Foreign Ownership of Boats in Indonesia: Cabotage, PT PMA & the Structures That Hold

Information, not advice: Phinisi Owner is an independent editorial guide — not a shipyard, broker, surveyor, or licensed adviser. Costs and regulations change and every vessel differs; verify figures with yards, independent surveyors, and licensed Indonesian counsel before committing money. If you engage a partner we introduce, that partner may pay us a referral fee at no cost to you.

Foreign ownership of boats in Indonesia is not simply prohibited — it is carefully constrained. A foreigner cannot directly own and commercially operate a vessel under Indonesian flag; the law reserves domestic commercial carriage for Indonesian-flagged ships owned by Indonesian shipping companies. What foreigners can do is finance, participate in, or structure around that constraint through several recognised arrangements — each with real limits, real risks, and in at least one case, explicit illegality. This page maps the legal framework as it stands after Law 66/2024, the third amendment to the Shipping Law, which came into force in late 2024 and tightened the rules further.

What the Cabotage Principle Actually Says

The phrase “asas cabotage” appears in Article 8 of Law No. 17 of 2008 on Shipping. The rule is direct: domestic transportation of passengers and goods by sea may only be carried out by Indonesian-flagged vessels owned by Indonesian national shipping companies. That covers every phinisi operating commercial charters in Komodo National Park, every liveaboard running trips out of Labuan Bajo, and every private-hire yacht doing day trips from Bali.

Indonesian flag, in turn, requires majority-Indonesian ownership. A vessel of 7 GT or above may only be registered under the Indonesian flag if it is owned by an Indonesian citizen, a fully Indonesian legal entity, or a foreign-investment company (PT PMA) in which Indonesian nationals hold the majority stake. The relevant sector — sea transport — carries a foreign equity cap of 49 percent under the Positive Investment List (Perpres 10/2021 and its amendment Perpres 49/2021).

Law 66/2024 did not soften this. It strengthened it. The post-October 2025 rules for new PMA entities entering sea-transport licensing include a vessel-size floor that makes the classic small-phinisi route effectively dead for newcomers: the minimum vessel size for a new PMA to obtain a SIUPAL (sea-transport business licence) or SIOPSUS has been raised from 5,000 GT to 50,000 GT. A 30-metre phinisi typically measures somewhere between 75 and 200 GT. That gap is not a technicality — it is a structural barrier. Say it plainly: if you are a foreign investor looking to establish a new PMA shipping company to operate a single phinisi after October 2025, that route is closed. Existing PMAs formed before that threshold are grandfathered, which is why you will still encounter functioning structures from operators who set up years ago.

The Tourism-Transport Route: KBLI 50113

Most commercial phinisi charters do not use pure sea-transport licensing at all. The practical majority operate under KBLI 50113 — Angkutan Laut Wisata, or sea tourism transport — which is a distinct classification sitting at the intersection of transport and tourism. This is a sea-transport sub-category and therefore still subject to the 49 percent foreign-equity cap. It is not a workaround to that cap; it is a route within the same cap structure.

The separate KBLI codes in the 79xxx tour-operator range — which cover the sales and packaging side of tourism — have been liberalised to allow up to 100 percent foreign ownership. But a foreign-owned tour-operator PT cannot itself operate the vessel. The entity that holds the KBLI 50113 licence and owns the hull must be majority-Indonesian. Many charter operations use a two-entity structure: a liberalised tour-operator PT for marketing, booking, and foreign-market sales, sitting above a majority-Indonesian PT that legally owns and operates the vessel. This structure has commercial logic. It also has layers of complexity — separate audits, separate bank accounts, transfer-pricing implications — that require experienced Indonesian legal and accounting support to maintain cleanly.

One other common data point: BKPM practice (widely cited, though it is not a statutory provision) requires a minimum investment of IDR 10 billion per KBLI registration for a PT PMA. Verify the current threshold with BKPM or OSS before relying on it, as practice evolves.

What Foreigners Can and Cannot Actually Do

Hold up to 49% equity in a PT PMA operating under KBLI 50113

Legal, but the majority-Indonesian partner controls operational decisions and the vessel registration. Shareholder agreements define protections; none are automatic. Engage counsel before signing.

