KPPA Bank & Finance

When you want to set up Representative Office in Indonesia and start doing business in indonesia, it is important for you to understand about KPPA.

1. Representative Office of a Foreign Bank and Finance

A representative office undertakes one or more of the following activities. The Central Bank’s Board of Directors Resolution No. 57/3/1996 dated 14/4/1996 regarding Representative Offices:

• 1. Representing the financial institution licensed to deal inside the country, including contacts on its behalf with concerned agencies as well as promoting its services in the local market;
• 2. Providing the head office of the licensed financial institution with data relating to economic developments in the country;
• 3. Providing customers of the licensed financial institution with information on the local market;
• 4. Providing data to local agency, which intends to develop its business at countries wherein the licensed institution conduct its business;
• 5. Providing customers with banking, financial and investment consultation services.

The representative offices should represent a bank or any other financial institution incorporated outside the country, holding a valid license obtained from competent authorities. Such bank or financial institution should also be subject to the direct supervision and examination of the said authorities at the country of origin and/or the head office as per laws of the country.

2. KPPA Operating period

Maximum operating period of KPPA is 5 (five) years. Initially the KPPA is granted with 3 (three) years operating period, which can be extend twice, each for 1 (one) year. After 5 years of KPPA Operation in Indonesia, the Parent Company can:

• a. Apply for another extension for the KPPA, however the activities of KPPA must be different from before.
• b. Close the KPPA and directly invest by setting up a PMA Company in Indonesia.

3. Procedure

Applications for obtaining permits to establish KPPA shall be submitted to the Head of the Investment Coordinating Board (“BKPM”). The steps are explain below:

• a. Registration is submitted to BKPM by completing the KPPA Model form as set forth in Attachment of Perka BKPM No.5 / 2013 Jo Perka BKPM No.12 / 2013 is XI.
  • 1. Supporting Documents:
    2. 1) List of Application Form;
    3. 2) Copy of Articles of Association of the foreign company represented and any amendment(s) in English or its translations in Bahasa from sworn translator;
    4. 3) Letter of appointment from the foreign company represented to whom which will be proposed as a Representative Executive and must be legalized by Embassy of the Republic of Indonesia in the country of origin;
    5. 4) Letter of statement and must be legalized by Embassy of the Republic of Indonesia in the country of origin;
    6. 5) Letter of Intent and must be legalized by Embassy of the Republic of Indonesia in the country of origin;
    7. 6) Letter of Reference and must be legalized by Embassy of the Republic of Indonesia in the country of origin;
    8. 7) Power of Attorney to manage and sign the application if the management of the foreign company represented by another party.
    9. 8) Photocopy of passport of company director to be represented;
    10. 9) Photocopy of valid passport (for foreigner) or photocopy of identity card number (for Indonesian citizens) to be presented as Executive Representative;
    11. 10) 2 sheets 4×6 photo.
• b. Subsequently, the KPPA Permit shall be issued in the form of a Permit signed by the Head of BKPM or a designated official at the latest within 5 (five) working days of receipt of a complete and correct application with a copy to:
  • 1. 1) Minister of Finance;
    2. 2) Minister of Trade;
    3. 3) Minister of Manpower and Transmigration;
    4. 4) Head of Indonesian Representative in the country or origin of foreign company;
    5. 5) Governor/Regent/Major.
• c. After the approval permit is obtained, the Company must report to PTSP-PDPPM immediately to get direction and guidance in completing the licensing area, no later than 3 (three) months since the issuance of the Letter of Approval. The licensing areas include:
  • 1. 1) Certificate of Domicile of the Company;
    2. 2) Tax Payer Registration Number;
    3. 3) Taxable Confirmation Letter;
    4. 4) Company Registration Certificate;
    5. 5) And other required Licensing.

Indo-Ned Consultancy will help you to set up Representative Office (KPPA) in Indonesia. We have helped our clients to set up Representative Office (KPPA), so we can help you to set up your business in Indonesia faster and legally. Contact us for free consultation.

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