UPDATE 1-Indonesia to strengthen rules on repatriating revenue from resource exports
(Adds details, foreign investment relaxation)
By Gayatri Suroyo
JAKARTA, Nov 16 (Reuters) - Indonesia's government istightening requirements to force companies to repatriate revenuefrom the export of natural resources, a minister said on Friday,as authorities seek to support a fragile rupiah currency.
Special accounts will be created for exporters to depositexport revenue at local banks to allow for better monitoring bythe government, Darmin Nasution, coordinating minister foreconomic affairs, told reporters. The new regulation due to takeeffect Jan. 1.
Companies would be barred from exporting if they do notrepatriate earnings but would be allowed to keep earnings indollars, though there would be tax incentives if they convertearnings to rupiah, he said.
Nasution said companies would be allowed to use therepatriated proceeds to fund imports or foreign debt payments.
"It is mandatory to repatriate the earnings and deposit themin the (banking) system. The earnings can still be used for thecompanies needs, but supporting documents must be provided," hesaid.
"We have to formulate policies to give confidence to fundowners so that they will flow into the country, whether it isshort-term capital inflow or foreign direct investment,"Nasution said.
Indonesia has required exporters to receive their earningsthrough onshore banks since 2012. Central bank data shows while90 percent of such earnings already flow through local banks,only 15 percent of these funds are converted to rupiah.
The rupiah has strengthened 1.5 percent over the pasttwo days, driven higher by Bank Indonesia's surprise interestrate rise on Thursday and climbing off from levels not seensince the 1998 Asian Financial Crisis.
On Friday, the government also said it would relax foreigninvestment restrictions to help boost investment.
Nasution said 54 business sectors previously partiallyclosed to foreign ownership would be opened for full foreignownership.
These included fabric printing, weaving, and certain dairyprocessing industries, Industry Minister Airlangga Hartartosaid.
The policy package will also include the expansion ofIndonesia's tax holiday programme.
(Writing by Fransiska NangoyEditing by Ed Davies and Kim Coghill)
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