Prenuptial Agreement in Indonesia: Frequently Asked Questions
Updated: Dec 20, 2021
What is a Prenuptial Agreement?
A prenuptial or pre-marital agreement is a written contract made between the soon-to-be-husband and the soon-to-be wife which is legalized by the marriage registration officer. Indonesian law permits the couple to construct the agreement as they see fit, as long as the content shall not violate any law, religion, and morality.
The prenuptial or pre-marital agreement shall be signed before the marriage (or the wedding) takes place. However, in 2016, the Indonesian Constitutional Court decided that a postnuptial agreement is also permitted.
I am planning to get married. Do I need a prenuptial agreement?
It depends. A prenuptial agreement is advisable to have if you want to regulate matters regarding marriage and divorce differently than what the Indonesian law has already regulated. For instance, Indonesian law regulates that all assets acquired during the marriage becomes joint assets of husband and wife. Any transfer of joint assets requires a spousal consent. Thus, you need a prenuptial agreement if you want to have a separation of assets and flexibility to transfer your assets without the need to ask your spouse’s consent. The existence of a prenuptial agreement shall help the married couple and their children during the marriage and the divorce (if it occurs). The prenuptial agreement can discuss, among others, the rights and obligations between the married couple, the management of assets, the management of income, etc. Through having this prenuptial agreement, the married couple can manage their expectations towards each other, and their relationship, as well as their assets management.
Why do I need a prenuptial agreement?
There are many reasons a couple considering marriage might consider it advisable to have a prenuptial agreement, among others:
(a) one party is a foreigner and the other is an Indonesian. A foreigner cannot own land in Indonesia. A prenuptial agreement is necessary to enable the Indonesian spouse to own the land in Indonesia;
(b) one party (or both parties) may wish to provide some assets or living costs for children from a prior marriage;
(c) one party (or both parties) has a business;
(d) one party (or both parties) has been married and divorced therefore without prenuptial agreement; he/she will be reluctant to marry again;
(e) one party (or both parties) has a lot of assets;
(f) one party (or both parties) has an asset-risk-adverse or high-risk litigious job, such as: lawyer, doctor, consultant; and/or
(g) one party (or both parties) wants to own a land in Indonesia.
Are premarital agreements only for the rich?
Not at all. A prenuptial agreement is necessary for any married couple wishing to regulate, among others, their rights and obligations, the assets management, the income distribution during the marriage and after the marriage ends.
What happens if I don’t have a prenuptial agreement?
If you do not have a prenuptial agreement, you leave it up to Indonesian law to determine who owns the assets that both of you acquire during the marriage, the distribution of income, the rights and obligations of husband and wife, when the marriage ends.
What Indonesian law says regarding marital assets?
Under Indonesian law, any assets obtained during the marriage shall become joint assets of husband and wife. Consequently, any action towards the joint assets requires the spousal consent, such as: transfer or encumbrance of assets requires spousal consent. And, if divorce happens, the joint assets shall be divided in half.
What Indonesian law says regarding marital assets of a mixed marriage between an Indonesian and an expatriate?
Under Indonesian law, a foreigner/expatriate is not permitted to own a land in Indonesia. Without a prenuptial agreement regulating a separation of assets, the mixed marriage couple's (an Indonesian and a foreigner/expatriate) assets shall be regarded as joint assets (the assets shall be considered a foreigner’s assets as well) therefore neither of them is allowed to own a land in Indonesia.
Further, under Indonesian law, a foreigner is permitted do business in Indonesia by establishing a foreign investment company or PT penanaman modal asing (PT PMA) with many restrictions to do business in Indonesia, such as: restricted business activity, restricted foreign ownership in the company, minimum issued capital, etc. Without having a prenuptial agreement regulating a separation of assets, the mixed marriage couple's assets shall be regarded as their joint asset (the assets shall be considered a foreigner’s assets as well) therefore any Indonesian company owned by any of them shall be subject to foreign investment restrictions.
However, if the mixed marriage couple have a prenuptial agreement, the Indonesian citizen spouse shall be permitted to own a land in Indonesia, and to do business in Indonesia without need to be subject to foreign investment restriction.
Is there any other requirement for the prenuptial agreement to be valid?
Yes, a prenuptial agreement will be valid and applicable to husband, wife, and other party involved if the prenuptial agreement is registered to the relevant marriage registration office.
I am considering a prenuptial agreement. What should I do next?
The first step is to let your partner know that you would like to have a prenuptial agreement. Then you should gather your financial information (a list of assets and liabilities, amount, and sources of income) and plan what you would like to regulate in the prenuptial agreement. The next step is to meet with a lawyer to assist you during the drafting, negotiation, and registration process of a prenuptial agreement.
Advice for Family Law in Indonesia
This article was prepared and drafted by Yuliana Pertiwi Siagian, one of the partners at NP Consultant (www.np-consultant.com).
NP Consultant is an Indonesian law firm offering the highest quality standard of local law expertise. Our team consist of lawyers with excellent law academic background and international exposure working experience. Our lawyers have assisted many renowned international and local individuals and corporations.
The firm partners Yuliana and Gesiu are Indonesian lawyers assisting divorce and family law. Besides that, they also engage in wide range of legal practices, including corporate and commercial, merger and acquisition, mining, energy and natural resources, investment, immigration, due diligence and compliance, employment, dispute resolution and litigation, etc.
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