TransNational (Mixed) Marriages & Property Rights

        

There are several laws with overlapping articles concerning transnational marriages and property ownership including:

• the Basic Agrarian Law (UU 5/1960 or "UUPA" - Undang-Undang Pokok Agraria) 
• Article 33 Section 3 of the Indonesian Constitution (Undang-Undang Dasar 1945/UUD 1945)
• the 1974 Marriage Law
• Law No. 7/1984 on the ratification of Convention of Elimination of All Forms of Discrimination against Women (Cedaw)
• the Citizenship Law
• the 1996 Government Regulation on property rights. 

The 1996 Government Regulation on foreign ownership stipulates that only Indonesian citizens can own property. However, that changes if an Indonesian marries an expatriate.

An Indonesian (man or woman) in a transnational marriage may lose their right to possess land because according to the Marriage Law and Law No. 7/1984 on Cedaw ratification every possession that is purchased by a mixed couple after they are married is considered a collective possession. The couple would lose the right to own land because one of the parties was an expatriate. 
 

Under the Marriage Law No. 1/1974, both the wife and husband, irrespective of their nationality, have equal rights to family assets. But this is contradictory to the Land Law No. 5/1960, which states that foreigners cannot own land in Indonesia.

As a result, an Indonesian spouse (husband or wife) who married a foreigner loses their  rights as a citizen to buy land and borrow money from a bank for marrying a foreigner. It is discriminatory and contradictory. 

To circumvent or get around this, if the couple managed to have a prenuptial agreement in place before they got married, then the house that had been bought in the name of the Indonesian wife or husband's name would not be encumbered later in a subsequent sales transaction, inheritance, etc because the house will be considered the Indonesian wife or husband's sole possession and not that of the foreign husband or wife in a joint tenancy, tenants in common or tenants by the entirety form of property ownership.

We'll definitely have to watch for legislation affecting all this, as this issue of transnational or mixed marriages in Indonesia with respect to children, property rights, inheritances, etc is a big issue...

Foreign Spouses Married to an Indonesian to be Granted Permanent Resident Status ?

As reported in What's New Jakarta:

Changes to mixed-marriage law?: The draft amendment which proposes that foreigners married to Indonesians will be able to be granted permanent resident status, has been sitting with the House of Representatives since July 2009. It has however been brought back into public attention recently with the support of house members. This will allow foreigners who are married to Indonesians to stay in Indonesia without the need for a work permit. This will also apply to adult children from the marriage as well. Let's hope that the amendment get passed sometime soon and brings Indonesian immigration laws in line with the rest of Asia.


As I understand the proposed legislation, a foreigner who is married to an Indonesian and who obtains a Permanent Resident or "PR" immigration status is NOT concurrently granted a work permit, NOR will the foreign PR be allowed to purchase real property (a home) in absolute, freehold estate or fee simple form of property ownership (Hak Milik).  So, what is the point in having a "PR" then if I am not free to seek gainful employment and work here or buy and invest in a residential property?!

The "PR" would only allow me to travel back and forth to Indonesia more freely, without having to obtain a multiple or single entry Limited Stay (Social Visit or Family Unification) Visa and a KITAS (temporary stay permit) or without having to go out of the country (e.g. Singapore) then re-enter to renew the Limited Stay Social Visit Visa and reset the clock or start the process over again.  The "PR" does not allow me to work in Indonesia.  So what's the point in even having one?!

Additionally, the "PR" would make me subject to income taxes here in Indonesia, and by U.S. State Department personnel classification and definitions would make me an "OR" (Ordinarily Resident) and I would be paid (assuming I could get a work permit) under the Local Compensation Plan or "LCP" rather than earning an "expat" type of salary.  So, it would actually be STUPID to get a "PR" from Indonesia if I intended somehow to work here because then I am no longer an "expat" and would be paid the local wage (assuming I could get a work permit).

Here is an excerpt from the U.S. Department of State Foreign Affairs Manual Volume 3 - Personnel Definitions, which illustrates my point:

Locally Employed Staff (LE staff):

The general term used for Foreign Service nationals, as well as some U.S. citizens who ordinarily reside (see definition for ordinarily resident in this section) in the host country and are thus subject to its labor law. LE staff are employed at a U.S. mission, or at an office of the American Institute in Taiwan by the U.S. Government under the authority of the COM and are paid under the LCP. For USAID, LE staff are paid either under the LCP or under the General Schedule scale in accordance with AIDAR Appendices D and J.

Not Ordinarily Resident (NOR):

An individual who:

(1) Is not a citizen of the host country; and
(2) Does not ordinarily reside (see definition of ordinarily resident in
this section) in the host country; and
(3) Is not subject to host-country employment and tax laws; and
(4) Has a U.S. Social Security Number (SSN).

NOR employees are compensated under a General Schedule or Foreign
Service salary schedule, not under the local compensation plan. For USAID,
such individuals are personal services contractors referred to as “offshore
USPSCs” or “internationally recruited USPSCs,” and subject to U.S. Federal
taxes: Federal income tax, FICA, and Medicare. An individual’s contract
includes a position description which is classified using the General Schedule
scale for direct hires, and compensation is paid within the salary range for
that classified position. USAID does not compensate its personal services
contractors under the Foreign Service salary schedule.

Ordinarily Resident (OR):

A foreign national or U.S. citizen who:

(1) Is locally resident; and
(2) Has legal, permanent resident status within the host country; and
(3) Is subject to host-country employment and tax laws.

All OR employees, including U.S. citizens, are compensated in accordance
with the LCP. USAID distinguishes between U.S. citizens living within the
host country and citizens of the host country (FSNs). (See USAID’s
Acquisition Regulation (AIDAR Appendices D and J). U.S. citizens living in
the host country are referred to as “local hires” or “resident hires” and
compensation is based upon the job classification and advertisement: if the
position is classified using the General Schedule scale (the same as used for
direct hires) and advertised as such, compensation is paid in dollars within
the salary range of the position; if the position is classified and advertised
using the local compensation plan, compensation is paid in accordance with
the LCP. Regardless of the compensation method, U.S. citizens are required
to pay U.S. taxes, FICA, and Medicare. FSNs are compensated under the
LCP, unless a deviation is approved by the USAID mission director in
accordance with AIDAR Appendix J.