FAQ: The Expat Spouse Law

The Expat Spouse Law:

Is this a scam?


It’s possible.

Even if it is, it doesn’t necessarily mean your spouse is involved; lawyers and notaris will sometimes do this on their own.

There are good reasons for a Prenuptial Agreement, and we will discuss those. Good reasons for a prenup are the same in Indonesia as they are anywhere else in the world.

But first we will discuss the bad prenups, the ones prepared to deal specifically with the “Expat Spouse Law” by causing the expatriate spouse to surrender all rights to community assets of the marriage.

Throwing out the baby with the bath water...

The reasoning behind belief in the Expat Spouse Law is based entirely on questions of land ownership as community property in a marriage. EVEN IF the hypothesis behind the reasoning were true, there would be no need for the expatriate spouse to surrender all community property regardless of consisting of land, bank accounts, automobiles, etc.

And yet that is exactly what Article 3 of the Prenuptial Agreement at the bottom of this page does.


Narrow focus on the expat spouse law

With all the good reasons for writing a prenuptial agreement, there are also good reasons for not writing a prenup: two young people starting out in life, expecting to build together a family and a home, are poorly served by a prenup.

In fact the Indonesian laws on marriage (Regulations No 1 Year 1974 Regarding Marriage) clearly set the priorities all societies hope for:


The principles comprising the basis for these Regulations are as follows:

a) The purpose of marriage is to form a happy and stable family. For this, the husband and wife must support and complete one another so that each can reach their full personal potential to help and achieve both spiritual and material welfare.

b) In these Regulations it is stated that a marriage is legal if done according to the laws of the religions and beliefs of each; and that also each marriage must be listed according to the regulations pertaining to it. The listing of a marriage is the same significance as the listing of other important events in each person’s life, for example births and deaths which are stated in certificates as official statements which are also entered into civil records…

e) Because the purpose of marriage is to form a family which is happy, stable and provides for family welfare, therefore these Regulations are based upon the principle to make it difficult to achieve a divorce, there must be specific reason, and it must be done through a hearing in a court of law.

If you are going into a marriage to build a life and a family, and you do not have assets, businesses, children, or debts from a previous marriage to protect, the laws of Indonesia, like the laws of every country, are already set up to encourage happy and stable family life. An equal distribution of community property from the marriage is intended to encourage a stable relationship.

The problem comes when young people try to separate assets contrary to the purpose of the law.

When a young couple runs down to a lawyer or notaris with the urgent need to separate assets due to the expat spouse law—although those assets do not yet exist because the couple is just starting out in life—they may end up writing an agreement specifically disenfranchising the expatriate spouse from the assets of the marriage.

As already noted in the introduction to this site:

In any relationship, business or personal, the other party's knowledge that they can potentially strip you of everything you own, from your company to your children, acts to destabilize the relationship. Even good partnerships and marriages can go bad quickly when one side has no reason to compromise. It's human nature.

No matter how much you love one another, in every relationship there are stresses. The combination of a prenuptial agreement which destroys the rights of an expatriate spouse from the very beginning of the marriage, together with the blandishments of "well-wishers" from the Mafia Hukum, all in the context of the precarious and easily manipulated legal system in Indonesia, is a recipe for disaster.


Lawyers and Notaris

In another chapter on Lawyers we will go into this in more detail, but here let us note some problems specifically in connection with prenuptial agreements.

If you are an expatriate and just getting married, you are very likely relatively new to Indonesia. Maybe you are at the stage of "We are in love! Indonesia is wonderful. I love everyone and everyone loves me!"

And if so, all our counsel to the contrary will probably not get through to you, but...it's not really like that. Regardless of how your fiancé feels about you, not everyone loves you.

To some lawyers—certainly not all, but enough—an expatriate is an opportunity. In salesmanship it’s called “getting your foot in the door”, build a relationship, make the sale. It doesn’t matter what you sell, just get the contact, someday they will be back. If the lawyer says “you don’t need a prenup,” the potential customers will leave without a purchase. And knowing the wide-spread belief in the need for a prenup, the couple will probably keep looking for another lawyer.

The lawyer is happy to write up the agreement, but he is under no obligation to tell you that it is a terrible idea, or that he could have—but didn't—put in other clauses that might have helped protect you.

