Indonesia Corporate Tax | GBG

In an attempt to win over more investors, the Ministry of Finance announced plans to reduce the corporate income tax rate from 25% to 17.5%; a figure nearing that of Singapore. Indonesia’s corporate income tax is slightly higher than its regional neighbours which can deter investors and often leads to the establishment of holding companies based out of Singapore thereby subjecting dividends to a more preferable taxation rate. Indonesia’s corporate income tax rate has been a particularly decisive factor for investors in the manufacturing sector where Indonesia faces stiff competition from markets such as Thailand and Vietnam. Key advisor to the President, Mr Luhut Panjaitan, has pledged to investors that the proposed plan will go through this year though there is no confirmation on the set time period.



Indonesia Corporate Tax | GBG

Indonesia General Insurance Industry | GBG

Thanks to its large and young population with increasing affluence, robust economic growth and relatively permissive foreign investment laws, Indonesia will continue to be one of the most coveted markets for the global insurance industry. Short-term capital outflows as a result of monetary tightening in advanced economies will not spoil the country's long-term appeal. The new Insurance Law has improved regulatory clarity and should yield new business opportunities in the takaful segment. Going into the regions with scaled-down products for individuals and small enterprises promises to unlock new demand among tens of millions of Indonesians who at present enjoy little or no insurance coverage. Drawing up easy-to-understand policies and educating people on the benefits of insurance will be a major part of this task.



Indonesia General Insurance Industry | GBG

Indonesia Residential Property Market | GBG

Several factors have affected the market environment for residential property in Indonesia over the past two years. Slowing GDP growth, rising interest rates and central bank measures to prevent excessive speculation call for a reassessment of investment prospects. While most of these factors point to a less bullish market in the near future, the longer-term prospects remain intact.



Indonesia Residential Property Market | GBG

Rupiah forecast 13900 by December 2015

Eric Sugandi, Chief Economist at the Standard Chartered Bank, expects Indonesia’s rupiah to have depreciated to IDR 13,900 per US dollar by the end of the year from IDR 13,339 currently (29/06) due to the impact of the bullish US dollar ahead of monetary tightening in the USA and the looming Greek exit from the Eurozone. Actually, this is a conservative prognosis. In case Indonesia’s central bank does not raise its benchmark interest rate (BI rate), currently at 7.50 percent, pressures on the rupiah may increase in fact increase further

http://www.indonesia-investments.com/news/todays-headlines/eric-sugandi-indonesian-rupiah-may-touch-idr-13-900-per-us-dollar/item5689

Asian answer to IMF

The AIIB will begin with authorized capital of $50 billion, eventually to be raised to $100 billion.

China is likely to hold a 25-30 percent stake, while India will be the second-biggest shareholder with a possible 10-15 percent, delegates at a meeting to finalise the new bank's articles of agreement told Reuters in May.

Germany plans to take a 4.1 percent stake to become the fourth-biggest member after China, India and Russia, according to a finance ministry draft document seen by Reuters earlier this month.

Australia said last Wednesday it would contribute A$930 million ($719.36 million) over five years to become the institution's sixth largest shareholder.

Indonesia will be the eighth-largest shareholder in the AIIB with an investment of $672.1 million over five years, its finance ministry said on Sunday.

http://mobile.reuters.com/article/idUSKBN0P801520150628?irpc=932

Investments in Indonesia growing

Investment in Indonesia continues to grow despite the economic slowdown in the country, Chief of the Investment Coordinating Board (BKPM) Franky Sibarani said after visiting eight investment projects in Banten and Central Java from June 9 to 12. These projects are among examples of 100 investment projects that were inspected to check whether they could run smoothly

http://m.nasdaq.com/article/investment-in-indonesia-continues-to-grow-indonesian-investment-coordinating-board-bkpm-20150615-00879

Subsidized lending rate to reduce

The government is preparing to cut the lending rate of its subsidized micro credit loan program (KUR) in half as it seeks ways to spur economic growth amid the decline in private consumption and exports, a minister says.

Finance Minister Bambang Brodjonegoro said on Friday as part of the government’s program to spur the local economy, the interest rate of the subsidized KUR loan could be reduced to as low as 12 percent from the current level of 22 percent and 24 percent.

http://m.thejakartapost.com/news/2015/06/13/govt-halve-micro-loan-interest-rate-12.html

Indonesia subsidizes lending rate for small biz

Indonesia wants to unleash 30 trillion rupiah ($2.3 billion) of new loans for small businesses and halve some bank micro lending rates to help revive an economy running at its slowest pace in five years.

http://www.bloomberg.com/news/articles/2015-06-10/indonesia-to-halve-lending-rates-to-small-business-amid-slowdown

Indonesia bans local transactions in forex

To encourage the use of Indonesian Rupiah (IDR) for domestic Indonesian transactions, the Bank of Indonesia passed, on 31 March 2015, Regulation 17 which will ban the use of foreign currencies in such transactions from July 1, 2015.

According to the Bank of Indonesia’s director of money management, the Regulation is part of an effort to avoid a “dollarized economy” and uphold the “sovereignty of the rupiah”.

http://www.lexology.com/library/detail.aspx?g=d2bedf4d-9000-436d-b58c-7565f44bbbae

BRI selling it's insurance company

Bank Rakyat Indonesia , the second largest lender by assets, has invited about six companies including BNP Paribas Cardif and Tokio Marine Holdings Inc to bid for a 40 percent stake in its insurance unit,

http://mobile.reuters.com/article/idUSL3N0YU0YZ20150608?irpc=932

Indonesia not renewing Bilateral Agreement with Singapore

Indonesia has informed Singapore that it does not want to continue with a bilateral agreement signed in 2005 by both countries to promote greater investment flows, and this is an issue that must be addressed for both nations to boost economic ties, said Prime Minister Lee Hsien Loong.

It will be interesting to observe this negotiation - whether Jokowi is able to get his terms.

http://m.todayonline.com/world/asia/economic-ties-strong-despite-jakarta-not-renewing-treaty