BUSINESS FACILITIES

Bank Indonesia (BI) as an independent state institution is fully autonomous in formulating and implementing each of its task and authority as stipulated in the new Central Bank Act, Law No. 23/1999. As a central bank, BI has a single objective of attaining and maintaining stability of the rupiah value. In the pursuit of the objective, it is supported by 3 sectors of task which are formulating and implementing monetary policy system, regulating and ensuring a smooth payment system, developing sound banking and credit systems by building and supervising banks.

BI does not perform the commercial activities of banks in general, of commercial banks as well as of rural credit banks. Therefore, BI cannot serve saving and checking accounts as well as deposits from the public. In addition the public cannot directly request for credit from BI. (Online : www.bi.go.id)

Relating to foreign investment, Bank Indonesia plays the following roles :

To support business activities in Indonesia, there are foreign banks operating in Indonesia such as ABN AMRO Bank, American Express Bank, Bank of America NA, Citibank NA, Deutsche Bank AG, JP.Morgan Chase Bank, Standard Chartered Bank, The Bangkok Bank Comp. Ltd., The Bank of Tokyo-Mitsubishi Ltd., The Hong Kong and Shanghai Banking Corp. Besides there are 5 (five) state-owned banks, namely PT. Bank Ekspor Indonesia (Persero), PT.Bank Mandiri (Persero), PT.Bank Negara Indonesia (Persero),Tbk., PT. Bank Rakyat Indonesia (Persero), and PT.Bank Tabungan Negara (Persero). In addition, there are 36 (thirty six) Devisa National Private Banks, 40 (forty) Non Devisa National Private Banks, 26 (twenty six) Region Development Banks, and 24 (twenty four) Joint Ventures Banks. Other financial institutions include 176 insurance companies both international and national, and 145 leasing companies in Indonesia.

LEGAL ASPECT

1. Foreign Capital Investment Law No.1 of 1967

a.      Foreign Direct Investment (FDI), further referred to as PMA (Penanaman Modal Asing), is governed primarily by the Foreign Capital Investment Law No. 1 of 1967, as amended by Law No. 11 of 1970. Based on the Law. Based on this law , the government introduced various policies and measures on FDI where great efforts is now focused on promoting Foreign Direct Investment in Indonesia.

b.     A PMA company is granted 30 years to operate after its legal formation. If the company commits additional investment within this period, another 30 is granted separately for the expansion project. The period to operate for both first and additional investment can be extended for another 30 years.

2. Domestic Capital Investment Law No. 1 of 1967

a.      Domestic Direct Investment, further referred to as Penanaman Modal Dalam Negeri (PMDN) is governed primarily by the Domestic Capital Investment Law No 6 of 1968 as amended by Law No. 12 of 1970.

b.     A PMDN company is entirely owned by Indonesian investors which is formed either as joint venture or individual proprietorship

3. Corporate Law No. 1 of 1995

Either foreign direct investment of domestic direct investment, Corporations further referred to as Perseroan Terbatas (PT) are the most common legal business entities in Indonesia.

4. The Government Regulation No. 20 of 1994 on Share Ownership

a.      In general , PMA (Penanaman Modal Asing) company is established as a joint venture between foreign and Indonesian nationals. The partnership may involved legal entities (corporations) or individual persons and there is no requirement on the minimum amount of investment (equity plus loan). The amount is for the parties concerned to determine base on their economies of scale and business considerations.

b.     PMA companies in infrastructure projects such as ports, generation and transmission as well as distribution of electricity for public use, telecommunications, shipping, airlines, potable water, public railways and nuclear electric power generation should be established through joint ventures between foreign and Indonesian state-owned enterprise.

c.      A PMA company may be established as a straight investment, or 100% foreign ownership. It is required, however, that not later than 15 years of commercial operation, the company starts to be divested by selling some of its shares to Indonesian individual(s) and/or business entities, through direct placements and/or indirectly through domestic stock exchange provided that the Indonesian share is maintained at least 5%.

CUSTOMS FACILITIES

Customs Facilities For Fostering Trade, Industry & Investment

ü     Bonded Zone

The Facilities include:

·        Differed of customs duty and un-imposition of VAT, Luxury Goods Tax, and Income Tax Art.22 for:

     -  Import of capital goods or equipment;

     -  Import of material and goods to be processed;

·        Un-imposition of VAT and Luxury Goods Tax for:

     -  Inward of Taxable Goods (TG) from other

        Customs Territory of Indonesia (CTI) for

        further process;

     -  Delivery of processed goods from BZ to other

        BZ for further process;

-  Outward of goods and/or raw materials from

        CTI to BZ under sub-contract scheme;

     -  Reshipment of TG from subcontract process

        to Taxable Manufacturer (TM) at CTI or other

        BZ to originated TM of BZ;

     -  Rental of machinery and/or factory equipment

        related with subcontract;

·        Exemption of Excise for:

     -  Import of Excisable Goods for further process;

     -  Excisable goods from CTI for further process.

ü     Bonded Warehouse ;

The main difference between BZ and BW is that BW is intended to be a distribution center rather than a processing place like BZ

The Facilities include :

§         Differed of customs Duty and un-imposition of VAT, Luxury goods tax, IT article 22 from imported good or equipment for building up and activities at BW and importation of goods for storage at BW

§         Exemption of excise for importation of excisable goods to be stored at BW

ü     Import Facility for Export Purpose (KITE);

Exemption of Import Duty:

goods and materials to be processed, assembled, or installed for export purposes;

ü     Industrial investment (BKPM).

Relief of Import Duty:

·        machinery for the establishment and development of industry;

·        goods and materials for the establishment and development of industry for a specified period of time;

CUSTOMS PROCEDURES

·        Import and Export (IT and Risk Management application)

·        Channeling (Priority, Red, and Green);

·        Pre Entry Classification;

·        Valuation Ruling;

·        Returnable Package

Customs Clearance Procedure on Import
(Electronic Data Interchange / EDI Network)

Customs Clearance Procedure on Export

(Electronic Data Interchange / EDI Network)