Can foreigners own land in Mentawai?
Direct  foreign ownership of land is not recognized however foreigners may lease certificated land in their own names (or in off-shore company names) for up to 90 years. Most land owners will not entertain leases longer than 30 years. The duration of the lease is reflected in the price.

Mentawai Sanctuary's registered Foreign Direct  Investment Corporation holds project land in two ways:

• Absolute land title in the company's own name for the maximum 30 year lease period currently permitted under Indonesian foreign investment law..... or
• 30 + 30  or 25 + 25 year leases over private perpetual land title held by a company appointed nominee.

Both forms of land ownership are common practice in Indonesia and both are considered equally secure.
Click to read an independent legal opinion

What is the ownership structure?
PT Mentawai Sanctuary (PMA)  is assigned leases for the real property (available for review on request)
PT Mentawai Sanctuary  appoints Mentawai Resort  Management Ltd to develop and manage the project
PT Mentawai Sanctuary  is owned and controlled by Mentawai Villa Holdings Ltd (BVI) 51% and Mentawai Resort Management Ltd PMA (49%)
Villa owners hold a share each in Mentawai Villa Holdings Ltd (BVI)
Click to see the full ownership structure

What are the applicable laws for this structure?
Although the lease of land is governed by Indonesian laws, all agreements signed by the purchaser are governed by the laws of British Virgin Islands. Any claims or disputes will be arbitrated according to International Trade Law in Singapore.

How do I sell my villas later?
You are free to sell your villa at whatever price you wish. The transaction is simply a sale of your share in the off-shore owners company and it is therefore highly tax efficient. MS management will assist owners wishing to sell by promoting the villa and arranging sale documentation for both seller and the new owner at cost.

What happens when the current 30 year lease expires?
All owners have an automatic option to extend their agreements with the management. The cost of the extension will be in line with an independent land valuation and the total cost will be shared between all owners wishing to extend at the time.

How do the new Mentawai Government Tourism Laws impact this investment?
Legislation passed buy the Mentawai Parliament in 2002 protects Marine Tour License holders in a number of ways:

• Buy capping the total number of Marine Tour Operators licenses at 5  and by limiting the number of boats to 6 per company, surfer numbers will be kept at a level that will ensure guest satisfaction and hence strong demand at reasonable tariff levels.
• MTOs may decide to reduce boat numbers after land based resorts open as land based resorts are inherently more cost effective than boats.
• The aspects of the legislation covering wave management will be be phased in as land based resorts are opened.
• As the market matures and more families book, the pressure on surf resources will drop regardless of the regulations.
• Even partial or gradual implementation of wave management will see substantially higher tariffs than used in our projections.

What licenses & wave management rights are held by Mentawai Sanctuary?
The MS Group comprises two MTOs with land holdings and management rights at the following locations:

• Macaroni Left                (voted the No.1 most enjoyable wave to ride  in the World)
• HTs Right                        (voted in the top ten most perfect waves in the World)
• Lances Left                   South Sipura
• E-Bay Left                       Nyang Nyang
• Pit-Stops Right             Nyang Nyang
• Scarecrows Left        Pitojat Island

How are Mentawai Sanctuary's locations and rights protected?
Both our MTO's have been granted a registered Surat Keputusan (Decree) detailing location and buffer zone coordinates by the Mentawai BUPATI  (Regency Head). These Decrees are backed by an act of parliament and they are protected by the full  power of both Criminal & Civil Law in Indonesia.

Are there working precedents for private wilderness management around the world?
Yes, the number is increasing every year  and they are generally working well.

• The Maldives Government has contracted with over 94 hotel owners and guaranteed them a "one  island, one hotel" right of use over dry land  and surrounding reef structures.
• Several Fiji resorts have contracts with local villages that compensate the village several dollars per day for exclusive use of surf resources. The Tahiti Government tightly controls surf charter boat operators.
•  Access to prime dive sites and top white water wilderness is now licensed in many parts of the world to avoid  exceeding the carrying capacity of the natural attraction that would otherwise draw an unmanageable crowd.
• Snow fields worldwide have been placed under private management to encourage investment in lift infrastructure.
  
• G-Land in East Java operates under a quota system to protect the licensed operators.

Is there academic support for the management of carrying capacity in wilderness areas?
The worlds leading authority on Eco & Adventure Tourism, Professor Ralf Buckley, has published two papers on the subject of wave management  as specifically applied to the Mentawai Islands. Click to view  Paper 1   Click to view  Paper 2  

General  Legal Structure  Investment Management