a tailored plan: Investment Diversification: We recommended investing in Pensiun Dana Manfaat Pemberhentian (PDMP), a tax-advantaged retirement scheme offering attractive returns and tax deductions on contributions. Real Estate Optimization: We analyzed their rental properties and identified opportunities to utilize depreciation deductions and optimize rental income timing to minimize tax impact. Expense Management: We reviewed their business expenses and suggested strategies to claim legitimate deductions for essential costs like research and development, employee training, and technology upgrades. By implementing these tax-efficient strategies, the Wijayas: Reduced their tax bill by 20%, freeing up significant capital for reinvestment and family goals. Boosted their long-term wealth through PDMP investments and optimized real estate income. Gained peace of mind knowing their tax affairs were handled efficiently and legally. The Takeaway Working with tax consultants, companies, and family offices in Indonesia can unlock significant tax savings. You can secure financial stability and fuel your future growth. Don’t let taxes be a burden. Contact ILA today to explore personalized tax planning strategies and navigate the Indonesian tax landscape with confidence.
Financement et hypothèque en Indonésie : Découvrez comment obtenir un prêt en tant qu'étranger à Bali
When it comes to purchasing a property in your home country, several financing sources and acquisition methods are available. However, when expanding and diversifying your investment abroad, the solutions are more limited but not impossible. However, when expanding and diversifying your investment abroad, the solutions are more limited but not impossible. Indeed, foreigners can secure a loan in Bali and put a mortgage on their property. Leveraging Your Investment in Indonesia In contrast to a leasehold, an investor buying a freehold becomes the owner of the property. This distinction changes the perspective of the investment, allowing you to leverage your investment and acquire a second property without having to spend cash. Example: Consider John, who bought a leasehold for 25 years at 100k and still has 25k to invest. While John has to wait 15 years to buy another property, David, who acquires a freehold at 100k, can put a mortgage on his property, borrow 75k, and buy a second property immediately. In 15 years, David can reproduce the same mechanism, having four properties, while John may only own one property with 10 years left on the lease, possibly able to lease a second one. In 15 years’ time, David can have 4 properties in ownership, while with the leasehold, John will just have 10 years left on one property and maybe be able to lease a second one. Considering that the price will have increased, David will have more than triple its investment compared to John. Also read: Freehold Vs. Leasehold In Bali Property: Which One Better? Never worry about taxes and accounting again Dealing with finances, taxes, and accounting can feel overwhelming, especially as a foreigner in Indonesia. Let us guide you through processes like tax calculation, payroll, personal or corporate tax, short-term investments, balance sheet analysis and much more. With ILA by your side, nothing can go wrong. Schedule a free consultation today or learn more about our tax and accounting services. Your Guide to Getting a Loan in Indonesia and Bali Here are some of the questions that you may have on how to get a loan in Indonesia How can I get a loan in Indonesia to buy a property? Banks in Indonesia are rarely willing to loan money to foreigners due to the risk of them returning to their home countries. However, by setting up a company, foreigners can establish an Indonesian entity with legal representation and identity, enabling them to borrow money. How much can I borrow to buy a property in Indonesia or Bali? Foreigners can borrow 50% to 70% of the value of the property. Will this loan be under Indonesian regulation? OJK regulates bank and financial transactions in Indonesia. By choosing ILA, all transactions are safe and under the regulation of OJK, providing Indonesian and customer regulation protection. How can ILA help me get a loan in Bali and buy a property? ILA can assist throughout the process by checking the land certificate for eligibility and ensuring secure leverage of your investment to obtain a loan. Can I get a loan for a first property acquisition in Bali? Yes, depending on your investor profile, ILA’s experts will analyze your profile, assets, and project. How much will the interest rate be to buy a property? The interest rate will be a monthly rate based on the investor’s profile, with the borrower making monthly payments to reimburse the loan. Can I get a loan on a leasehold property in Bali? No, as a leasehold is not owned, lenders