Reporting by Indonesian companies of their offshore loan facilities



It is common for banks or financial institutions outside Indonesia to provide loan facilities to Indonesian companies, including loans related to export credit facilities. Except in certain cases such as a loan that involves funding for a project that also involves the government or a state owned enterprise, current regulations require offshore loans to be reported to Bank Indonesia, the Ministry of Finance (MOF) and the Offshore Commercial Loan Coordinating Team (PKLN Team); no specific approval from these agencies is required to obtain a loan from offshore.

However, although this obligation is only a report that must be submitted by the Indonesian private companies, as borrowers, (‘Indonesian borrowers’) to the relevant government’s agencies, this report is always a very important document due to some court decisions in Indonesia in the 1980s, which held that failure to comply will invalidate the loan agreements. Although the decisions of Indonesian courts are not binding as precedent, in practice the reporting obligations usually become part of the conditional precedent for the loan drawdown to ensure that Indonesian borrowers comply with these reporting obligations.

Under Bank Indonesia Regulation on Foreign Exchange Activities Reports, there are three main types of reporting that must be made by Indonesian borrowers related to their offshore loan: (i) the plan to obtain offshore loan report; (ii) the implementation of the offshore loan report; and (iii) the offshore loan activities period report.

Indonesian borrowers must file certain reports with Bank Indonesia in relation to its plan to obtain a long term offshore loan, such as an offshore loan plan for one year; risk management analysis report; and credit rating from either domestic or international rating institution (if any), at the latest on 15 March of the relevant year. Bank Indonesia provides the forms that must be completed by Indonesian borrowers for this purpose. If there are any amendments to the above reports, or if the Indonesian borrowers plan to obtain an offshore loan after 15 March, these reports must be submitted at the latest on 1 July of the same year.

After the offshore loan plan report has been submitted and the loan agreement has been signed or a drawdown of the offshore loan has been made (whichever is earlier), the Indonesian borrower must file the main data of the offshore loan with Bank Indonesia at the latest on fifteenth day of the following month of the signing of the loan agreement or the drawdown of the offshore loan. There are (online) standard forms that must be completed by Indonesian borrowers for this purpose. In addition, to comply with Presidential Decree No. 59 of 1972 on the Receiving of Offshore Loans (and its implementing regulation) and Presidential Decree No. 39 of 1991 on the Coordination of Foreign Commercial Loan Management, the same report (together with a copy of the signed loan agreement), in hard copy, is also submitted to the MOF and the PKLN Team. The above decrees do not provide precise deadlines for filing the reports with the MOF and the PKLN Team and therefore, in practice, the reports (the initial and periodical reports) are filed concurrently with the report to Bank Indonesia.

The Indonesian borrowers will also then have to file the following periodical reports: (i) offshore loan monthly transaction and position reports with Bank Indonesia, at the latest on the fifteenth day of the following month (as explained, these reports should also be copied to the MOF and the PKLN Team); and (ii) semi-annual financial information reports with Bank Indonesia by 15 June (for annual reports) and 15 December (for interim reports). All these reports to Bank Indonesia must be submitted online.

Furthermore, in addition to the reporting requirements required under Bank Indonesia regulation above, since 2011 Bank Indonesia has also imposed an additional requirement (under Bank Indonesia Regulations on The Receipt of Foreign Exchange from Export Proceeds and Drawdown of Foreign Exchange from Offshore Debts) that any foreign currency offshore loan proceeds received by Indonesian borrowers in the form of cash generated from (i) non-revolving loan agreements which will not be used for refinancing, (ii) surplus between the refinancing facilities and the existing facilities and (iii) debt securities (such as bonds, medium term notes, floating rate notes, etc.) must be received through banks in Indonesia (including foreign bank branch offices in Indonesia) which are licensed to conduct banking activities in foreign currency. To evidence the satisfaction of this requirement, Bank Indonesia requires another report, i.e., the report on the drawdown of the offshore loan proceeds that are subject to the above conditions, at the latest on the tenth day of the following month. This report must include supporting documents showing that the offshore loan has been actually drawn down through the qualified banks.

As explained in the beginning, if the Indonesian borrowers are state-owned companies or regional government owned companies or if the projects financed by the offshore loans involve (directly or indirectly) the government of Indonesia, they will be subject to other requirements for obtaining offshore loans, including approval from the MOF before receiving any offshore loan. Approval from the MOF is usually issued only after the MOF has discussed the proposed offshore loan with other related government agencies, such as the PKLN Team, Bank Indonesia, etc. For companies engaging as banks or financial institutions, in addition to the reporting obligations explained above, they are also subject to other requirements and limitations due to their business activities, including limitation on the amounts obtained.


Maria Sagrado is a partner at Makarim & Taira S. She can be contacted on +62 21 252 1272 or by email:

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Maria Sagrado

Makarim & Taira S

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