Act as a financier or creditor to an Indonesian PT that owns the vessel

Common in practice. The foreigner provides capital via a shareholder loan or commercial loan agreement; the Indonesian company owns the hull and holds the licences. The foreigner is a creditor, not an owner. Enforcement of creditor rights through Indonesian courts — particularly in asset-heavy disputes involving vessel registration — is not guaranteed to be fast or frictionless. This structure carries real enforcement risk that no contract language can fully eliminate.

Enter a profit-sharing joint venture

Similar to the creditor model but structured as a revenue or profit split. Again, the Indonesian entity holds the operational rights; the foreigner participates in returns. The quality of the underlying contract and the trustworthiness of the Indonesian partner are load-bearing variables.

Hold a nominee arrangement where an Indonesian national holds majority shares on the foreigner’s behalf

Illegal. Article 33 of Investment Law No. 25 of 2007 expressly prohibits these arrangements. Agreements of this kind are void. Regulatory scrutiny of nominee structures has increased noticeably since 2022. The risk is not theoretical: licence revocation, asset confiscation, and criminal exposure for both parties are the documented consequences. If anyone in the Indonesian maritime or legal market offers to arrange this for you, that is the moment to find a different adviser.

Operate commercial charter under a foreign flag

Illegal for domestic carriage. The CAIT (Clearance Approval for Indonesian Territory) system that used to govern foreign private yachts has been replaced with an online declaration and e-clearance process — but that applies to private recreational cruising only. Foreign-flagged vessels conducting commercial charter of Indonesian domestic waters are in violation of the cabotage principle. Detentions of foreign-flagged yachts suspected of illegal charter operations have been reported in the Raja Ampat and Komodo areas, with enforcement described as real but sporadic. The legal exposure is the same whether or not a particular boat has been stopped.

The Bareboat Question

A question that comes up often: can a foreign investor own the hull through a foreign entity and bareboat-charter it to an Indonesian PT that then operates it commercially? Articles 160 and 167 of Law 17/2008 effectively prohibit Indonesian-flagged vessels from being bareboat-chartered out. The practical effect is that “foreign entity owns, Indonesian entity operates via bareboat” does not work cleanly under Indonesian law. What survives in practice — and what maritime lawyers often structure — is a time-charter or operational management agreement where the Indonesian entity that owns the vessel contracts with an operator. The foreign party’s investment is accessed through equity or debt in that Indonesian entity, not through flag-bearer separation.

This distinction matters commercially. If you are modelling investment returns based on a bareboat structure, the model needs revision before it reflects the actual legal structure you will be able to implement.

Registration and Certification: What the Stack Looks Like

Even once the ownership structure is resolved, the Indonesian vessel registration and certification process is substantial. Understanding it matters for due diligence on existing vessels and for planning new builds.

Grosse Akta Kapal

The grosse akta is the ownership title deed issued by the Directorate General of Sea Transportation (Ditjen Hubla). It functions like a land title. Lien searches and title chain verification on the grosse akta are mandatory before any purchase of a used vessel — undischarged maritime liens, informal family transfers never properly re-registered, and stale ownership chains are recurring problems in the Indonesian used-boat market. A maritime lawyer must conduct this search; it cannot be self-performed.

Surat Ukur (Tonnage Certificate)

Gross tonnage measurement determines which regulatory obligations apply. Vessels measured at different GT thresholds face different crewing, safety, and inspection requirements. This document also determines how the 5,000 GT and 50,000 GT thresholds in Law 66/2024 apply to a specific vessel.

SIUPAL / SIOPSUS

These are the company-level sea-transport operating licences, held by the PT — not the vessel. SIUPAL covers regular commercial sea transport. SIOPSUS covers specific-purpose sea transport. Tourism vessels frequently route through SIOPSUS under the KBLI 50113 designation. Neither licence transfers with a vessel sale; a purchaser’s PT must apply separately.

BKI Classification

Biro Klasifikasi Indonesia (BKI) is Indonesia’s national classification society. For commercial passenger vessels, BKI class is typically required by insurers and is increasingly expected in Syahbandar (harbourmaster) inspections. Wooden vessels require continuous-survey attention; BKI surveyors assess hull integrity, machinery, and stability. BKI classification is not automatic — it must be applied for, surveyed, and maintained through annual and special surveys. Vessels without class history face real insuring and regulatory difficulty.