cannot recover their money on a leasehold and resell something the borrower doesn’t own. Is this true? Why do other companies not offer this service? Yes, for years, foreigners faced difficulties borrowing money for property in Indonesia. With companies now able to own property under HGB, opportunities have changed. Traditional banks may not be accessible, but ILA and other market actors offer different solutions, adhering to Indonesian regulations under OJK’s supervision. How long does it take to get a loan, and what are the steps? Discuss your investor profile, project, and project value with our consultant. Check the land title and perform due diligence, taking a few days to identify any existing mortgages. Assist in creating your company, taking 3 days to 1 week, requiring your passport and signatures. Once your entity is created, you can legally sign as the director of the company for loan document processing. Is it secure to invest in a property in Bali or the rest of Indonesia? Security lies in following procedures and rules. Never rush decisions; review legal documents, conduct proper due diligence, and involve third parties. Notaries, real estate agents, and sellers all have an interest in a smooth transaction. Timing is crucial, but patience and a systematic approach are key. Can you help us review legal documents and perform due diligence on the property? We are happy to review legal documents for properties you want to buy or lease, ensuring your contract covers your investment. For more information on property acquisition and obtaining a mortgage in Indonesia, contact us at info@ilaglobalconsulting.com
Impôt sur le revenu des sociétés en Indonésie : taux et règles les plus récents
Indonesia has a legal basis in Article 23A of the 1945 Constitution (UUD 1945) for corporate income tax. There are various types of tax in Indonesia, especially for corporates. If you are a foreigner planning to open a business, it is important to understand them. Here’s the tax information in Indonesia that you must know: Corporate Income tax in Bali and Indonesia Taxation in Indonesia for resident corporations is subject to taxation on their global income. Foreign companies engaging in business through a permanent establishment (PE) in Indonesia assume similar tax obligations as resident taxpayers. The corporate income tax in Indonesia is set at 22% of the net profit. However new companies or certain sectors might benefit from a certain tax regime. Enjoy tax advantages tailored for small enterprises Corporate taxpayers with an annual turnover of up to 50 billion rupiah (IDR) are eligible for a 50% tax discount from the standard rate. This discounted rate applies proportionally to taxable income on the portion of gross turnover up to IDR 4.8 billion. Enterprises with a gross turnover not exceeding IDR 4.8 billion are subject to a final income tax rate of 0.5% based on turnover. Particularly of the regime, taxpayers are required to install the CIT on a monthly basis with self-assessment principle. Therefore, tax planning is necessary because the Annual Income Tax Return (SPT) must be submitted no later than the end of April of the following tax year. Branch Taxation in Indonesia Branch Profit Tax (BPT) is an additional tax imposed on a Permanent Establishment (PE), complementing the Corporate Income Tax (CIT). The BPT rate stands at 20% and is levied on the PE’s net profit. However, this rate may be subject to reduction based on the statement of a tax treaty between where the Branch is tax resident. Notably, an exemption from Branch Profit Tax is granted if the net profit after tax of the PE is reinvested in Indonesia, provided it meets specific requirements. This provision serves as an incentive for strategic reinvestment in the Indonesian business landscape. Never worry about taxes and accounting again Dealing with finances, taxes, and accounting can feel overwhelming, especially as a foreigner in Indonesia. Let us guide you through processes like tax calculation, payroll, personal or corporate tax, short-term investments, balance sheet analysis and much more. With ILA by your side, nothing can go wrong. Schedule a free consultation today or learn more about our tax and accounting services. Corporate Income Tax Payments and Deadlines in Indonesia Understanding Deductible and Non-Deductible Business Expenses in Indonesia A company starting in Indonesia has the first 3 years no advantages with deductible expenses. Indeed, the tax office applies the tax on the income and not on the net profit. However it is still important to record the expenses in order to maintain the balance sheet and PnL (profit and loss) of the company to fill the LKPM report out every quarter. Most of expenses of the company are deductibles. It includes: salaries rent donations expenses related to the business