Representative Office (KPPA)

Foreign investor could setup a Representative Office to study the market for a maximum period of 5 years. Foreign Representative Office is an office incorporated by an overseas company to represent itself in Indonesia with a view to manage the interest of the company or the affiliated companies in Indonesia and/ or in other countries and/ or to prepare the establishment and development of foreign investment companies in Indonesia.

Foreign Representative Office usually has limited functionality and generally are prohibited from directly engaging in operational activities, signing contracts, issuing official invoices, receiving payments from its clients, and directly engaging in any other profit generating activities.

The requirements and procedure to form a representative office in Indonesia is governed by the Regulation of The Chairman of BKPM No. 15 of 2015 Regarding Guidelines and Procedures for Licensing and Non-Licensing Investment.

Types of Representative Offices

1. Foreign Company Representative Office (Kantor Perwakilan Perusahaan Asing or KPPA).

The functionality of KPPA is limited to:

• Manage the parent company’s corporate interests.
• Prepare the establishment and development of its business in Indonesia.

Important Notes for KPPA:

• KPPA can only be incorporated in capital of Indonesian provinces (e.g. Jakarta, Bandung, Yogyakarta, Kalimantan, etc.).
• The location of KPPA must be in office building.
• KPPA permit is valid for 3 years and can be extended 2 times for 1 year each.
• After 5 years KPPA may be granted extension for different activities than before.
• KPPA must be incorporated in an office building or tower.
• In case Representative Executive is foreigner, he/ she must obtain Temporary Stay Permit Card (Kartu Izin Tinggal Terbatas or KITAS) and Work Permit to stay and work in Indonesia.

2. Foreign Company Trade Representative Office (Kantor Perwakilan Perusahaan Perdagangan Asing or KP3A).

The functionality of KP3A is limited to:

• Introduce, promote and market the goods produced by a parent company, as well as providing information, or directions for use and importation of goods to companies or users in Indonesia.
• Conduct market research and surveillance in Indonesia for domestic sales of goods produced by parent company.
• Conduct market research on the items required by parent companies abroad (who appointed the company in Indonesia) as well as providing information about the terms of the export of goods to companies in Indonesia.
• Closing contracts for and on behalf of the company that is appointed by the parent company in Indonesia for export of goods.

In order to perform the trading related activities in KP3A, a Foreign Company Trade Representative License (Surat Izin Usaha Perwakilan Perusahaan Perdagangan Asing or SIUP3A) must be obtained from BKPM OSS-C.

Important Notes for KP3A:

• KP3A is prohibited to carry out any trading activities and sales transactions such as submitting tenders, signing contracts, settling claims, etc.
• KP3A can be incorporated in capital of provinces, districts and cities in Indonesia.\
• KP3A must be incorporated in an office building or tower.
• In case Representative Executive is foreigner, he/ she must obtain Temporary Stay Permit Card (KITAS) and Work Permit to stay and work in Indonesia.

Learn more about Foreign Trade Representative Office (KP3A)

3. Foreign Company Construction Representative Office (Kantor Perwakilan Badan Usaha Jasa Konstruksi or BJUK).

License can be obtained by a Foreign Construction company with large scale qualification as stipulated in the Ministerial Regulation. BJUK License can be used to undertake construction service business activities throughout the territory of Indonesia. BJUK License is valid for 3 years and can be extended.

Learn more about Foreign Construction Company (BUJKA)

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.