Notaries hold one of the most important roles in Indonesia’s legal and investment ecosystem. They are the gatekeepers of legality — the people responsible for ensuring that companies are structured correctly, leases are valid, shares are transferred properly, and that every party understands the rights and obligations created in a transaction.
In Bali, where thousands of foreign investors enter the market every year, a notary’s signature can determine whether a business stands on solid legal ground or is built on sand.
Yet today, Bali faces a growing crisis: not all notaries are acting with the consistency, transparency, or legal discipline that this rapidly evolving investment environment requires.
And the consequences are significant — for investors, communities, and even the province itself.
1. A Role That Has Become Too Important to Be Left Unchecked
A notary in Indonesia is not just a “document maker.” They are a public official with delegated authority from the state. They:
- Draft and legalize deeds
- Execute company formations (PT PMA, PT Local)
- Verify identities and legal capacity
- Register shares and capital structures
- Oversee property transfers and leases
- Ensure compliance with national regulations
Yet in Bali, the quality of notarial practice varies dramatically. Some notaries are world-class — professional, ethical, and fully updated on changing regulations. Others are not. Inconsistent notarial practices have become a structural risk to Bali’s investment climate.
2. The Most Common Problems Created by Weak Notarial Oversight
a) Incorrect or Illegal PMA Structures
Many foreign investors are unknowingly given:
- PMAs with the wrong KBLI codes
- Companies set up to operate in zones where their activities are illegal
- Capital structures that do not match the law
- Shareholder agreements that contradict Indonesian company regulations
A surprising number of PMAs in Bali are legally incorrect on day one.
b) Unregistered or Improperly Drafted Leases (Hak Sewa)
A lease is only strong if:
- It is properly drafted
- It is notarized
- It is registered with BPN
- Taxes are paid
- Both parties understand the obligations
Many leases in Bali fail one or more of these steps. This exposes investors to:
- Cancellation risk
- Double leasing
- Land disputes
- Problems securing PBG (building approval)
- Problems with SLF (operational feasibility certificate)
c. Misuse of Nominee Structures
Despite clear national rules prohibiting nominee arrangements for land ownership, some notaries still facilitate structures that:
- Give foreigners illegal control over land
- Put Indonesian nominees at legal risk
- Result in contracts that can be overturned in court
These arrangements may work until the moment they don’t — and by then, millions may be at stake.
d) Notaries Ignoring Updated Regulations such as PP 28/2025
Indonesia’s legal landscape changed significantly with:
- PP 28/2025 (Risk-Based Business Licensing)
- BKPM Regulation 5/2025
- Ministerial Regulation 6/2025
- Updated RDTR digital zoning systems
Some notaries have not adapted. We still see notarial deeds that reference outdated frameworks, incorrect licensing pathways, or zoning assumptions that are no longer valid. When a notary is behind the regulatory curve, the investor pays the price.
e) Inadequate Due Diligence Before Executing Transactions
A notary is supposed to verify:
- Seller identity
- Land certificates
- Encumbrances
- Disputes
- Inheritance risks
- Tax history
- Compliance with local regulations
But some notaries in Bali process transactions without thorough checks — especially when pressured by agents trying to close a deal. This is where many land fraud cases originate.
3. Why Notary Missteps Are Becoming More Serious in 2025–2026
Bali is transitioning into a fully digital licensing ecosystem, where:
- Zoning is checked automatically
- KBLI codes are matched with RDTR
- PBG cannot be issued in the wrong zones
- SLF will be mandatory
- Leases will be cross-verified
- Tax reporting will be monitored through OSS
Notaries who continue old practices will inadvertently create:
- Illegal PMAs
- Invalid leases
- Incorrect land-use documentation
- Structures that cannot pass the new digital checks
What previously “worked” informally will no longer work.
4. Notaries Are Not the Only Problem — The Market Environment Encourages Shortcuts
Several market pressures contribute to poor notarial outcomes:
👉 Agents pushing fast deals. Speed is often prioritized over legality.
👉 Foreign clients who don’t understand Indonesian law. Many sign documents they cannot read.
👉 Consultants offering incorrect advice. Some claim shortcuts are legal. They are not.
👉 No central oversight mechanism. Notaries operate independently and inconsistently.
This system leaves both Indonesians and foreigners exposed.
5. Why Bali Must Introduce Stricter Oversight Now
a. To protect foreign investors
A stable investment environment depends on trust. If investors lose confidence, Bali loses long-term economic potential.
b. To protect local communities
Improper land transactions harm villages, farmers, families, and adat communities.
c. To reduce legal disputes
The court system becomes overloaded with avoidable conflicts.
d. To align with national reforms
Jakarta is pushing for digital governance, licensing transparency, and legal modernization. Notarial standards in Bali must align.
6. What Stricter Oversight Could Look Like
A realistic reform package would include:
1) Mandatory training and certification updates. Notaries must stay current with PP 28/2025, RDTR, OSS, KBLI rules, and zoning.
2) A centralized digital notarial registry
Tracking:
• Leases
• PMA deeds
• Share transfers
• Notarial responsibilities
3) Random audits and penalties for misconduct. Ensuring accountability.
4) Requirements to register all leases with BPN. Eliminating double-deal risk and validating asset control.
5) Mandatory zoning verification before transaction execution. No deed should be signed without a zoning check.
6) Public transparency on notary performance. A ratings or compliance system could significantly improve standards.
These reforms would benefit everyone — notaries included.
7. The Role of BTIC: Bringing Structure to a Chaotic Market
The Bali Tourism & Investment Chamber (BTIC) was formed precisely because the investment ecosystem needs and why Seven Stones Indonesia supports this set up:
• Clear communication
• Verified regulatory guidance
• Support for responsible investors
• Alignment between national and local authorities
• A platform for identifying systemic problems
Notary inconsistency is one of the biggest systemic problems. BTIC can help facilitate:
- Dialogues with the Ministry of Law and Human Rights
- Educational programs for notaries
- Investor awareness materials
- Standards that enhance Bali’s reputation as a safe investment environment
Conclusion: The Future of Bali’s Investment Climate Depends on Getting This Right
Notaries hold the legal keys to Bali’s investment ecosystem. If notaries are consistent, updated, and ethical, Bali becomes one of the safest and most attractive destinations for long-term, sustainable investment. If notaries remain inconsistent, Bali risks:
- More disputes
- More illegal structures
- More investor losses
- More strain on communities
- More mistrust in the system
Bali deserves better — and with proper oversight, it is achievable. For the island to protect its culture, its land, its people, and its future, notarial reform is not optional. It is essential.