activity However, the tax office doesn’t recognize the expenses below as deductible: rent for private use taxes and penalties reimbursement for an employee if the expense is not related to the activity of the company (to avoid the withholding tax and tax on salary) Read also: Dubai to Bali : Tax Treaty Indonesia and UAE Other taxes Regional Taxes Corporate taxpayers may incur various regional taxes and retributions, with rates spanning from a minimum of 0.2% to a maximum of 75%. These rates are applied to a diverse set of reference values established by the respective regional governments. Businesses such as hotels, restaurants, villas, renters, spas, fitness centers have to pay a local tax called PB1. The rate is variable in instance from 10 to 12.5%. Import tax in Indonesia Luxury tax on import goods in Indonesia Despite a regulation from 2021 certain products are still subject to a luxury tax in Indonesia. This tax usually applies on top of the VAT. Import duty Importer or resident companies have to face import duty on top of the VAT. HS codes are primordial to determine the correct tax amount. Withholding tax on payment Particularly the Indonesian tax system requires that a taxpayer pays a tax on a payment done to another taxpayer. The party A buying a service or paying a dividend to another taxpayer needs to withhold a tax and requires the tax number of the second party to pay on its behalf. This amount is from 2 to 10% based on the type of payment. Taxpayers are subject to withhold a tax of 20% for any payment made to non resident. Transfer pricing is important to be planned in advance to optimize the tax payment. Read also: Tax Planning: How to Optimise Taxation in Indonesia Capital gain and Interest rate The system treats capital gain as income and applies the tax regulations described above. A withholding tax rate of 15% applies on the gross amount of interest. The WHT applied domestically on this interest serves as a tax credit, offsetting against the standard income tax rates of 22% for corporate taxpayers. VAT in Indonesia The Value Added Tax (VAT) law in Indonesia permits the government to adjust the VAT rate between 5% and 15%. As of April 1, 2022, the applicable VAT rate on deliveries of goods and services within Indonesia is 11%, with exceptions. Companies can export at 0% while the import of goods incurs an 11% VAT. Certain services related to movable and immovable goods outside the Customs Area fall under 0% VAT, including toll manufacturing, repair services, and consultation for construction. Services performed within the Customs Area for customers outside are subject to the standard 11% VAT. Consumption of foreign services and intangible goods, delivered via e-commerce to users in Indonesia, incurs an 11% VAT. The VAT is due on the accrual principle goods when the company delivers the goods or services . VAT filing is a monthly requirement,
Les FPI en Indonésie : Du concept au marché
Indonesia’s Real Estate Investment Trusts (REITs), officially known as Dana Investasi Real Estat Berbentuk Kontrak Investasi Kolektif (DIREs in Indonesia), are on an exciting growth trajectory. If you’re interested in tapping into this potential, understanding the process of creating a DIRE is crucial. Here’s a breakdown of the key steps, along with further insights into the Indonesian REIT landscape: What are REITs (DIREs) in Indonesia? Real Estate Investment Fund (REIT) is a container used to collect funds from the public or investors to be invested in real estate assets, assets related to real estate, and/or cash and cash equivalents. Meanwhile, the Infrastructure Investment Fund (DINFRA) is a container in the form of a Collective Investment Contract used to raise funds from the investor community to be invested mostly in infrastructure assets by the Investment Manager. Make navigating real estate in Indonesia easy Save time and money by letting ILA’s team of experts guide your real estate journey in Indonesia. We can help with due diligence, land title transfers, notary services, contract drafting and reviewing, building permits, various licences and more. Find more information about our broad range of real estate services, or reach out today for a free consultation. Conception and Planning of DIREs: Identify a Niche: Research market demand and choose a focus for your DIRE, such as retail, office, healthcare, or logistics. Analyze existing DIREs to avoid saturation in specific sectors. Assemble a Team: Gather experienced professionals in real estate development, finance, legal matters, and REIT management. Develop a Business Plan: Define your investment strategy, target properties, funding sources, and expected returns. Regulatory Compliance DIREs: Form a Legal Entity: Establish a corporation that will become the DIRE (REITS in Indonesia). Consult legal advisors to ensure