Foreign Exchange Control in Indonesia – the Overview
In Indonesia, the local currency is the rupiah. It cannot be traded freely outside Indonesia. This guide explores the foreign exchange control in Indonesia.
Trading the Rupiah Currency
In Indonesia, if you want to trade the currency, it can only be in amounts of 100 million or less. Only this amount can be taken in and out of the country physically with no restriction.
This restriction is set by the BI Regulation No. 18/19/PBI/2016. Commercial banks must abide by these restrictions when it comes to overseas transfers. Bank Indonesia (BI) controls these transfers. They are Indonesia’s central bank.
What Happens When the Transfer Amount Exceeds the Limit?
As part of the foreign exchange control in Indonesia, supporting documents must be given if transfers exceed the limit. Documents include:
- Identities of both the recipient and the sender
- Purpose of the transfer
- Supporting documents by the sender stating the reason for transfer
Per the BI Regulation No. 18/18/PBI/2016, information about the underlying transaction must meet the bank’s requirements. Legal entities, Indonesian nationals, and residents purchasing foreign currencies that are more than US$25,000 or it’s equivalent monthly must abide by this requirement.
The underlying transactions must be related to one of the following:
- Domestic trading of goods and services
- Overseas trading of good and services
- Direct investments
- Portfolio investments
- Capital investments
- Domestic investments
- Overseas investments
- Finance or credit extension by a bank. It must be in rupiah or a foreign currency