Sale and Purchase of Barges in Indonesia: Due Diligence, Transfer of Registration, and Key Risks

🇮🇩 Read this article in Bahasa Indonesia →

Executive summary

Payment and physical delivery do not complete all legal steps in the sale and purchase of a registered barge. For a vessel of at least GT 7, the buyer must confirm that the intended owner is eligible to be recorded, examine the vessel’s legal status, obtain the release of any mortgage or seizure, execute the appropriate evidence of transfer, apply for transfer of registration through the Electronic Ship Registration System, and obtain the grosse of the deed of transfer of registration.

This article focuses on barges that are registered or required to be registered in the Indonesian Ship Register. Vessels below GT 7 and certain transaction structures require a different analysis.

Key points

1. The grosse of the deed of registration or the deed of transfer of registration is the primary evidence of ownership of a registered vessel. A tonnage certificate and the vessel’s nationality documents serve different functions and do not replace evidence of ownership.
2. A certificate of the vessel’s legal status should be obtained from the principal register to identify recorded mortgages, releases, seizures, court orders, and changes of status.
3. The registrar is not responsible for the substantive accuracy of the documents submitted. Administrative registration therefore does not replace the buyer’s due diligence.
4. A deed of transfer of registration cannot be issued while the principal register continues to show a mortgage, another security interest, or a seizure.
5. An application for transfer of registration must be submitted no later than three months after the transfer. Official service periods apply only after complete documents have been received and are not a guarantee of the overall transaction timeline.

1. Separate commercial closing from registration closing

In a transaction involving a registered vessel, the agreement on price, payment, and physical delivery must be distinguished from completion of the transfer in the ship register. A deed of sale and purchase executed before a notary serves as evidence of transfer for the registration application, while the Registrar and Recorder of Transfers of Ship Registration prepares the deed of transfer of registration and records it in the principal register.

The sale and purchase agreement and the delivery and acceptance record remain important, but neither replaces the registration process. Until that process is complete and the grosse of the deed of transfer of registration has been issued, the buyer remains exposed to risks involving proof of ownership, use of the vessel as security, third-party claims, and operational or financing obstacles.

2. Distinguish ownership, identity, nationality, and operational documents

A common error is to treat every vessel document as evidence of title. Their functions differ:

Note: the document list must be adjusted to the size, type, flag, classification status, activities, and history of the vessel under review.

3. Six due diligence gates before signing

1. Buyer eligibility. Confirm that the buyer is eligible to become the registered owner. A vessel of at least GT 7 may generally be registered in the name of an Indonesian citizen or an Indonesian legal entity that satisfies the applicable ownership requirements. For a joint venture company, also consider the PMA-specific gate in section 7.
2. Seller identity, authority, and approvals. Match the seller against the registered owner and review its corporate deeds and data, signing authority, articles of association, and internal approvals. If the vessel being transferred represents more than 50 percent of the company’s net assets, Article 102 of the Company Law may require approval from the General Meeting of Shareholders, subject to the exception for actions carried out in the ordinary course of business in accordance with the articles of association.
3. Chain of title and registration status. Review the original grosse deed, prior transfer deeds, tonnage certificate, physical vessel identifiers, and certificate of legal status. Repeat the status check as close as practicable to closing.
4. Mortgages, seizures, and priority claims. Verify recorded mortgages and releases in the ship register. The review should not stop at the mortgage record because the Shipping Law grants priority to certain claims, including crew wages, death or personal injury connected with operations, salvage, port and navigational charges, and specified damage claims. Obtain relevant evidence of payment, releases, or contractual protection.
5. Technical condition and operational fitness. Conduct surveys of the hull, structure, equipment, cargo capacity, classification, safety certificates, repair history, incidents, and insurance claims. For a non-propelled barge, tailor the review to the asset and its intended operation, including the tug that will be used.
6. Value, financing, taxes, and transaction costs. An independent valuation may be used where required by financing arrangements, internal policy, an affiliated transaction, or commercial considerations. Appointment of an Indonesian public appraiser must not be presented as a general requirement for every vessel transaction. Allocate taxes, non-tax state revenue, notarial fees, survey costs, mortgage release costs, and registration transfer costs from the outset.

