Understanding Appraisal Office and Public Appraiser Requirements in Indonesia

In Indonesia, becoming a licensed public appraiser and establishing a Public Appraisal Service Office (Kantor Jasa Penilai Publik/ “KJPP”) involves a structured process governed by specific regulations. This article outlines the classifications of valuation, the process of becoming a registered and licensed appraiser, and the requirements for setting up a KJPP.

Valuation Classifications
Valuation activities in Indonesia are divided into four main classifications:

1. Simple Property Valuation
a. Residential vacant land (max. 5,000 m²) for a single house.
b. One unit of apartment, house, shophouse (ruko), office house (rukan), or kiosk.
c. Building fixtures attached to residential or commercial units.
d. One standalone machine (e.g., genset, water pump) used in a house or shop.
e. One transportation unit not used in a fleet (e.g., car, motorcycle).
f. A warehouse unit (max. 500 m² for land and building).

2. Property Valuation
a. Land, buildings, and associated developments.
b. Integrated or independent machinery and equipment.
c. Transportation, heavy equipment, medical and lab tools, utilities, military gear.
d. Telecommunication systems, including satellites.
e. Agricultural and natural resources: farms, plantations, fisheries, forestry.
f. Mining properties.

3. Business Valuation
a. Companies, investments, securities, and derivatives.
b. Corporate rights and obligations.
c. Intangible assets and economic loss analysis.
d. Fairness opinions and financial instruments.

4. Personal Property Valuation
a. Factories and installations.
b. Machinery used in production.
c. Various professional equipment and devices.
d. Telecommunication infrastructure.

Requirements to Obtain a Public Appraiser License
To become a licensed public appraiser, a registered appraiser must submit a written application to the Ministry of Finance along with the following requirements:

1. Indonesian residency, proven by a valid ID (KTP).
2. Minimum education: Bachelor’s degree or equivalent.
3. Certification exam: Pass the exam based on the desired classification.
4. Continuing professional education (CPE) if more than 2 years have passed since certification:
a) 20 credit points for simple or personal property.
b) 40 credit points for property or business appraisal.
5. Ethics training from the Appraiser Professional Association.
6. Membership in the Appraiser Professional Association.
7. Work experience in relevant appraisal classification:
a) Simple/personal property: 2 years and 600 working hours.
b) Business: 3 years, 1,000 hours (200 hours as supervisor).
c) Property: 3 years, 1,000 hours (including time in commercial property, plantations, and factories).
8. Taxpayer ID number (NPWP).
9. Clean record: No history of license revocation.
10. Application form: As per Ministry of Finance Regulation No. 56/2017, Appendix II.

Becoming a Registered Appraiser
To be a registered appraiser, individuals must complete initial education and demonstrate competency, including:
a. Initial appraisal education from an accredited body (non-formal, formal university programs, or government training).
b. Certification exam.
c. Ongoing professional education.

Additionally, appraisers must:

a. Complete ethics training aligned with the Indonesian Appraiser Code of Ethics.
b. Submit registration documents:
i. Education certificate.
ii. Professional association membership.
iii. KTP copy.
iv. Two 4x6 cm red background photos.

Public Appraiser License Processing
 Timeline: License issued within 20 working days of receiving a complete application.
 Incomplete submissions: Applicants are notified within 10 working days and must fulfill missing requirements within 3 months or reapply.

Establishing a KJPP
A KJPP is a licensed business entity authorized to provide public appraisal services. It may take the form of:
1. Sole proprietorship – led by a single public appraiser.
2. Civil partnership or firm – formed by at least two public appraisers, with one serving as managing partner.

Business License Requirements
The application must be submitted to the Ministry of Finance and include:
1. The leader must be a licensed public appraiser.
2. Their domicile must match the KJPP’s location.
3. The office must have at least three (3) permanent employees:
a) One with a bachelor's degree.
b) Two with at least a diploma (D3), with at least two being registered appraisers.

4. NPWP for the office.
5. Valid association membership for all partners.
6. Proof of domicile, office lease/ownership, and layout plan.
7. A technology-based database system, detailing:
a) Data types and sources.
b) Acquisition dates.
c) Pricing.
8. A quality control document based on professional standards.
9. For partnerships:
a) Notarized partnership agreement covering formation details, rights, duties, dispute resolution, resignation, and dissolution.
10. Completed application form (Appendix V, Ministry of Finance Regulation No. 56/2017).
11. The KJPP must be located in a registered eligible area for KJPP establishment.

Naming Guidelines for KJPP
1. Sole proprietorship: must use the appraiser’s full name.
2. Partnership/firm: may include names of one or more partners; if not all, use “and Partners.”
3. Abbreviations are not allowed.