Indonesia

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 any revenue in Indonesia. All of the funding for the offices comes from the parent company abroad.

KPPA can only be located in a commercial high-rise building in the capital of an Indonesian Province.

KPPA’s license will be given for 3 years and it can be extended as per Letter of Appointment.

Representative office for foreign construction companies (BUJKA)

A BUJKA is suitable for foreign construction companies who are planning to expand their activities to Indonesia. Through a BUJKA, you can:

  • Contact people, companies, and government institutions and also collect information regarding available construction projects all over Indonesia
  • Participate in tenders
  • Hire foreign experts and Indonesian staff to support your operation
  • Open a bank account in Indonesia

To deliver construction services, a BUJKA needs to set up a joint venture with a 100% Indonesian-owned construction services company (BUJK).

The location of a BUJKA is not specified by the law.

BUJKA license is valid for 3 years and it is extendable.

Representative office for foreign trading companies (K3PA)

A K3PA is a suitable option if the parent company is a manufacturer of a product owner with a plan to establish a network of agents and distributors in Indonesia.

K3PA is not allowed to earn any revenue nor engage in activities related to sales, participate in tenders, sign contracts, etc.

A K3PA can be located in the capital of either a province or a regency/city all over Indonesia.

The temporary K3PA license is valid for 2 months, the permanent license for 1 year. It is also possible to extend the license and the extended license will be valid as per Letter of Appointment.

Representative office for foreign oil and gas companies (KPPA Migas)

KPPA Migas is a representative office for foreign oil and gas companies who wish to have a permanent establishment in Indonesia.

To establish a KPPA Migas, you first need a recommendation letter from the Ministry of Oil and Gas.

The location of a KPPA Migas is not specifically regulated by the law.

KPPA Migas license is valid for 3 years and can be extended afterward.

Frequently asked questions

Can a representative office 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 a representative office in any city in Indonesia?

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

Representative office of a foreign trade company (K3PA) can be opened in any capital of either a province or a regency/city all over Indonesia.

Locations of a representative office of a foreign construction company (BUJKA) or a foreign oil and gas company (KPPA Migas) are not specified by the law.

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 the local tax office. Since the 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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