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Representative office Indonesia

Have a legal presence in Indonesia without setting up a company

Representative office is the local representative of a foreign company in Indonesia. It is not allowed to earn revenue in Indonesia but it can hire people and doesn't need to comply with capital and foreign ownership regulations.

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Types of representative offices in Indonesia

General representative office (KPPA)

General representative office is an office managed by the chief representative officer. Objectives of such office can be:

The key limitation of a KPPA is that it is not allowed to earn revenue in Indonesia. All of the funding of the offices comes from the parent company abroad.

KPPA license will be given for 3 years and it can be extended twice for one more year (effectively 5 years in total).

KPPA can only be located in the capital city of a province in an office building.

Representative office of Foreign Trading Company (K3PA)

The objective of the Representative office of Foreign Trading Company is to introduce the parent company’s products and manufacturing process in Indonesia, coordinate with local distributors or manufacturers etc.

K3PA is not allowed to earn revenue nor any activites related to sales, participation in tenders, sign contracts etc.

In order to qualify for K3PA the parent company must be a principal not an agent.

K3PA license is given for 3 years and it can be extended perpetually.

Unlike general representative office, K3PA can be opened anywhere in Indonesia.

Frequently asked questions

Can Representative have an import license, owning a land or other property?

No, it cannot. For those purposes you would have to set up a limited liability company (PT PMA).

Can I have representative office in any city in Indonesia?

General representative office (KPPA) can only have office in the capital of the province and in a commercial building. Most general representative offices are in Jakarta or Surabaya.

Representative office of foreign trade company (K3PA) can be opened anywhere in Indonesia.

Who can be the Chief Representative Officer?

Chief representative officer (CRO) can be of any nationality. The requirement is that the CRO needs to be appointed by the director of the parent company and two of them cannot be the same person.

In case the CRO is a foreign national, he/she needs to rent an apartment or house and acquire personal domicile letter from the landlord.

For KP3A, the CRO needs to get a residence permit (KITAS) before applying for permanent license.

What kind of taxes does the representative office have to pay?

Withholding tax which needs to be reported every month to local tax office. Since representative office is not earning revenue, there won’t be any income tax reporting.

How long the parent company needs to be incorporated in order to qualify for a representative office?

There is no requirement as long as the company has articles of association.

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