In terms of the Indonesian legal system, the three most commonly used services in the legal profession are notaries (notaris), lawyers (pengacara) and legal advisors (konsultan hukum).
Notaries must hold a Bachelor of Laws (SH), Master of Notarial Law, courses in ethics and company registration, and one year of practical training as a certified notary. Licenses to practice are issued by the Ministry of Justice. Notaries usually provide legal advice and handle civil and commercial agreements/contracts, leases, deeds and company registrations. Many notaries also hold a PPAT license issued by the Ministry of Lands, which qualifies them to handle transfers of land titles.
Lawyers must hold a Bachelor of Laws degree “SH”, followed by an advocacy training course and a period of practical training in a registered law firm. The license to practice “SK” is issued by the Regional High Court. Lawyers typically provide general legal advice, handle criminal cases, breach of contract, immigration issues, litigation and court representation.
The most common mistake I see investors make when seeking professional legal advice is that they often go to a lawyer when they should be hiring a notary and vice versa. This is especially common for those of us from the Anglo-Saxon system, the function of the notary is to witness the signature, they do not need to have any legal knowledge, usually the local postman, hotel manager or tavern keeper. In the Indonesian system, a notary is the most qualified legal professional and the only person who can enforce commercial contracts on behalf of clients. Making the wrong choice is not fatal as you may end up in the correct office, but may waste valuable time and money in the process.
Another misunderstanding arises when a foreigner is mistaken for the person with the SH to be a qualified lawyer or notary. SH means the person has a Bachelor of Laws degree, which does not qualify them to practice law, just that in western countries. Compounding this confusion is the fact that there are many dodgy agencies in Indonesia issuing SH qualifications, just like the dubious off-field qualifications offered in Western countries or online these days.
Before engaging the services of a lawyer or notary, it is best to have them show you their SK license. I assure you, they will be more than happy to show off their qualifications as these two titles are considered high positions in Indonesian society where only a few people have higher education. If they are unwilling or hesitant to show you their credentials, think twice before hiring them.
Try to find a lawyer or notary who can speak your language to a level you can understand. Local friends who pass through “not so good” English can be costly when dealing with legal documents. Leaving your notary office “thinking” about what you know you agreed/signed is a recipe for disaster. All documents are officially translated before signing.
The third category that you are likely to encounter in your legal career is the Legal Adviser/Advisor (Konsultan Hukum). These businesses are usually owned by professionals with connections to qualified lawyers, notaries and government officials. They usually provide a package of services such as arranging notaries and lawyers as needed, translations, licenses, permits, visas, etc. They can be useful if you are not confident handling the various offices yourself and want to save time as usual, having a professional network for common transaction needs.
It is common for legal advisors to combine their services with business and investment advisory services. For example, they can act as advisors on investment or development projects and also manage relationships with government departments and local community leaders. Finding a consultant that you feel is right should include visiting several companies that already offer the range of services you need, and negotiating a fixed price for the services before contracting. Likewise, find a consultant who speaks your language and is at a competency level, and remember that consultants are only as good as the networks and professionals they hire; so don’t be afraid to ask about the qualifications of the experts they use.
In general, relocating to or starting a business in another country is never an easy process, even when dealing with similar cultures, languages and legal systems. However, it becomes more challenging when you add different languages, laws and traditions. Therefore, one must be disciplined and methodical and exercise careful judgment at every step. There are some useful general guidelines to keep in mind:
Professional advice in Indonesia is relatively cheap; verify qualifications and background and hire the best.
If you are buying a property, do professional due diligence; for example, you don’t want your home to be on a 30-year lease, but your access rights to be on a 15-year lease.
Be discerning: Don’t always take things at face value and ask for a second opinion.
Start by opening your own bank account; have your own safe at the bank; and keep all your important documents for yourself.
Hire a professional or consultant who provides independent advice. Using the same agent you used to buy your property to arrange your legal matters and licensing may be convenient at the time, but it can also leave you very vulnerable later on if you make the wrong choice in the first place.
Doing things the legal way in Indonesia is not as difficult as many people think. Basically, by taking a similar level of caution to when you were at home and avoiding some of the major pitfalls discussed above, you can ensure that the transition to your new home, company or life is as smooth as possible.
Then you can start the real work – enjoying the Bali life.
Daniel O’Leary
