For companies or foreign investors who want to invest in Indonesia, one of the things to understand is the process of opening a bank account and the type of account for business transactions.
Understanding Bank Account Types in Indonesia
In Indonesia there are three types of accounts: checking accounts, savings accounts and deposit account. Numerous banks in Indonesia offer both rupiah and foreign currency savings accounts (commonly US$), checking accounts, deposit accounts as well as credit and debit card accounts.
Generally, foreign banks have requirements to open a personal bank account. They include a reference letter from an employer or sponsor, copies of your passport and temporary stay permit (KIMS, KITAS card), or permanent resident license (KITAP).
For checking accounts, it may require other documents. They include a reference from previous bank, company’s Tax Registration Number, and a letter from a company verifying that Indonesian income tax is paid.
Most banks also require you to maintain a minimum deposit for a personal account in US dollars. However, some companies run a system whereby you can write a personal check from your home account and the company issues the cash in Rupiah.
Companies in Indonesia that have a foreign shareholder must maintain a bank account. Set it up with a bank that has the license to handle foreign currencies ( known as Foreign-Exchange Bank or Bank Devisa).
Indonesian law requires every bank to conduct certain “know your customer” procedures. In practice, banks may apply different requirements. However, they require at least the following information about their customers:
For a natural person:
- Copy of identity card or passport;
- For foreigners, copy of staying permit in Indonesia/temporary resident permit.
For a corporate entity:
- Memorandum and/or Articles of Association;
- Business licenses (for Indonesian companies); and
- Taxpayer identification number (for Indonesian companies).
There are no specific restrictions on the use of a bank account by its holder, with the exception of its use for money laundering, terrorism funding.
The Advantages of Each Type of Bank Account
- Ability to make a payment using a check or giro (demand deposit)
- Ability to delay payment by check retroactively
- Can be used as a tool for transfers and debits
- Can be for ATM access
- Is a tool for amassing assets
- Interest on deposits is higher than a savings account,
- Deposits are withdrawn in accordance with the agreement with the bank customer
- Can be transferable (certificates of deposit )
The company can choose the type of account that suits best with their needs. From a business perspective, using a checking account is easier. There will be a statement from the bank to track financial transactions.
In addition, you can set up a checking account for automatic payments to withdraw deposits or giro on a certain date and facilitate cash management for the company.
How to Open a Bank Account in Indonesia
The regulation of Central Bank of Indonesia requires that all banking transactions (such as capital injection, administration of loans, payment of capital equipment, raw material) of a newly established foreign investment company be transacted through a special foreign investment bank account in Indonesia.
Submit the following documents:
- BKPM Initial Investment Approval, Deed of establishment, domicile letter, tax number
- The power of attorney to the person who is given the authority to open bank account
- Copy ID/passport of the authorised person to open bank account
- Photo of the authorised person to open bank account
- Minimum deposit is Rupiah 1 million or USD 1.000
Timeline: Approximately 5 (five) days.
However, each bank has its own requirements for foreigners to open an account. Generally, they require the following:
IDR Rp 1,000,000; USD 1,000; SGD 2,500; EUR 1,000; AUD 2,000; GBP 1,000; JPY 150,000; HKD 10,000; CHF 2,000.
Individual Account Opening
- 21 years older or married
- Completed and signed application form along with supporting details
- Copies of an identity card (ID/Passport and KIMS/Permit)
- 4 × 6 photograph
Company Account Opening
- Completed and signed application form along with supporting documents
- Copies of identity card (ID/Passport and KIMS/Permit of authorized officer)
- NPWP (tax registration number, TDP, Business License, and the Certificate of Incorporation)
Opening bank account for Representative Office in Indonesia
Since representative office only allow to do marketing and promotion activities, you cannot generate revenue in Indonesia. Thus, the revenue should go directly to head office. But you can open bank account for representative office for financial importance with the following documents:
- Copy of Company Registration (TDP)
- Business License
- Copy of tax number (NPWP)
Actually, opening a bank account does not take a long time and can be done in a day together with the debit card (ATM) application. Generally, some banks require a minimum deposit to open an account. For credit card applications, similar documents will be required. Your case might be different, contact us now to discuss further.