Foreign representative offices are typically formed to facilitate transactions between local and foreign buyers and suppliers. According to BKPM Regulation No. 5 Year 2013, there are 2 (two) types of representative office in Indonesia i.e. KPPA (Kantor Perwakilan Perusahaan Asing) and KP3A (Kantor Perwakilan Perusahaan Perdagangan Asing). The process of the establishment of representative office takes approximately 1-2 months.
There are several similarities of KPPA and KP3A, such as:
- The Licenses for the KPPA and KP3A will be issued by BKPM (Investment Coordination Board);
- The Head of Representative Office may be Foreigner or Indonesian;
- Both KPPA and KP3A should not conduct business (selling/buying) in which to generate income in Indonesia.
Representative office acts only as a supervisor, liaison, coordinator, and manage the interests of the company or its affiliated companies in Indonesia. Representative office is established when the client intends to explore the market first before deciding to establish limited liability company in Indonesia.
The outcome of representative office establishment as follows:
- Approval of Representative Office by BKPM
- Domicile Letter
- Company Tax ID
- Company Registration Certificate
- Period : 2 months
- Fee : US$ 1,000 up to US$ 1,500
– Representative office is limited to marketing and promotion activities, as it is not allowed to do direct selling and receive income (all transactions shall be done through the mother company)
– There is no minimum investment requirement
– There is no shareholder and director requirement
– For companies domiciled in the South Jakarta, Social and Health Security registration is required during the incorporation process. Bizindo can assist for a fee of USD 250.
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