4. Protections to include in the agreement and closing documents

The agreement should translate due diligence findings into enforceable closing conditions and risk allocation. At a minimum, consider:

1. Conditions precedent covering corporate approvals, delivery of original documents, an updated certificate of legal status, mortgage release and discharge, lifting of any seizure, and relevant financing or import approvals.
2. Seller representations and warranties concerning valid ownership, the absence of undisclosed encumbrances, disputes or vessel detention, document accuracy, crew liabilities, port charges, insurance claims, and other liabilities connected with the vessel’s operation.
3. A price retention or escrow mechanism if mortgage discharge, registration documents, or third-party confirmations cannot be delivered on the closing date.
4. Clear provisions on the timing of payment, transfer of possession, passing of risk, preservation of the vessel, insurance, taxes, costs, and cooperation until the grosse of the deed of transfer of registration is issued.
5. Indemnities, liability limitations, termination rights, and dispute resolution provisions calibrated to the identified risks rather than generic clauses disconnected from the due diligence findings.
6. An Indonesian-language version for an agreement involving an Indonesian party. Where a foreign party is involved, also prepare a version in that party’s national language and/or English in accordance with the rules on the use of the Indonesian language.

5. Transfer of registration: the three-month deadline and service periods

The new owner must submit an application for transfer of registration through the Electronic Ship Registration System to the Registrar and Recorder of Transfers of Ship Registration at the vessel’s place of registration no later than three months after the transfer. The application generally requires evidence of transfer, identification of the new owner, tax identification number, tonnage certificate, and the previous grosse of the deed of registration or transfer of registration.

A deed of transfer of registration may be prepared only if the principal register shows that the vessel is not encumbered by a mortgage or other security interest and is free from seizure. Once a complete application has been received, Minister of Transportation Regulation PM 39/2017 provides up to two working days for the completeness review and up to three working days for preparation of the deed where the requirements are satisfied. These are service periods for the specified stages, not an overall estimate beginning with negotiations, mortgage release, or correction of documents.

The final evidence that the buyer should secure is the grosse of the deed of transfer of registration. The transaction timetable should identify the responsible parties, powers of attorney, document list, filing deadline, and the seller’s continuing obligation to assist until completion.

6. Used foreign-flagged vessels: registration and importation are separate tracks

For a vessel previously registered in another country, Minister of Transportation Regulation PM 39/2017 requires a bill of sale legalized by the notary who witnessed the signing or by the competent government authority in the former flag state, together with a protocol of delivery and acceptance. A used foreign-flagged vessel also requires the original deletion certificate from the former flag state’s registry. The original deletion document is retained in the Indonesian ship register.

Registration in Indonesia is not the same as permission to bring the vessel into the customs territory. For the acquisition of a used vessel from abroad, the commodity classification, importer eligibility, Business Identification Number functioning as an Importer Identification Number, Import Approval, Surveyor Report, port of entry, age limit or exemption, and customs obligations must be verified under the rules in effect on the transaction date. As of 11 August 2026, the general import framework is contained in Minister of Trade Regulation No. 16 of 2025, most recently amended by Minister of Trade Regulation No. 18 of 2026, while used goods are addressed more specifically in Minister of Trade Regulation No. 24 of 2025.

7. A specific gate for a PMA buyer or operator

Establishing an Indonesian legal entity does not automatically resolve ownership and registration eligibility for a joint venture shipping company. Law No. 66 of 2024 introduced requirements for joint venture water transportation companies and joint venture legal entities carrying out special sea transportation in the industrial or mining sector. Within its scope, Article 158A requires the registration of an Indonesian-flagged vessel of at least GT 50,000 per vessel. This provision has applied since 28 October 2025.

Transitional provisions may protect certain companies that were already operating, but the exception does not apply if there is a specified amendment to the company’s deed or data, a change in the composition or structure of shareholders, and/or a purchase of a new vessel after the law came into force. A PMA company should therefore examine its shareholding structure, licence type, historical status, vessel size, and the transaction’s effect before signing a letter of intent or sale and purchase agreement.

