Indonesian corporate bank accounts in 2023
Since 2003, Healy Consultants Group PLC helps multi-national Clients open multi-currency corporate bank accounts in Indonesia, both for local and overseas companies.
Without bank signatory travel, our Asian team will project manage the multi-currency corporate bank account opening process, including supervising the injection of statutory paid-up share capital required before Indonesia company registration.
Because of Indonesian capital controls, outgoing funds transfers have some restrictions, even when the corporate bank account is held by a company registered outside of Indonesia. It is wise our multi-national Clients read this web page to avoid bank surprises later!
Table of Indonesian banking problems and solutions
No. Indonesian banking problems Solutions 1.
Because Indonesia is an emerging market, the banking sector is less sophisticated than developed economies like Singapore or Hong Kong. Consequently, customer service is of poor quality.
Many international banks have branches in Indonesia. For example, HSBC and Standard Chartered Bank. Healy Consultants Group PLC only targets international top tier banks. To receive the best internet banking and customer service, Healy Consultants Group PLC recommends banking with DBS, HSBC, Standard Chartered and Citibank.
Incoming or outgoing funds transfers over US$100,000 can raise red flags within bank Legal and Compliance Departments.
Before the funds transfer happens, supply your dedicated bank officer with supporting documents that accurately and completely explain the transaction.
While some international banks offer multicurrency accounts, they often require Clients to open an Indonesian rupiah account before opening accounts in other currencies.
Payments to and from Indonesian beneficiaries to be done in the local currency. For example, local Suppliers to be paid in rupiah.
Open a rupiah corporate bank account together with a US$, € and £ corporate bank account, along with e-banking and local Visa debit cards.
Clients who prefer not to open a rupiah account can choose to open separate foreign currency accounts, if required.
Because the risk of money laundering in Indonesia is high, multi-national Clients should expect monthly reviews of a sample of corporate bank account transactions.
The bank will request an original Statement Letter for every transaction from the rupiah account to accounts in another currency. On a monthly basis, if the total value of transfers exceeds US$25,000, the bank will request i) original Statement Letter and ii) supporting documents (e g invoice etc) for every upcoming transaction.
Cultivate a positive, open and transparent business relationship with your dedicated bank officer. Timely, accurately and completely email the bank officer all documents the bank requests.
The Indonesian banking sector
Healy Consultants Group PLC’s summary view
- We believe the Indonesian banking system is fragile, exposing multi-national Clients’ funds to country risk.
- The Indonesian economy will be hit hard from an uncontrollable outbreak of COVID-19. Local businesses will go bankrupt, loan defaults will cause local banks to go bankrupt, and unemployment will reach 340%. Bank and country ratings are likely to fall.
- Consequently, there will be a large liquidation of the US$300 billion in Indonesian financial securities owned by non-resident investors.
- The Indonesian rupiah will fall by approximately 40%, doubling the current national debt of US$400 billion. Unfortunately, Indonesia only has a US$131 billion foreign currency stockpile.
- Indonesian bank accounts are insured up to Rp2 billion (US$136,380) per individual per bank. For example, on a long-term deposit of Rp2 billion, any interest accrued is not insured. If this is a concern, you should withdraw all amounts beyond Rp2 billion as soon as possible, even if funds are in different accounts.
- Indonesia’s sovereign credit cedit rating in April 2020 is i) BBB (Standard and Poor’s and Fitch) ii) Baa2 (Moody’s) and iii) BBB+ (Japan Credit Rating Agency.
- Healy Consultants Group PLC recommends our multi-national Clients’ minimize the funds held with Indonesian banks.
Key information on the Indonesian banking sector
- There are some currency controls in Indonesia but they only apply to i) foreign currency transactions made by locally-registered businesses and ii) transactions involving Indonesian rupiah.
- To serve the world’s fourth largest population, the country houses i) 120 commercial banks ii) four state-owned banks with 17,575 branches iii) eight foreign-owned banks with 36 branches iv) 26 regional development banks with 4,406 branches v) 35 forex institutions vi) 1,600 rural banks and vii) 14 Islamic banks.
- The largest four Indonesian banks are state-owned and hold over 45% of state funds. These banks are i) Bank Mandiri ii) Bank Rakyat Indonesia and iii) Bank Negara Indonesia and iv) BTPN.
- Healy Consultants Group PLC prefers to open multi-currency corporate bank accounts with branches of international banks including i) Citibank (5 branches in Jakarta) ii) Standard Chartered Bank (5 branches in Jakarta) iii) HSBC (33 branches in Jakarta) and iv) DBS Indonesia (3 branches in Jakarta).
- In July 2020, ratings agency Fitch described corporate governance in Indonesian financial institutions as a risk for creditors and investors. Governance-related defaults have resulted in US$3.5 billion investor losses since 2018.
