JAKARTA (TheInsiderStories) - Indonesian stock exchange PT Bursa Efek Indonesia (IDX) said it will provide incentives to attract more offshore funds owned by Indonesians to be repatriated to Indonesia by way of r.elaxing requirements for companies to launch initial public offerings (IPO). The incentives will be effective until March 31, 2017
Under the new ruling, companies planning to launch IPO and take advantage the tax amnesty program is required to issue 20 percent of its enlarged capital, assuming its capital is less than Rp375 billion, 15 percent if its capital is between Rp375 billion-Rp1.5 trillion and 10 percent if its capital is more than Rp1.5 trillion.
On top of that, the IDX will also grant 50 percent discount on IPO fees.
To implement the ruling, the Financial Services Authority (OJK) will relax requirements for IPO of subsidiaries of state owned companies (SOEs) and simplifying regulations related to investing in the capital market in order to lure repatriated funds flowing into the capital market investment instruments such as Asset-backed securities (ABS), real estate investment funds (DIRE or REITs), limited investment funds and fund management contracts.
Separately, Directorate General for Portfolio & Risk Management of the Finance Ministry (Robert Pakpahan stated, his ministry plans to revise ministerial decree No. 122 and No. 123 to boost Indonesians offshore funds to be repatriated into the country.
In addition, should offshore fund owners investing in global bonds and global sukuk issued by the Indonesian government or Indonesian corporates, just changing their custodian banks from overseas to local, can be considered as repatriated funds.
With regard to treatment of assets which are still placed abroad prior to the implementation of Tax Amnesty Law or before August 31, 2015, the assets are required to be brought back to Indonesia through gateway institutions and are considered as domestic declared assets.
As for assets that are already parked in Indonesia after the law is effective and are yet to receive letter of recognition, are also considered as declared assets and after the implementation of the Tax Amnesty Law, are considered as repatriated assets.
Robert Pakpahan said his office will also revise ruling that allows offshore funds owners can repatriate their assets or funds in stages. In addition, the government will also revise ruling on investing in owned company using the repatriated funds.
In the event that an investor or tax payer is declared “failed to pay” when trading shares, he or she can withdraw his or her funds through gateway institutions as well as realize profits from investment instruments.
“The PMK (finance ministry ruling) will be issued in the immediate future in order to convince tax payers,” he said.
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