KPPA Migas

Types of Representative Offices in Indonesia

To simplify the investments for foreigners in Indonesia, the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal “BKPM”) has just announced the implementation of two new groups of regulations on investments. One of the rules related to Regulation No. 13/2017 on The Guidelines and Procedure for Capital Investment Licensing and Facilities is the changes in the division of representative office in Indonesia.

Types of Representative Offices in Indonesia in 2018

Previously, the main types of Representative Office in Indonesia were:

1. General Representative Office of a Foreign Company (KPPA).
2. Representative Office of a Foreign Trading Company (KP3A).
3. Representative Office of a Foreign Construction Service Company (BUJKA).
4. Representative Office of a Foreign Bank and Finance.

With the newly added member, the four types of Representative Office in Indonesia currently available are:

1. General Representative Office of a Foreign Company (KPPA).
2. Representative Office of a Foreign Trading Company (KP3A).
3. Representative Office of a Foreign Construction Service Company (BUJKA).
4. Representative Office of a Foreign Oil and Gas Company (KPPA MIGAS).

Representative Office of a Foreign Oil and Gas Company (KPPA MIGAS)

This representative office is added to the BKPM Regulation and was previously not regulated by BKPM. Companies which are active in the business field of oil and gas may now open a KPPA MIGAS representative office.

There are no exact restrictions of a KPPA MIGAS, however, it is of the general consensus that KPPA MIGAS is regulated in the same way as KPPA.

Foreign companies with their field in oil and gas can now establish a KPPA MIGAS in Indonesia. It was not regulated by BKPM previously and the permit is also 3 years which can be extended.

Representative Offices in Indonesia in a Nutshell

Advantages

1. 100% foreign ownership is allowed.
2. Minimum expenses, no investment required.
3. Shareholders and directors are not necessary.
4. Fast incorporation and set up.
5. Establish the market presence in Indonesia very inexpensively.
6. Full compliance with law and regulations in Indonesia.
7. Able to apply limited stay permits (KITAS) for its foreign executives.

Disadvantages

1. Restricted sales and business activities.
2. Limited supervisory or marketing activities.
3. Foreign worker sponsor is limited (for each expat to work at your representative office in Indonesia, you will need three local Indonesian employees).

Procedure of Application

Here’s a brief guideline of the steps you need to take to establish different representative offices in Indonesia:

KPPA/KPPA MIGAS

1. Request letter of approval from BKPM  for KPPA license.
2. Receive a domicile letter from the local sub-district.
3. Attorney to sign the application.
4. Tax ID registration(NPWP).
5. The company registry (TDP).

Disclaimer:

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.