THE ANAMBAS ARCHIPELAGO FREQUENTLY ASKED QUESTIONS

1.       What type of development can I put on the land buy in Anambas?

Any tourism or tourism supporting development.  It can be villas, units, hotels, apartments, recreational developments and clubs, infrastructure to support eco-tourism, overwater structures and villas, restaurants, café’s, boat hire and float plane hire to name but a few of the many options. Given the archipelago’s position on the development curve, many options would also provide the benefits of an initial monopoly situation.  You can also build a single dwelling for yourself as part of development, but the land should be developed for tourism or tourism related Industries.  As always, the development will be subject to government approvals.

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2.       What size of development can I put on the land?

In most cases, the development can be up to 70% of the total surface area of the land.  A typical development will have 10% of the surface area under roof and 30-40% as developed grounds, leaving plenty of scope for most developments other than multistorey apartments or condominiums. There is no firm limit on the number of dwellings permitted.  To calculate the available development scope for a land area you are considering, use this formula.  [Unit size] x [number of units] x 4 / total land area.  If the result is 50% or less, you should have no issues proceeding, if the result is 50-70% your development will require further information, if the result is 71% or greater it is unlikely your development will be approved.

3.       What Utilities and Services are available on the islands?

You will need to establish your own water and power supply.  For a small development the costs are very modest (less than $3,000 for 1.5 tonnes per day water desalination for example) and for large developments the costs average less than 2.5% of the construction costs.  The installation of solar power generation with battery storage is highly recommended and aligns with the principles of construction within a designated marine conservation area like Anambas.

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4.       How can I get confirmation that development sizes or types will be approved?

Once an offer and refundable deposit have been received, and a site master plan submitted, the due diligence process undertaken by our team will show indicative responses from various government departments on their opinions of the size and type of development and this information will be provided back to the buyer, prior to purchase.  Once the land has been purchased, the formal process of approvals will provide a definitive guide as to the exact size and layout that will be permitted in the development.

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5.    How long does it take to get approvals and start construction?

Once a simple master plan has been drafted, the process will take 6 months for simple and smaller developments (up to 20 villas with common areas, pools etc), which is generally shorter than the time to plan and schedule the construction, obtain all the quotes, appoint vendors and clear the land in preparation so that you are ready for construction.

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If you have larger or more complex developments, for example requiring changes to title, rezoning, subdivisions or major over water constructions or hybrid sale, lease and short term stay resorts, you should allow at least 12 months.  Again, by the time all the preparation is done for construction on larger and more complex developments, you should be able to commence immediately.

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6.    Can I buy the land as an investment, not develop and then resell It?

Typically, the land should be purchased for tourism development.  You can buy the land, master plan a development, obtain all approvals, and then sell the land, however buying the land and not undertaking a development application will often result in excessive holding costs, and may jeopardise the land titles remaining as suitable for development which may significantly devalue your investment.

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7.    Where can I get the latest information of land available?

As the leading real estate group serving the Anambas archipelago we have the most up to date information, new options are broadcast as soon as due diligence has been completed by our local team on the land and land ownership.  In addition, there is always the bespoke land search option available to find that very specific island or plot you may need.

8.       What if I want a section of the available land, more land, or I find something on google maps?

A bespoke land search option is available and can assist to provide you with a shortlist based on your exact specifications, please contact us with the details and we can provide a quotation.  As a guide, bespoke land search costs (typically a short list of 3-4 sites, based on your specific size, budget and intended use) are between $12,500.00 to $20,000.00 USD.  A list of inclusions and optional services is available on request.

9.       What if I want to visit the site?

An escorted site visit service with English speaking staff is available, and costs between $3,000 - $4,000 USD ex Nongsa Point Marina Batam (a $20 / 25-minute ferry ride from Singapore).  The costs include planning, scheduling and bookings for your trip, air, ground and sea transport, accommodation, charter boat hire and staff wages.  You can typically get 3-4 site viewings per day depending on weather and locations.  Allow a day’s travel each way to and from Anambas, so typically a 3 day round trip for 3-4 sites. Extended and bespoke itineraries are also available.

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10.   What if I want further information on a particular site?

Our team can obtain additional aerial or underwater footage, or engage contractors for LIDAR topography surveys or bathymetry surveys, contact us with the details required and we can provide you with a quotation.

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11.   What type of land title do I acquire when purchasing the land?

The title is called “Hak Guna Bangunan” or “HGB”, the direct English translation is “The Right of Building”. Further information on land title options, please refer to the additional information listed in “Land Purchase Methods “, and always obtain independent legal advice when purchasing land in foreign jurisdictions. Should you require introduction to a reputable law firm we can help.

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12.     What are the ongoing costs of land ownership?

The ongoing 25-30 year title registration renewal fee for “HGB” title as required under Indonesian law, costs approximately 1% of the unimproved land value.  Note this does not include business license renewal or company registration renewal both of which will be required and are minor costs.

For further information on land title options, please refer to the additional information listed in “Land Purchase Methods “, and always obtain independent legal advice when purchasing land in foreign jurisdictions.

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13.   What corporate structure do I use to purchase land for a simple or small development?

In Indonesia the company is called a “PT-PMA” (Perseroan Terbatas Penanaman Modal Asing), it is a foreign owned limited liability company and is the Indonesian version of a “Pty Ltd” or “Pte Ltd” company.  You can either buy the land using this PMA company that you establish, or for larger purchases (+$500k USD) a PMA company will be established for you that already holds the land title(s) and then you, or your offshore company, purchases the PT-PMA containing the land titles. The cost of starting a PMA company is typically around USD$6,000 and the associated business licenses are a few hundred USD, depending on the nature of the proposed development.

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14.   What corporate structure do I use for a more complex development?

For larger and more complex developments (for example where parts of the development will be leased out, subdivided or on sold.  Or where whole islands are purchased. Or for flexibility in domiciling taxation and operational income.  The titles will be acquired into a corporate structure that is established for you based on your circumstances, the type and size of the development you anticipate, and also the location, size, type and zoning of the land you are developing on. 

The above structure will be discussed and agreed with you and under the guidance of lawyers prior to settlement of the purchase.  Once agreed it will be incorporated by an established and experienced legal company between the date of land deposit and the date of settlement, and then you, or your offshore company will purchase the resultant corporate structure containing the land titles.

The benefits of the above method of purchase are numerous, but are outside of the scope of this FAQ, please contact us for more information if required, and always obtain independent legal advice on the purchasing structure best suited to your personal circumstances and desired taxation position.

15.   Can I on sell the land before or after development?

Yes.  There are no restrictions as long as you have completed the purchase of the land titles.  You can just sell your PT-PMA company which contains the land titles and owns the development.  The process is like selling of developments in most parts of the world.

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16.   Can I buy land remotely?

In these challenging times of Covid, we have developed simple and clear processes in collaboration with a local law firm of English-speaking staff and a notary team, to enable you to safely and securely purchase a site remotely.  Quite often the costs associated with us acquiring site information on your behalf is less than the costs of a site visit coming from Europe or the United States. However, we do understand there’s no better way than to walk the soft sands, dive the corals and watch the sunsets yourself, so of course, we welcome site visits.