Indonesia's New Rules on Export Proceeds: Impacts on Transactions
5 minute read | March.17.2025
On February 17, 2025, Indonesia’s President issued Government Regulation No. 8 of 2025, which amends the previous Government Regulation No. 36 of 2023 on Export Proceeds from Activities Relating to the Business and Management and/or Processing of Natural Resources (GR 8/2025). The regulation came into effect on March 1, 2025.[1]
If a company is considering project finance, it may need to discuss with prospective lenders whether they can accept an onshore collection account and an onshore reserves account, if needed. Given the uncertainty about whether export proceeds can be used to immediately repay loans (or only for loans related to capital goods), borrowers should consider proposing sculpting the repayment schedule to accommodate delayed cash flow availability, ensuring that debt service obligations align with the eventual release of funds.
The New 100% Onshoring Requirement
Export proceeds from oil and gas products are exempt from the 100% Onshoring Requirement.[4] However, oil and gas exporters must retain 30% of their export proceeds in the Indonesian banking system for three months,[5] as previously outlined by GR 36/2023 (discussed further below).
Under GR 8/2025, export proceeds may be placed in (1) a special account at Indonesia’s Eximbank or a bank that carries out foreign currency transactions (i.e., a commercial bank), (2) bank instruments, (3) financial instruments issued by the Indonesia Eximbank or (4) instruments issued by Bank Indonesia.[6]
GR 8/2025 mentions that export proceeds in such accounts may be used by the exporter to: (1) exchange monies into Rupiah at the same bank; (2) pay taxes, non-tax state revenues and other obligations to the state in a foreign currency; (3) pay dividends in a foreign currency; (4) procure goods and services in a foreign currency, including raw materials, supporting materials or other capital goods not available in Indonesia; and/or (5) repay loans for capital goods in a foreign currency (Allowed Usage).[7]
GR 8/2025 states that amounts used for the Allowed Usage may be deducted from the amounts subject to the 100% Onshoring Requirement.[8] This means a borrower can use the export proceeds for certain payments and loan repayments under Allowed Usage prior to depositing the balance in the Indonesian banking system for 12 months.
GR 8/2025 also mentions that export proceeds placed in a special account may be used to (1) pay customs fees and other export-related fees; (2) make loan repayments; (3) pay for imports; (4) pay dividends; and (5) for other uses as outlined in Law No. 25 of 2007 on Capital Investment, which includes capital expenditures, expenses for capital goods and payments under project contracts.[9] It is unclear whether these payments fall under Allowed Usage, as GR 8/2025 does not explicitly state that payments for these purposes may be deducted from the amounts subject to the 100% Onshoring Requirement.
Therefore, unless the monies can be used for the Allowed Usage, Indonesian exporters of certain natural resource products will need to keep 100% of their export proceeds in the Indonesian banking system for at least 12 months.
Brief History
The requirement to retain proceeds within the Indonesian banking system is not new, as Bank Indonesia has mandated all exporters to do so since 2012.[10]
In 2019, under Government Regulation No. 1 of 2019 on Export Proceeds from Activities Relating to the Business and Management and/or Processing of Natural Resources, natural resources exporters were required to designate a special account to receive such export proceeds. During this time, all exporters, including those of natural resources, could transfer 100% of their export proceeds to offshore accounts immediately after depositing them into an Indonesian account.
In July 2023, Indonesia’s President issued Government Regulation No. 36 of 2023 on Export Proceeds from Activities Relating to the Business and Management and/or Processing of Natural Resources (GR 36/2023). Under GR 36/2023, exporters of (1) mining, (2) plantation, (3) forestry and (4) fishery resources in Indonesia receiving export proceeds of US$250,000 or more per transaction were required to retain 30% of their export proceeds in the Indonesian banking system for three months.[11] The MOF further specified the exported products subject to GR 36/2023 in a separate regulation.
The issuance of GR 36/2023 impacted companies exporting natural resources with project financing arrangements, as lenders typically required all proceeds to be held in accounts outside of Indonesia. Consequently, many borrowers had to restructure their financing and account arrangements to comply with GR 36/2023.
What’s Next
It remains to be seen how companies will implement the 100% Onshoring Requirement and how lenders will respond. However, natural resources exporters under GR 8/2025 should begin actively discussing the implications of GR 8/2025 on their current or potential projects.
We expect to see an implementing regulation from Bank Indonesia on how the 100% Onshoring Requirement will be implemented in practice and possibly a regulation from the MOF on the specific products subject to GR 8/2025.
[1] Article II, paragraph (3) of GR 8/2025.
[2] Article I, paragraph (1) of GR 8/2025.
[3] Article I, paragraph (1) of GR 8/2025.
[4] Article I, paragraph (1) of GR 8/2025.
[5] Article I, paragraph (1) of GR 8/2025.
[6] Article I, paragraph (2) of GR 8/2025.
[7] Article I, paragraph (4) of GR 8/2025.
[8] Article I, paragraph (4) of GR 8/2025.
[9] Article I, paragraph (3) of GR 8/2025.
[10] Bank Indonesia Regulation 13/20/PBI/2011 on Receipt of Export Proceeds and Disbursement of Offshore Loans.
[11] Article 5 paragraph (1), Article 5 paragraph (2), Article 6 paragraph 2 and Article 7 of GR 36/2023.