Bare Trust Deed Template for Indonesia

A Bare Trust Deed is a specialized legal document that allows you to separate legal ownership from beneficial ownership of assets while maintaining complete control as the beneficiary. In Indonesia's civil law system, this instrument provides a practical solution for asset management and protection while navigating the unique requirements of Indonesian property and contract law.

When do you need this document?

You'll need a Bare Trust Deed when you want to hold assets through a trustee for administrative convenience while retaining all beneficial rights. This is particularly useful in Indonesia for foreign investment structures where direct ownership may be restricted, family estate planning where you want to simplify asset transfer, or business arrangements requiring nominee holding of shares or property. The document is also essential when you need to separate legal liability from beneficial ownership for asset protection purposes, or when establishing holding structures for multiple properties or investments under Indonesian law.

Key legal considerations

The most critical aspect of a Bare Trust Deed is clearly defining the limited role of the trustee and the absolute rights of the beneficiary. The deed must specify that the trustee holds legal title only and has no discretionary powers over the trust property. You must ensure the document complies with Indonesian contract law under the Civil Code, particularly regarding valid formation of obligations and property transfer requirements. The deed should include comprehensive provisions about the trustee's duty to follow your instructions, restrictions on the trustee's ability to deal with the property independently, and clear termination procedures. Consider potential conflicts with Indonesian property ownership restrictions, especially for land and certain business sectors where foreign ownership is limited.

Legal requirements in Indonesia

Under Indonesian law, your Bare Trust Deed must comply with the Indonesian Civil Code provisions on contracts and obligations found in Book III. If the trust involves immovable property, you must also consider Law No. 5 of 1960 on Basic Agrarian Law, which governs land rights and may restrict certain ownership arrangements. For investment-related trusts, Law No. 25 of 2007 on Investment may apply, particularly regarding foreign ownership structures. The document typically requires notarization by an Indonesian Notary Public to ensure legal validity and enforceability. You must also ensure that any property transfers comply with local registration requirements and tax obligations under Indonesian law, including potential stamp duty and transfer taxes.