Safety Certificates and Manning

Passenger vessel safety certificates (issued annually), load-line certificates, radio licences, and pollution-prevention certificates must all be current for commercial operation. Crew licencing requirements mandate Indonesian nationals on board; officer certificates (ANT I–V for deck, ATT I–V for engineering) and Basic Safety Training (BST) for all crew are mandatory. Foreign cruise directors and dive staff occupy a regulatory grey area — they are not typically classified as ship’s crew, but the legality of their presence and the correct visa category for their role should be confirmed with a local immigration lawyer before deployment.

TDUP — Tourism Operational Permit

Beyond the vessel registration stack, a tourist vessel also needs a TDUP (Tanda Daftar Usaha Pariwisata — Tourism Business Registration Certificate) at the local government level. For Komodo-area operations, this involves Labuan Bajo/West Manggarai regency. For Raja Ampat, West Papua provincial tourism. These permits are separate from Ditjen Hubla registration and from the Komodo National Park operating permits that gate vessel access to park waters.

A Comparison of Structures

What Law 66/2024 Changes for New Investors

The headline change is the GT floor. But Law 66/2024 also introduced new shareholding-structure requirements for PMA entities in sea transport and updated the compliance framework for existing licences. For investors already in an operational structure, the short-term impact may be minimal — grandfathering protects existing PMA licences. For anyone starting from scratch after October 2025, the practical message is that the KBLI 50113 PMA route requires either a pre-existing licensed entity or a very different approach to structuring foreign participation.

This is not unique to phinisi. The same constraint applies to any foreign investor looking to enter Indonesian domestic sea transport at small-vessel scale. The law is not aimed at phinisi specifically; it applies across the sector. The effect on this particular market is that established Indonesian operators — and the few legacy PMAs already licensed — hold a structural advantage over new foreign entrants that the regulatory framework now protects explicitly.

One practical implication: if you are evaluating the purchase of an existing phinisi as a going concern — vessel, company, licences, and charter book — and the vendor is an established PMA, the value of the existing licence structure is real and should be reflected in the purchase price. A bare-hull deal that requires you to re-establish the licence stack from scratch is a different proposition entirely after October 2025.

Due Diligence Checklist Before Any Structure Is Signed

Whatever structure is ultimately agreed, the following items are non-negotiable in due diligence. The list is not exhaustive; it is the minimum that a maritime lawyer in Indonesia would expect to see addressed.

• Grosse akta search: verify current registered owner, confirm no undischarged maritime liens, check full title chain back to original registration.
• SIUPAL/SIOPSUS validity: confirm the operating licence is current, in the name of the correct entity, and covers the relevant KBLI code.
• BKI class certificate: check currency, outstanding conditions, and the survey history for a used vessel. Absent or lapsed class is a major red flag for insurability.
• Safety certificates: all annual certificates (passenger safety, load line, radio, MARPOL) must be current and held in original form — not photocopies.
• PT shareholder structure: obtain and independently verify the current shareholder register from the Ministry of Law and Human Rights (AHU). Do not rely on the vendor’s representation alone.
• Outstanding crew wages and social security (BPJS) contributions: crew wage arrears and BPJS liabilities travel with the vessel’s operating history even if the company changes hands; confirm they are cleared.
• Tax compliance: request the PT’s most recent tax return filings and NPWP clearance certificate.
• Park operating permits: for Komodo NP operations specifically, confirm the vessel’s operating permit with Balai Taman Nasional Komodo directly — these are periodically renewed and not always in the main due-diligence document pack.

Apakah WNA Boleh Punya Kapal di Indonesia?

Pertanyaan ini sering muncul dalam versi Bahasa Indonesia, dan jawabannya lebih bernuansa daripada sekadar ya atau tidak. Secara hukum, Warga Negara Asing (WNA) tidak dapat secara langsung memiliki kapal berbendera Indonesia yang beroperasi secara komersial. Namun WNA dapat berpartisipasi melalui PT PMA dengan kepemilikan saham maksimal 49 persen untuk KBLI 50113 (angkutan laut wisata), atau melalui mekanisme pinjaman dan bagi hasil kepada PT Indonesia yang memegang hak atas kapal dan lisensi operasionalnya.

