Rupiah, export proceeds and dividends: moving money in and out

Indonesia lets foreign investors bring money in and take profits out, and the Investment Law says so in plain terms. The friction sits in the rules around it. Deals inside the country have to be in rupiah, exporters of coal and palm oil have to keep their export earnings onshore for at least 12 months and dividends paid abroad carry withholding tax.

Most of the work is in the records. Money that came in through the right accounts, booked as the right thing, goes back out with fewer questions.

Currency risk

Your asset earns in one currency, and you may count your returns in another. Coal and palm oil are priced off dollar markets, while wages, contractors and land costs are paid in rupiah. Property earns rupiah. When the rupiah weakens, a rupiah-earning asset is worth less in dollars, and an exporter’s local costs shrink against its sales.

The rupiah moves with commodity prices and with the gap between Indonesian and US interest rates. It also moves with foreign money flowing into and out of Indonesian bonds and shares, and with Bank Indonesia’s policy. It can move fast: in the 1997 to 1998 crisis it lost most of its value against the dollar. Nobody can tell you where it will go, so test any plan against a much weaker and a stronger rupiah. Indonesian banks offer forwards and swaps, and they’ll ask to see the transaction you’re hedging.

Paying in rupiah inside Indonesia

Law 7 of 2011 on Currency requires rupiah for payments, for settling obligations and for other financial transactions inside Indonesia, in cash or not. Bank Indonesia Regulation 17/3/PBI/2015 adds that prices of goods and services must be quoted only in rupiah. The exceptions include international trade, international financing, foreign-currency deposits at banks and grants to or from abroad.

So a land purchase, a lease or a building contract in Indonesia is priced and paid in rupiah. An export contract can be in dollars, and so can a loan from abroad. Refusing rupiah, or paying cash in another currency, can be a criminal offence under the Currency Law, and a non-cash breach can draw a fine of 1% of the transaction value, up to IDR 1 billion. In practice you bring the money in as foreign currency, convert it at a bank in Indonesia and pay in rupiah.

Export proceeds from coal and palm oil

Exporters of natural resources have to bring their export proceeds (devisa hasil ekspor, DHE) into Indonesian banks and hold them in special accounts for a set time. The base rule is Government Regulation 36 of 2023, and it has changed twice. From 1 March 2025, Government Regulation 8 of 2025 required exporters outside oil and gas to keep 100% of their proceeds onshore for 12 months.

Since 1 June 2026, under Government Regulation 21 of 2026, those exporters still keep 100% for at least 12 months, but the accounts have to be at state-owned banks and no more than 50% of the retained money can be converted into rupiah. Oil and gas exporters keep at least 30% for three months. Exporters with affiliates in countries that have agreements with Indonesia can place part of their proceeds on lighter terms.

For a coal miner or an exporting estate, a year’s revenue sits onshore before it’s free. Check what the current rule allows before you plan a dividend or a loan repayment out of export earnings. An exporter that doesn’t comply can have its export services suspended.

Coal and palm oil have a second layer. Government Regulation 24 of 2026, in force since 1 June 2026, routes their exports through a state export company, PT Danantara Sumberdaya Indonesia. Until 31 December 2026, exporters still sell to their buyers directly and report to it. From 1 January 2027 it’s due to be the only exporter, so ask how a producer will then be paid, in what currency and on what terms. The levies and royalties are covered in palm oil prices and levies and coal royalties and taxes.

Taking profits out

Article 8 of the Investment Law (Law 25 of 2007) gives investors the right to transfer and repatriate, in foreign currency, their capital, profits, dividends, interest, loan repayments and the proceeds of selling or winding up the investment, subject to reporting rules and tax. Law 24 of 1999 on foreign exchange lets residents hold and use foreign currency freely, as long as they report that activity to Bank Indonesia.

A company can pay dividends only out of positive retained earnings, under the Company Law (Law 40 of 2007), and it has to set aside part of its profit each year until its reserve reaches 20% of its issued and paid-up capital. Interim dividends are allowed if the articles of association provide for them, but shareholders have to return them if the year ends in a loss.

Dividends paid to a shareholder abroad carry 20% withholding tax under Article 26 of the Income Tax Law. A tax treaty can cut that: many of Indonesia’s treaties set 10% or 15%, and a few go to 5% for a large shareholding. To use a treaty rate, the shareholder has to give the company a certificate of domicile in the form the Indonesian tax office prescribes, certified by its home tax authority, and it has to be the beneficial owner of the dividend. The tax office checks that closely. Without the form, the company withholds 20%. Interest on a loan from abroad also carries 20%, which many treaties cut to 10%.

Records that keep money moving

• Bring capital in through the company’s own bank account in Indonesia, and keep the transfer records that show it came from the shareholder named in the deed.
• Book each inflow as what it is: paid-up share capital in a notarial deed, or a shareholder loan under a written agreement. Loans from abroad have to be reported to Bank Indonesia.
• Keep the quarterly investment reports (LKPM) current, so the investment on record matches the accounts, as covered in setting up a PT PMA.
• Before each dividend, have approved accounts, a shareholders’ resolution, the withholding tax paid and the treaty form on file.
• Above an amount Bank Indonesia sets, a bank selling the company foreign currency will ask what it’s for, so give it the resolution and the tax receipts.