INDONESIA Law and Practice Contributed by: Maria Sagrado, Frederick Simanjuntak and Stephanie Kandou, Makarim & Taira S.
These forms of security include the following. Mortgage Land and land-related objects in Indonesia can be secured by a mortgage. The “objects” or “goods” of a mortgage include buildings, plants and produce, both existing and future, which form an inseparable part of the land, regardless of whether the land-owner (titleholder of the land) owns the buildings, plants or produce. To secure land as collateral, both the lender and borrower must – in the presence of a Land Deed Official ( Pejabat Pembuat Akta Tanah – PPAT) where the land is located – sign a notarial deed in Indonesian ( Akta Pemberian Hak Tanggungan – “Mortgage Secu- rity Deed”). In practice, if the transaction involves a foreign lender, the lender may appoint a local security agent to appear before a PPAT or to sign a power of attorney authorising certain persons to sign the Mort- gage Security Deed before a PPAT (known as Surat Kuasa Membebankan Hak Tanggungan ). A lender (or the appointed security agent) will then then register the mortgage security with the Land Office through the electronic mortgage system ( Hak Tanggungan Elektronik – HT-El) using their account. Once the required documents (including a copy of the land certificate) are submitted, the mortgage will be registered. The HT-El will then issue (i) an HT-El cer- tificate and (ii) an annotation on the mortgage for the relevant land certificate. By law, the HT-El registration process may take up to seven working days as of the submission of complete application documents. A Mortgage Security Deed must be prepared by a PPAT and the fee for preparing the deed depends on the appointed PPAT. Specifically for a Mortgage Security Deed, the PPAT will typically charge based the secured amount. The Mortgage Security Deed is subject to official registration fees in the form of PNBP. The PNBP for Mortgage Security is ranging from IDR50,000/certificate for mortgage security with a value of up to IDR250 million to IDR50 million/cer- tificate for mortgage security with a value over IDR1 trillion. Fiduciary Security Fiduciary security is a non-possessory security right. The objects of fiduciary security are moveable assets,
whether tangible or intangible (such as receivables, insurance claims, inventory, machinery and vehicles), as well as immoveable assets such as buildings (which are not subject to a mortgage). Unlike the Mortgage Security Deed, a fiduciary secu- rity deed must be made in Indonesian in notarial deed form by a notary, and registered with the Fiduciary Security Registration Office (as evidenced by a Fiduci- ary Registration Certificate). The process to obtain the fiduciary security certificate usually takes 1–2 working days as of the submission of the complete applica- tion documents. Notaries in Jakarta typically charge between IDR10 million to IDR20 million per fiduciary security deed. The fiduciary security deed is also subject to official registration fees in the form of PNBP. The PNBP for fiduciary security ranges from IDR50,000/certificate for fiduciary security with a value up to IDR50 million to IDR13.3 million/certificate for fiduciary security with a value over IDR1 trillion. Hypothec Hypothec is a security interest applicable for immove- able assets. It was used for securing land before the mortgage security came into effect. However, as land cannot be secured by hypothec anymore, it is now primarily used for securing vessels that have a gross tonnage of more than 20 metric tons. For ves- sels having size lower than 20 metric tons, it can be secured by fiduciary security as noted above. It must be noted that hypothec security only applicable to vessels owned by an Indonesian individual or entity. Furthermore, although Indonesia has no regulation yet governing security over aircrafts, hypothec in prac- tice was also applicable to secure airplanes and heli- copters and the Directorate General of Civil Aviation were willing to accept the registration of such deed. However, following the enactment of the new Aviation Law in 2009, security over aircraft and helicopters are usually made under foreign security documents and registered with the International Registry. To perfect a hypothec over a vessel, both the lender and borrower must enter into a hypothec deed ( akta hipotek kapal ) before a Vessel Registration and Own- ership Recordation Official ( Pejabat Pendaftar dan
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