Yang jelas tidak diperbolehkan: pengaturan nominee di mana WNA sebenarnya mengendalikan aset melalui pemilik nominal Indonesia. Pasal 33 Undang-Undang Penanaman Modal No. 25 Tahun 2007 secara tegas melarang hal ini, dan perjanjian semacam itu dinyatakan batal demi hukum. Risiko pencabutan izin dan eksposur pidana bagi kedua belah pihak adalah konsekuensi nyata, bukan sekadar ancaman teoritis.

Panduan ini bersifat informatif, bukan nasihat hukum. Libatkan konsultan hukum maritim Indonesia yang berpengalaman sebelum mengambil keputusan struktural apa pun.

Finding the Best Ownership Structure for a Phinisi

No single structure is universally “best” — that framing is the wrong starting point. The right structure depends on how much operational control you need, how much you trust and are able to vet your Indonesian partner, how long your investment horizon is, and what exit mechanism you expect to use. A minority shareholder in a PT PMA with good governance documents is in a different position from a creditor with a well-drafted loan agreement; both are legally distinct from the illegality of a nominee arrangement.

What the market consistently underestimates is the quality of the underlying Indonesian legal work. A shareholder agreement drafted with actual maritime and investment law expertise, that addresses genuine dispute scenarios, key-person risk, and exit rights, is worth far more than one assembled from templates. The same is true for a loan-to-own or profit-share contract. The legal framework does not prevent foreign participation — it shapes it. Working within that shape competently is what distinguishes foreign investors who have successful long-term Indonesian vessel operations from those who discover problems at the worst possible time.

Engage Indonesian maritime counsel. Not as a formality — as a substantive step before any money moves.

Frequently Asked Questions

Can a foreigner own a boat in Indonesia for personal use, not charter?

A foreign private yacht may cruise Indonesian waters under the e-clearance and vessel declaration system (which replaced the old CAIT framework). This covers recreational cruising only — the vessel must be foreign-flagged and must not conduct any commercial carriage. Long-stay or based-in-Indonesia arrangements are more complex; the vessel cannot be permanently stationed in Indonesian waters as a foreign-flagged vessel without periodic departure and re-entry, and local port dues and clearance fees apply. For commercial use of any kind, the cabotage rules apply regardless of the owner’s nationality.

What happens if a foreign-flagged yacht charges guests for a charter trip in Komodo?

This is a cabotage violation. The vessel is conducting domestic commercial carriage without being Indonesian-flagged and without the required operating licences. Foreign-flagged yachts suspected of illegal charter have been detained in Raja Ampat and Komodo-area waters, with reports of enforcement actions spanning from 2018 through 2024. Enforcement has been described as sporadic rather than systematic, but the legal exposure is the same regardless of whether a particular vessel has been stopped. The correct structure for a foreign-linked charter operation in Indonesian waters is a majority-Indonesian PT with proper KBLI 50113 licensing, not a foreign-flag work-around.

Does Law 66/2024 affect existing PT PMA shipping companies?

Existing PMA sea-transport companies licensed before the October 2025 commencement of the new requirements are grandfathered. Their existing SIUPAL or SIOPSUS licences continue under the old framework. The 50,000 GT minimum vessel size applies to new PMA shipping company registrations — it does not retroactively invalidate existing licences. This creates a material distinction in value between buying into an established, licensed operating company versus starting a new one from scratch after October 2025.

Is a nominee arrangement ever acceptable if both parties agree and sign a contract?

No. Article 33 of Investment Law No. 25 of 2007 voids these agreements. Both parties signing does not make the arrangement legal — it makes both parties party to an illegal agreement. The foreign investor has no enforceable ownership rights, and the Indonesian nominee can walk away with the asset. Licence revocation and, in serious cases, criminal liability are documented consequences. This is not a grey area of Indonesian law; it is a clear prohibition that the government has signalled increasing willingness to enforce.

What is a grosse akta and why does it matter for buying a phinisi?

The grosse akta kapal is the official vessel ownership title deed issued by Ditjen Hubla (the Directorate General of Sea Transportation). It is the Indonesian equivalent of a land title certificate for a vessel. Before any purchase of a used phinisi, a maritime lawyer must conduct a grosse akta search to verify the current registered owner, confirm that no maritime liens are outstanding, and trace the title chain back to the original registration. Undischarged liens, informal transfers that were never formally re-registered, and ownership chains with disputed family successions are recurring problems in the Indonesian used-vessel market. Buying without this search is buying without title certainty.