Prenuptial agreement in Indonesia is an agreement you sign with your partner before performing the marriage. The date when you execute it must shows clearly that it is being entered on or before the legal marriage date. I have reason to believe that your legal marriage date may be different than the solemnization date. It because the marriage in Indonesia is considered legal when you perform the religious marriage prior the civil ceremony, unless of course, if you were married in Moslem rites. The latter requires no civil marriage registration. So, the prenuptial agreement must be entered into before the date of the civil marriage, the legal one.
Prenup: The Beginning
Let’s have a look what the law said about it in Article 119 of Civil Code stipulates that from the moment of execution of the marriage, it shall arise by law joint marital property between the spouses to the extent that no other stipulations have been made in the pre-nuptial agreement. There you go, the prenuptial agreement must be executed before the marriage. Beside, if you did not sign any prenup, you will have joint property ownership. This condition is preventing your Indonesian spouse to keep owning a property after she/he married to you.
The validity of a prenup begins when you and your partner sign it and register it with the marriage registry. The laws said it is valid when the officer at the marriage registry is to legaize the prenup. So, they are actively legalising the document. While in fact, they are only conducting registration of the prenup together with the registry of your marriage. This is extremely important because this action giving you a legal recognition to make the prenup valid between you and your spouse. Without this, your marital agreement is nothing but worthless piece of paper. It has no legal effect and won't do any good for your mixed-marriage life in owning a property in Indonesia. The registration of the prenup applicable to all the marriages performed and registered under the laws of the Republic of Indonesia, in accordance with the Circular Letter of Civil Registry Directorate General number 472.2/2017 for Non-Moslem, and Circular Letter of Ministry of Religion Number B.2674/DJ.III/KW.00/9/2017 for Moslem couples.
I am an old-fashioned guy, so I would recommend to register the prenup with a district court. This is to make your prenup valid legally against third party. Your property ownership involves other third party such as the government, banks, creditors, etc. The publicity requirement is met when you're registering the prenup with a court. Please refer to Article 152 of Civil Code that states: "No stipulation in the prenuptial agreement which deviate entirely or partially from the provision regarding legal community property shall apply to third parties, earlier than from the date of copying such stipulations in a public register, which shall be done with the court clerk at the court of justice, within those legal jurisdiction the marriage was executed."
One item missing in your prenup might cause it challengeable. This can be a potential loophole you don't want to miss. At Wijaya & Co, we always pay attention to details of our client’s case. You better have an umbrella when it does not rain, instead of you don't have one and it gets rain. Indeed, it won't stop the rain, but at least it will make you stand in the rain.
Which Prenup is for You?
In the event you are a foreigner planning to marry to an Indonesian, the prenup have certain issues that must be addressed to. First, we have many types of the prenup, You need to get the right one. Failure to do so will affect the ability of property ownership in your mixed marriage. You need to get a prenup with total separation of property. This is applicable to both the assets and debts of the couple. Don't use the one that suggesting joint property ownership. This one is the last thing you need. They have an old Dutch term for this: "Gronds verponding verbood." Forgive my rusty Dutch. The idea of having this type of prenup is because the laws forbid foreigners to own lands in Indonesia. Article 26 (3) of Basic Agrarian Law imposed that in the event by marriage, inheritance, or by any other means she/he loses the citizenship of Indonesia, he/she must transfer the title of the land to other third party or the state will take possession. Please contact me should you wish to draw-up a more suitable prenuptial agreement that just right for you!
In terms of mixed-marriage, I would say the above situation only applicable if you marry to a foreigner and your status in owning the property is legally affected by your foreign spouse. Since the property falls into the definition of joint property, both of you co-own the assets and therefore require consent from each other. This is not good. In any way, the consent may not be retrieved because the foreigner is not in the legal position to own the property in the first place. The ideal situation is no consent is required from either party to execute any property transaction. Either party is independently to act on his/her behalf. The idea is to keep the land with the Indonesian only.
The Assets Transfer
Second, legal constraints as set-out by Article 21 of Basic Agrarian Law certified that an Indonesian is precluded to own a freehold title after she married to you as a foreigner, without any prenup. In the event, the Indonesian spouse passes-away, you may keep the property for 12 (twelve) months. Unless, if you transfer the title to other Indonesian. Transfer means you can sell it, give it away or inherit to your child, provided she/he is an Indonesian, of course. Standard tax rate is applicable for this transaction.
You can also to downgrade the title from Hak Milik (freehold title) to Hak Pakai (Leasehold). It valids for twenty years or so. You can renew it after. This can be the smart solution if you want to keep the property for quite a while. Until you know what to figure out next.
Next of Kin
The third one, you should consider the inheritance to you next of kin. Inheritance issues in Indonesia are referred to a person’s religious affiliation. If you were in Moslem family, the people in layer one, the next of kin in the event one passes-away, are very crowded. If you want the assets distributed to just the surviving spouse and the children, and prevent the other extended families to even touch them, you should consider a last will. Seriously.
You can specify your spouse as an administrator of your assets after you're gone. You can also nominate the other person, like your sister acting as one of the other administrator, should your surviving spouse is not available or is not able to execute your last will. This is what we called estate planning. This has to be done correctly and with the right way. Please contact me should you wish to discuss any further about this. You can drop me an email or give me a call to have a free assessment of how can you move forward with the solution available for you.
My name is Asep Wijaya. Thank you for reading my posts!
Our thanks to Asep Wijaya, Managing Director of Wijaya & Co for sharing this information with us!