Legal Validity of Nominee Agreements in Land Ownership by Foreign Nationals and Notary Liability in Indonesia
DOI:
https://doi.org/10.30652/29sdfq11Keywords:
Foreign Investment, Nominee Agreement, Land Ownership, Notary Liability, Indonesian Land LawAbstract
Foreign investment in Indonesia contributes positively to the country's economic growth but may also pose challenges, particularly in the realm of national land ownership. Indonesian law, under the Basic Agrarian Law (UUPA), recognizes the principle of nationality, which grants ownership rights over land exclusively to Indonesian citizens. To circumvent this restriction, foreign nationals often use nominee agreements with Indonesian citizens, allowing the nominal holder to act as a proxy while the foreign party retains the actual benefits of land ownership. This practice, however, conflicts with the provisions of Article 21 and Article 26(2) of the UUPA, which prohibit the direct or indirect transfer of ownership rights to foreigners, rendering such transactions null and void, with the land reverting to the state. Notaries are frequently involved in formalizing nominee agreements through authentic deeds, raising questions about the legality of such acts and the notary's responsibility. This study examines the legal validity of nominee agreements and the accountability of notaries in facilitating these transactions, using case analysis, including the Denpasar District Court Case No. 325/PDT.G/2014/PN DPS and subsequent appeals. The findings highlight the tension between foreign investment practices and Indonesian land law, emphasizing the role of notaries in upholding legal certainty.
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