INDONESIA Law and Practice Contributed by: Yogi Sudrajat Marsono, Heru Pamungkas, Agnes Maria Wardhana and Andin Aditya Rahman, Assegaf Hamzah & Partners
• the property is free from any encumbrance, mortgages, claims and/or disputes from any third party. Common warranties in a commercial property transaction are as follows: • the seller is not currently undergoing bank - ruptcy proceedings or suspension of debt repayment – this is particularly important post-pandemic; • there are no joint ownership, physical occu - pation or any other claims from any third parties; and • the property has no outstanding tax obliga - tions. Representations and warranties typically survive the closing of the transaction, with no limitation on the liability for breach of representations and warranties, unless expressly agreed otherwise. In the event of misrepresentation, the buyer typi - cally has the right to initiate legal proceedings against the seller to seek remedy or compen - sation. Indemnity terms may also be included, which provide options for refundable payments, price adjustments or contract termination with compensation. 2.6 Important Areas of Law for Investors For corporate investors seeking real estate for business purposes, noteworthy areas of law include: • company law and regulations, most nota - bly Law No 40 of 2007 on Limited Liability Companies, as amended by the Job Creation Law (“Companies Law”) – investors typically opt to establish a PMA Company to facilitate real estate acquisition or to acquire shares in a domestic company;
• investment laws and regulations, particularly to identify sectors that are open to foreign investment or reserved for domestic players, and sectors that necessitate partnerships with local micro, small and medium enter - prises; • business licensing regulations, outlining the requirements for the location and ownership of property for specific business activities (for example, manufacturing companies and data centres must be located in an industrial estate); • spatial planning laws and regulations, regulat - ing spatial designation and utilisation from city/region to national level, with which all business activities must comply; • building laws and regulations, which regulate the requirements for building construction and utilisation; and • environmental laws and regulations, mandat - ing licences for environmental management, such as waste management and emission standards. Other notable areas of law applicable to corpo - rate and individual investors include: • housing and apartment laws and regulations, which are pertinent for corporate investors involved in developing housing, settlement areas and apartments, as well as for individu - al investors or expatriates seeking residence in Indonesia; and • tax laws and regulations, which regulate the application of taxes in the sale and purchase of real estate. 2.7 Soil Pollution or Environmental Contamination Law No 32 of 2009 on Protection and Man - agement of the Environment, as most recently amended by the Job Creation Law (“Environ -
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