compliance with Indonesian regulations. Obtain OJK Approval: File an application with the Financial Services Authority (OJK) for DIRE registration. This involves submitting detailed documentation about your business plan, financial projections, and team expertise. Meet REIT Qualification Criteria: Ensure your DIRE adheres to the minimum requirements, including: Investing at least 75% of assets in real estate or related assets. Generating at least 75% of gross income from rents, real estate sales, or mortgage interest. Distributing at least 90% of taxable income to shareholders as dividends. Capital Raising and Investment: Initial Public Offering (IPO): List your DIRE on the Indonesia Stock Exchange (IDX) to raise capital from public investors. This requires meticulous preparation and adherence to IPO regulations. Private Placement: Secure funding from institutional investors or high-net-worth individuals through private placement deals. This can be a faster route to market but may involve higher interest rates or stricter investment terms. Acquire Target Properties: Use the raised capital to purchase income-generating real estate assets that align with your DIRE’s focus. Conduct thorough due diligence and ensure property titles are clear. Ongoing Management and Operations: Establish a Management Team: Build a team with expertise in property management, tenant relations, financial reporting, and compliance. Maintain High Occupancy Rates: Implement effective leasing strategies and property maintenance to attract and retain tenants, ensuring steady income generation. Distribute Regular Dividends: Pay out at least 90% of taxable income to shareholders as dividends, fulfilling a key REIT requirement and attracting investors seeking regular returns. Ensure Transparency and Reporting: Maintain accurate financial records and prepare regular reports for shareholders and regulatory bodies. Beyond the Basics: A Deeper Dive into Indonesian REITs Government Incentives: The Indonesian government actively supports DIRE growth through tax benefits like double taxation exemption and simplified regulations. This creates a favourable environment for REIT development. Market Potential: Indonesia boasts a thriving economy and a burgeoning middle class, driving demand for diverse real estate sectors. DIREs offer investors exposure to this growth potential through various property types. Challenges and Opportunities: While the market is promising, liquidity concerns and limited diversification options remain challenges. However, government efforts to encourage broader sector representation and improve market depth are underway. Investment via a REIT Scheme Review Double taxation hurdle cleared for Indonesian real estate investors! The government recently made a big move, eliminating double taxation for anyone investing in property through a special program called the “Collective Investment Contract” (CIC). You can now invest in Indonesian real estate and keep more of your hard-earned money. Think of it like this: Imagine a group of friends wanting to buy a building together. Instead of each person buying directly, they pool their money in a joint account and appoint someone to manage it. The CIC does that for real estate investments, similar to REITs Indonesia. You join forces with other investors, combine your money, and reap the benefits of owning income-producing properties. Previously, investing this way meant paying taxes twice: once on your share of the profits and again on the group’s activities. But thanks to the new regulation, that’s no more! You keep more of your profits, making it a much more attractive option for investors. So, if you’ve ever dreamed of owning a piece of Indonesian real estate, now’s the time to explore the CIC program. It’s a simpler, more tax-friendly way to invest and potentially enjoy a steady stream of income from your property holdings. REITs Investment Limits Real estate assets, such as buying an office building and renting it out. Assets related to real estate, such as buying shares/bonds of property companies In the form of cash or cash equivalent Overview of prospective licenses and permits required to conduct business operations The creation of the DIRE-KIK and the transfer of the land and building assets into the DIRE-KIK involves the following steps: Establish DIRE-KIK; Appoint Investment Manager and Custodian Bank to manage DIRE-KIK and oversee and execute cash handling and payments, respectively Relevant parties, including Holdco to subscribe for units in the DIRE-KIK; Dire-KIK uses the funds to acquire: The shares of existing companies owning the land Establish its own PMA company, inject the funds into the PMA, and the PMA company acquires the land and building assets. The Benefits and Disadvantages of Reits in Indonesia Investing in REITs certainly has