Vehicle Ownership for Foreigners in Indonesia – If you are a foreign citizen and want to have a vehicle in Indonesia, this information that we are sharing might be useful to you. Let’s start with the first question, is it allow for a foreigner to own a vehicle in Indonesia?
Based on our research, basically there are no provisions that prohibit foreigners to buy vehicles in Indonesia for his personal ownership. This can be seen from the motorized vehicle registration and identification carried out by the police.
Motorized Vehicle Registration and Identification (“Regident Ranmor”) is a police function to provide legitimacy of origin and feasibility, ownership and operation of vehicle, control functions, police forensics and services to the community through verification, recording and data collection, numbering, publishing and granting proof of registration and identification of vehicle, filing as well providing complete information.
Those all are as stated in Article 1 number 5 of the Regulation of the Head of the National Police Republic of Indonesia No. 5 of 2012 concerning Registration and Identification of Motorized Vehicles (“Perkapolri 5/2012”).
Regident Ranmor also carried out on motorized vehicles owned by foreigners in Indonesia the provisions can be seen from Article 10 paragraph (2) of the Head of the National Police Republic of Indonesia 5/2012 which is below:
(1) Regiment Ranmor routinely as referred to in Article 9 paragraph (1) includes:
- New vehicle;
- Changes in vehicle’s details and owner’s identity;
- The transfer of ownership of vehicle;
- Replacement of Regident Ranmor evidence;
- Vehicle extension; and / or
- Vehicle’s validation.
(2) Implementation of Routine Regident Ranmor as referred to in paragraph (1) shall be carried out on vehicle owned by:
- Indonesian Citizen;
- Foreign Citizens who have a Temporary Residence Permit (KITAS) or a Permanent Stay Permit (KITAP) in Indonesia;
- Government agencies other than the national army or national police; and Indonesian legal entities or foreign legal entity with a permanent office in Indonesia.
Referred to the regulations above, we can conclude that foreigners may own a vehicle on his/her own behalf in Indonesia.
But different regulation applies if the foreigners bought the vehicle by applying for credit to the bank. Banks in Indonesia allow Indonesian citizens who have a foreign spouse to get credit with certain collaterals and conditions. Based on Article 3 of Bank Indonesia Regulation Number 7/14 / PBI / 2005 concerning Rupiah Transaction Limits and Provision of Foreign Currency Loans by Banks (“PBI 7/2005”), banks are prohibited from giving credit both in rupiah and in foreign currencies to foreign parties.
Foreign parties as referred to the regulation include: (Article 1 number 2 PBI 7/2005)
- Foreign nationals;
- Foreign legal entity or other foreign institution;
- Indonesian citizens who have permanent resident status in other countries and not domiciled in Indonesia;
- Overseas bank offices of banks with head offices in Indonesia;
- Overseas company offices of companies incorporated in Indonesia.