8. Buyer’s closing checklist

1. Confirm that the buyer is eligible to become the registered owner and to operate the vessel for the intended business.
2. Match the seller against the registered owner and verify signing authority and corporate approvals.
3. Review the original grosse deed, tonnage certificate, measurement mark, nationality documents, and physical vessel identifiers.
4. Obtain an updated certificate of the vessel’s legal status and repeat the status check shortly before closing.
5. Complete the release and discharge of mortgages, seizures, and other security interests before applying for transfer of registration.
6. Review claims involving crew, salvage, ports, navigational channels, shipyards, damage, taxes, non-tax state revenue, and insurance.
7. Complete the technical survey and verify the relevant certificates and classification status.
8. Ensure that the agreement is in Indonesian, or bilingual where required, and that due diligence findings are reflected in the closing conditions and seller protections.
9. Prepare the notarial deed of sale and purchase, delivery and acceptance record, evidence of payment, powers of attorney, and the Electronic Ship Registration System document package.
10. Apply for transfer of registration no later than three months after the transfer and retain the grosse of the deed of transfer of registration as final evidence of completion.

Conclusion

A safe barge transaction is not measured by how quickly physical delivery occurs. It depends on whether the buyer is eligible to be recorded, obtains provable ownership, receives a vessel free from encumbrances and seizure, and has protection against claims that may not appear in the ship register.

Sequence is critical: determine buyer eligibility, verify ownership and legal status, resolve claims and encumbrances, incorporate protections into the agreement, close with a complete document package, and then complete the transfer of registration. If any of these steps is deferred until after full payment, the buyer’s bargaining position declines at the very point when risk is transferring to it.

Prasetyo Law Office

Prasetyo Law Office is a Jakarta-based law firm providing integrated legal services to clients across a range of areas, from commercial transactions to cross-sector litigation. With years of experience, we command not only the regulatory dimension but also an understanding of industry dynamics and the character of our clients’ businesses. We provide comprehensive legal advice and strategic solutions to help clients mitigate legal risk comprehensively in every business challenge.

For further information regarding this issue, please contact us:

Prasetyo Law Office

Indonesia Stock Exchange Building, Tower 1 Level 3 Suite 304,

Sudirman Central Business District (SCBD),

Jl. Jenderal Sudirman Kav. 52-53, South Jakarta,

DKI Jakarta 12190

Phone: +6221 5890 5002 (ext. 105)

E-mail: info@prasetyolawoffice.com

Principal sources

Indonesian Civil Code; Law No. 17 of 2008 on Shipping, as amended several times and most recently by Law No. 66 of 2024, particularly Articles 60 to 66, Articles 155 to 158A, and Article 346A; Government Regulation No. 51 of 2002 on Shipping, as amended by Government Regulation No. 31 of 2021; Minister of Transportation Regulation PM 39 of 2017 on Ship Registration and Nationality, particularly Articles 5, 7 to 11, 18 to 22, and 46; Law No. 40 of 2007 on Limited Liability Companies, as amended, particularly Article 102; Law No. 24 of 2009 and Presidential Regulation No. 63 of 2019 concerning the use of the Indonesian language; Minister of Trade Regulation No. 16 of 2025 on Import Policy and Regulation, as amended by Minister of Trade Regulation No. 37 of 2025 and Minister of Trade Regulation No. 18 of 2026; and Minister of Trade Regulation No. 24 of 2025 on the Import Policy and Regulation for Used Goods and Non-Hazardous and Non-Toxic Waste.

Disclaimer

This publication is provided for general information and educational purposes based on the regulations and materials available as of 11 August 2026. It does not constitute legal advice or a formal legal opinion and should not be relied upon as the sole basis for any particular report, licence, transaction, or dispute. Indonesian regulations, government electronic systems, and administrative practice may change. Advice tailored to the specific facts, together with verification of the current requirements, should be obtained before taking any action. Receipt or use of this publication does not create an advocate-client relationship.