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How to Open an Indonesian Bank Account?

Posted 10.11. 2017 by Cekindo / Last update on 14.11. 2017

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Are you planning to live abroad or just traveling for leisure? You will agree that exchange rates and transaction fees on your bank account can sometimes be a nightmare. Not only is it inconvenient to be using an international card as it costs you adding charges. It will be time-consuming and inefficient to settle the support service favorably in cases there are some serious issues pop up. Consequently, starting a local account (will seem to be or) is actually a great solution. This article will provide you with the basic and most important information about starting an Indonesian bank account.

Why Open an Indonesian Bank Account

Even though spending money on “nothing” is not fair, it is a daily reality for expats living in Indonesia; unless they have a local Indonesian bank account. In addition to extra fees for using an international card while making payments, having a local bank account may just be much safer. In order to avoid exorbitant fees for each ATM withdrawal, expats tend to withdraw higher amounts of money. They always keep the cash always with them. Consequently, this action provides a very easy and convenient way “enrich” pickpockets and other similar thieves.

However, not having cash with you is neither a good strategy, especially in Indonesia. As Indonesia belongs to the list of nations that are unbanked and even underbanked, in reality, the country gives you limited options on when you can use your credit/debit card. The Indonesian government recently issued new regulations that may settle the issue and bring it to an end. Today, starting an Indonesian account has never been easier.

Know the Process

There are two or three major players, either local or smaller institutions, following the Indonesian banking market. The requirements for opening a bank account differs from each of these banking institutions. The general description might not correspond with the reality of your future bank. However, it is advisable to use the services of the bigger banks, such as Mandiri, BRI or BCA.

More Lenient Conditions

The main reason why opening an Indonesian bank account is easier nowadays is that under some conditions some bank institutions no longer require a passport with a valid temporary residence permit, known as KITAS. As a result, expats who do not come to Indonesia sponsored either by an Indonesian entity or Indonesian spouse; do not apply for retirement KITAS; are able to open Indonesian bank as well.

The New Process

Reforms on the process of opening an Indonesian bank account enables foreign nationals to choose from three different bank account options, based on the deposits (balance) that have to be made on it, and they are as follows:

Limited Balance Tourist Account (USD $2,000 – USD $50,000)

Obviously, as its name suggests, tourists and expats coming to Indonesia for a short-term visit will benefit from the so-called tourist bank account, which should have a limited minimum balance of US$ 2,000 and a maximum balance of US$ 50,000. It is possible to open a limited balance tourist account with your passport and without the need for your KITAS. However, bank institutions impose higher transaction fees if the balance does not exceed USD $ 10,000.

Unlimited Balance Expat Account

Expats who are willing to open an Indonesian account with higher balance should opt to use an unlimited balance account; this is not related to a fixed balance. To open this account, a foreign national needs to prove his identity with a valid passport and one additional document by choice. It might be a reference document from a bank in their home country, a domicile letter of the expat, a credit or debit card, copies of residence contracts, or identification papers of the expat’s spouse.

Special Balance Expat Account

Some Indonesian banks that comply with certain risk management requirements and prudent banking are allowed to open a bank account for expats whose balance exceeds USD $1 million. The requirements are the same as in the case of the unlimited balance expat account; as a result, a foreign national must show his/her passport and an additional document. This kind of an account applies progressive taxing (the higher the balance, the lower the tax rate) and tax on interest on deposits is lower than the general tax rate.

Theory versus Reality

People expected that the growing number of incoming foreign visitors would urge the Indonesian government to loosen the existing strict and sometimes absurd conditions for expats. However, in Indonesia, loosening of government restrictions does not always mean simplifying the process. When opening a bank account, the majority of the country’s banks still consider KITAS as a mandatory document. But, it is not a legal requirement for you to be stress now.

Thanks to the vast network of contacts, Cekindo can provide you with the information about specific bank institutions and assist you with opening a bank account in Indonesia.



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