Top 3 Money Transfer Providers for UK to Indonesia

Daniel is Founder and CEO and has 20 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely quoted as an expert within the money transfer industry including by The Economist, The Wall Street Journal, Reuters, CNBC and Bloomberg. Daniel is passionate about helping consumers and businesses find the best and most efficient ways to transfer money internationally.

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Frequently asked questions

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Contents

Summary

There are few restrictions on transferring money to Indonesia. Money transfers from Indonesia related to the settlement of foreign trade, incoming or outgoing offshore grants, bank deposits held in foreign currency, or offshore loans may be completed in foreign currencies. However, most other settlements within Indonesia must be conducted in rupiah. We recommend consulting with a bank or other financial institution before conducting settlements, as restrictions can vary.

Indonesia Money Transfer Regulations

Central bank approval is necessary to carry hard currency with a value over IDR 100m out of the country. Local or foreign currency over IDR 100m may be brought into the country, but it must be declared to Indonesian customs authorities, accompanied by proof of the funds’ authenticity. Banks and other licensed foreign exchange dealers are allowed to freely transfer funds in and out of the country, but they must report all overseas transactions to the central bank, Bank Indonesia, regardless of the amount.

New regulation introduced in December 2012 stipulates that companies and individuals who receive income from exports or foreign loans must withdraw those funds through foreign exchange banks located within Indonesia and report the transaction to the central bank. However, once repatriated, these funds may then be freely transferred outside of Indonesia.

Indonesia’s regulatory authority

Bank Indonesia sets national monetary policy, monitors the health of the financial system and works to reduce the volatility of the national currency, the Indonesian rupiah (IDR). The rupiah may be freely converted into foreign currency, but the central bank applies several foreign exchange controls in order to ensure price stability and preserve the country’s foreign exchange reserves.

Investment and taxation issues

While the government has relatively few currency restrictions for incoming investment, Indonesia’s business environment can be complicated and hard to navigate, largely due to opaque bureaucratic processes and local partnership requirements. Foreign direct investment (FDI) is heavily restricted in certain sectors such as forestry, public transport, and media, and we recommend consulting the latest list issued by the central bank and Ministry of Foreign Affairs before undertaking FDI projects. Dividends and interest paid to non-residents are subject to a 20% withholding tax; royalties are also subject to a 20% withholding tax if they are remitted abroad.

There are few restrictions on foreign property ownership, though several taxes apply. A one-time transfer tax equivalent to 5% of the acquisition value is levied on purchases of land or buildings, in addition to an annual real property tax equivalent to 0.3% of the property’s sale value. Non-residents are subject to personal income tax only on revenue generated in Indonesia; residents are taxed on their worldwide income.

Currency

The country’s monetary unit, the Indonesian Rupiah (IDR), often uses the abbreviation Rp. One rupiah is equivalent to 100 sen, however, sen have largely fallen out of use due to inflation. The central bank issues banknotes in values of Rp1000, Rp2000, Rp5000, Rp10,000, Rp20,000, Rp50,000 and Rp100,000. Coins are available in values of Rp50, Rp100, Rp200, Rp500 and Rp1000. Domestically, rupiahs are most often traded against the USD and the Japanese yen.