Indonesia Drafting Debt-to-Equity Ratio Rules for Overseas Loans

According to recent reports, Indonesia is currently in the process of finalizing draft rules on the debt-to-equity ratio limit for Indonesian companies looking to finance with foreign loans. Previous plans indicated a debt-to-equity ratio of 3:1, although it is expected that the final rules will include ratios that vary depending on industry.

Currently, Indonesia has no specific ratio set in thin capitalization rules. In general, interest deductions may be denied when a company's debt-to-eq…