- Indonesian banks offer same services commonly offered elsewhere in the world. These include savings, deposits and checking accounts, online banking, currency exchange, foreign currency banking, wire transfers, ATM services, wealth management etc.
- Indonesia is still largely a cash-based society. Most transactions beyond those in international hotels, malls and restaurants are in cash. Having access to local banking card and ATM machine saves exchange fees and the hassles of carrying large amounts of cash.
- The largest Indonesian currency denomination is Rp100,000 (approximately US$7. Consequently, many cash transactions require ridiculous amounts of paper currency. You can largely avoid this by using online banking and ATM transfers.
- Many ATMs in Indonesia do not accept international bank cards.
- In many Indonesia bank branches (especially outside Jakarta and Bali), staff speak little or no English.
- Paying various utility bills is much easier via online banking.
- A large number of vendors, including airlines, government offices, the state rail company, cell phone providers, cable TV providers and utility companies etc. accept payments via bank transfer.
- Retail banks offer better currency exchange rates than money changers, and if you open a foreign currency account along with your rupiah account you can easily transfer between the two accounts.
- In 2020, Indonesian banks pay 4.3% interest on rupiah fixed deposits and 1.3% interest on rupiah fixed deposits.
- Indonesian banks are regulated by i) Bank Indonesia and ii) the Ministry of Finance and iii) the Financial Services Authority.
- In 2019 the Commodity Futures Trading Regulatory Agency introduced new regulations recognising crypto-currency as an tradeable asset in Indonesia. Crypto-currencies have large upside potential in a country where the rupiah value is in decline.
- Indonesia is a signatory to the Common Reporting Standard (CRS), a global initiative to clamp down on tax evasion. As a result, Indonesian banks share information on bank accounts and account holders with the tax authorities where the company/individual is tax-resident.
- Similarly, under the Foreign Account Tax Compliance Act (FATCA), since 2014 Indonesia banks report information on US account holders to the US Inland Revenue Service (IRS).
- The Indonesian Export Financing Agency (Indonesia Ex-Im Bank) supports Indonesian exporters, and helps improve their global competitiveness.
Foreign exchange obligations in Indonesia
Bank Indonesia regulation Legal obligation for businesses Monitoring of Foreign Exchange Traffic for Banks and Customers
- All companies are obliged to report to Bank Indonesia (BI) any outgoing foreign currency transfer exceeding US$100,000.
- All such transfers must also be supported with supplementary documents.
Reports of Foreign Exchange Activities
- All businesses dealing in risk participation transactions must disclose this information as a part of their foreign exchange activities report.
- Companies with new offshore loan plans must submit the required information to BI, latest by the 15th of the following month.
IDR transfer restriction and foreign currency credit
Businesses can not repatriate profits from Indonesia in IDR.
Indonesian banks impose internal (i e non-government mandated) foreign exchange limits (for example US$25,000) when sending funds out of Indonesia. When their internal threshold is exceeded, the bank may request additional KYC documentation to complete the transfer. All banks in Indonesia have indicative, formal or informal thresholds for their KYC checks on outgoing and incoming transfers.
It is important that our Clients are aware of their corporate and legal obligations in Indonesia and that they timely fulfil the same. Let us know if you require Healy Consultants Group PLC’s assistance to timely and efficiently complete your legal and corporate responsibilities.
Healy Consultants Group PLC fees to help open a corporate bank account in Indonesia
- For a fee of US$5,950 and without bank signatory travel, our Asia Staff will secure multi-currency corporate bank account approval for an overseas LLC. For example, a USA LLC and Indonesian multi-currency corporate bank account with Citibank. Or a Singapore LLC and DBS Indonesia multi-currency corporate bank account.
- For a fee of US$4,950 and without bank signatory travel, our Asia Staff will secure multi-currency corporate bank account approval for an Indonesian LLC.
- Our multi-currency corporate bank account opening fees cover the following support services:
- Creating a quality business plan for the Indonesian banks, explaining the purpose of the business and future banking transactions.
- Securing welcome emails from multiple Indonesian banks, inviting our Client to submit a multi-currency corporate bank account application.
- Healy Consultants Group PLC’s Banking Team completing, on our Client’s behalf, the multi-currency corporate bank account application forms and collating Know Your Customer (KYC) due diligence documents.
- Over the following weeks, the bank officer reverting to Healy Consultants Group PLC multiple times to prepare an accurate, complete multi-currency corporate bank account opening file. When the Indonesian bank officer is ready, our Client will convene a Skype video call with the bank.
- Following successful completion of the above, the bank officer submits a complete potential customer file to the bank Legal and Compliance Department.
- After several weeks, e-mailing multi-currency corporate bank account numbers to our Client.
- Within three weeks, arranging our Client to receive e-banking log in details, including corporate Visa debit cards and cheque books.
Contact us for assistance with opening an Indonesian corporate bank account.