Selling an unnecessary prenup could be a very good idea. At sometime in the future, five years, fifteen years, it doesn't matter because the lawyer expects to still be around, your marriage may be in trouble. The lawyer has kept in touch through the years—he is a friendly guy.

So when things become difficult, your lawyer friend is right there to help the Indonesian spouse. He points out to the advantages written into the prenuptial agreement, reminding the spouse that in case of divorce, the Indonesian partner could keep everything.

He might be able to reassure the spouse that in the event of divorce, he has understandings with a good many other lawyers who may end up representing the expat spouse, and he has relationships with a number of judges. He can practically guarantee that the Indonesian spouse will walk away with everything.

This may start off as a glittering prospect to the Indonesian spouse, but over time the lawyer will likely cause as much damage to his own client as to the the opposition. See the case of disbarment of lawyer Ida Bagus Wikantara.

The advice to “talk to a good lawyer” about a prenuptial is good advice in most countries. But Indonesia is heavily controlled by the Mafia Hukum. Lawyers and Notaries are often an active part of it, so don't assume that your lawyer is really working for you. Taking the agreement to another lawyer for a second opinion before signing may land you in exactly the same situation you have with the first lawyer. The two lawyers might even contact one another and set up a deal for the second lawyer to represent you should there be a divorce.

The national lawyers association PERADI cannot always discipline their members for even the most basic ethics violations.

I know this sounds like an incredible scenario. But fact is, it happens a lot.


A real life case

This scam happens frequently, we won't try to list exhaustive examples. But here is a case just starting through the courts in January 2016. (All names and identifying details have been changed.)

Bill and Yanti

Bill is a British citizen working for a foreign oil consulting firm. Yanti was a secretary at the firm when she met Bill. They married in 2008, had two children now five and three years old, and bought a house and invested in a plot of land in Jakarta Selatan. Yanti left her secretarial position when the children were born and now stays home to care for them.

Bill was surprised in November 2015 when Yanti demanded a divorce. They had gone through some rocky times through the years, but no more than most couples, and Bill felt they were making a go of it.

Despite working for a foreign company, Bill had set himself up as an independent Indonesia-based contractor in a business owned formally by Yanti, and Yanti signed for his KITAS.

After telling Bill she wanted a divorce, she also told him that she would close his company and take all the assets, the children, home, and property, and she wanted him permanently out of Indonesia. She would no longer sign his KITAS, which expires in February 2016.

Bill hired a lawyer in December 2015 and asked him to handle the divorce. The lawyer assured Bill that he had nothing to worry about, he was entitled to 50% of the family assets, and the attorney would certainly obtain them for Bill.

But Bill became more uneasy after talking to friends. Especially worrying was a Prenuptial Agreement he had signed in 2008. His lawyer seemed unconcerned, but Bill became increasingly nervous at his lawyer's rather vague explanations, and so Bill sought other advice.


Here is the English translation:


The last paragraph notes that the Notaris read and explained the meaning of the agreement to Bill in English before he signed it.

Bill is intellegent and educated, so why would he sign such an outrageously unfair document which makes him responsible for all family expenses, yet in the event of divorce sends him home with nothing but the jewelry and the old clothing he had before the marriage? (Apparently jewelry or clothing or other possessions Bill acquired during marriage might now be the property of Yanti.)

Because, Bill says, he was in love. Of course he would never have signed in his home country, but he didn’t understand the law in Indonesia. He trusted his wife, the lawyer, the notaris, the Jakarta Post, and the host of other advisors who told him “it’s okay, all expatriates must sign a prenuptial before marriage, it’s the law, and if you don’t sign a prenuptial your wife can’t own property, you can’t buy house for your family, and the government might take all your assets.”

This is a tough problem. It would scare any lawyer I know, but Bill's lawyer remains unconcerned. Whether this is because the lawyer is supremely competent, or ignorant, or working for the other side, we will only know after the trial.

If you’ve signed an agreement like Bill’s, don’t throw away your old underwear, or else you might have to leave the country naked.

A really bad prenuptial agreement is not always hopeless, but it is a tough battle. See Notaris