- Home
- Property Legal Services
- Due Diligence
Due Diligence
Property Legal Services
- Share:
Due Diligence - Who is it for and Benefits
The process of buying and leasing property in Indonesia could be easy if you have a comprehensive understanding of your rights as a buyer/lessee/lessor. There are, however, a range of issues that may affect your future investment.
For decades, property registration was carried out through handwritten records. It was not uncommon to find two official land certificates for the same plot of land. The Indonesian government recently launched a digital land certificate system. Due diligence serves as investigative documentation and property inspection before a real estate transaction takes place.
This is essential to ensure the property is free of legal issues, free of encumbrances, and meets the buyer’s expectations. The goal is to identify potential risks and liabilities associated with the property and make a decision based on those findings.
Engaging a reputable and experienced legal consultant can significantly contribute to a successful due diligence process in Indonesia, as it ensures that potential legal risks are identified and addressed, providing clients with valuable information for making informed business decisions.
What are the Types of Due Diligence?
There are various types of due diligence conducted in business transactions, each focused on a specific aspect of the company’s financial position. The most common is financial due diligence, which analyses financial statements, cash flow, and projections to assess the company’s financial health.
Legal due diligence examines contracts, litigation, regulatory compliance, and asset ownership to identify potential legal risks. Commercial due diligence evaluates a company’s market position, customers, competitors, and growth potential.
In addition, there is operational due diligence that assesses the efficiency of various types of operational costs and internal systems, environmental due diligence to identify environmental risks and liabilities, tax due diligence to check tax compliance and potential company tax liabilities, and HR due diligence that analyses organisational structure, employees, and human resource-related issues.
Steps to Conduct Due Diligence in Indonesia
- Consult the assets you would like to include on the Deed.
- Our notary team will assist with drafting the Deed.
- Once finished, we will contact you to schedule to seal the Deed.
Frequently Asked Questions
During due diligence for property in Indonesia, legal aspects to consider include:
- Ensure the seller has legitimate ownership of the property and verify the land title to avoid potential disputes.
- Check if the property has all the necessary permits and licenses from relevant authorities for its intended use.
- Understand the zoning regulations to ensure the property is suitable for the intended investment purpose.
- Identify any mortgages, liens, or legal claims on the property that might impact the transaction.
Generally, due diligence for a property in Indonesia can take anywhere from a few weeks to a few months. Connecting with a reliable legal consulting agency like LMI Consultancy will be able to provide more tailored information based on the specific circumstances of the property transaction.
The essential documents for property due diligence in Indonesia typically include all types of land documents according to the applied regulations. The documents can be in the form of: – A land certificate (Hak Milik), location permit (Izin Lokasi) – Building permit (Izin Mendirikan Bangunan) – Land use permit (Izin Penggunaan Tanah); – and any relevant licenses or approvals from local authorities.
- Land certificate (Hak Milik), location permit (Izin Lokasi), building permit (Izin Mendirikan Bangunan)
- Land use permit (Izin Penggunaan Tanah)
- Any relevant licenses or approvals from local authorities
Need more information about Home Ownership Credit? Check out some of our guides!
- Can expatriates get a mortgage in Indonesia
- Steps to get a mortgage in Indonesia
- Understanding KPR products in Indonesia
- Why It's Important to Use a Mortgage Consultant
Popular Services
- New Mortgage Property
- Primary Mortgage for First Buyers
- Mortgage Consultation Services in Indonesia
- Due Diligence
- Share:
Popular Services
Interesting News
Get Your Free Consultation Now!
News & Resources
Get to Know Latest Business & Visa Updates
As times goes by, every sector, including land in Indonesia, is constantly prioritising the latest technology. The Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) has introduced innovation by issuing electronic land certificates. The implementation of electronic land certificates involves more than just physical changes to documents; it also has significant impacts on […]
LMI Consultancy
October 7, 2025
Land and Building Tax (PBB) is a very important source of regional original income (PAD) for the DKI Jakarta Provincial Government. The money obtained from the SPPT PBB-P2 is used to pay for various development programs and public services that are crucial for all Jakarta residents. However, the DKI Jakarta Provincial Government understands that not […]
LMI Consultancy
October 7, 2025
The extension of Building Use Rights (HGB) is an important matter for property owners, especially those with land. The HGB certificate confirms the right to build on land that does not belong to the owner. This is different from the Freehold Certificate (SHM), which is valid for life. If the HGB period expires, an extension […]
LMI Consultancy
October 7, 2025
Marriage is a special moment that marks a new chapter in life. In Indonesia, in addition to preparing for customary and religious weddings, couples also need to consider the legal aspects, one of which is through a Prenuptial Agreement (Prenup) or Postnuptial Agreement (Postnup). What is a Prenuptial Agreement in Indonesia? In Indonesia, a Prenuptial […]
LMI Consultancy
October 7, 2025
In the world of property investment in Indonesia, particularly corporate and commercial property, mastering the art of legal due diligence is a crucial step before making any investment decision. This process involves a series of steps to gather accurate and comprehensive information about the property to be purchased. Let’s delve into the steps in detail! […]
LMI Consultancy
October 7, 2025
Buying property in Indonesia with PT PMA, is it possible? PMA, or Penanaman Modal Asing, is a form of legal entity that can be used by foreign investors to own a company in Indonesia. In addition to its corporate function, PT PMA is also said to be the safest way for foreigners to own property […]
LMI Consultancy
October 2, 2025
