Why use a virtual office?

All companies in Indonesia must have a business address in a building that allows commercial activities. There are many advantages to using virtual office address such as:

• ◉ Lower overhead costs. The fees to use a virtual office address costs less than renting out a commercial space. If your business does not need a physical location to operate, a virtual office is the better option for you.
• ◉ Enter the Indonesian market faster. Finding an appropriate commercial space from abroad is time-consuming and difficult. Expand to Indonesia faster by registering your business using a virtual office address.

Virtual office in Jakarta with Emerhub

Emerhub offers a simple and cost-effective solution to get a business address that meets legal requirements in Indonesia. With our virtual address service, you can register your business using an address that has all the necessary permits in Jakarta.

Enter the Indonesia market faster with our virtual office services. We can complete your company registration in Indonesia in as little as 4 days when you use our address.

You won’t need to use any of your time and resources trying to find an office that meets legal requirements because our virtual office address has the necessary building permits.

By using our virtual office services, you can keep your overhead costs low even if your company is not fully remote. We can provide desks for your on-site staff in our office.

Start your business in Indonesia with Emerhub’s virtual office service.

Requirements and Prerequisites for BUJKA

Only foreign “large-scale” construction companies may open a BUJKA. The process to open a BUJKA starts with applying for a preliminary permit by obtaining the following sublicenses:

• ◉ Membership of Indonesian Contractors Association (Kartu Tanda Anggota/KTA)
• ◉ Certificate of Expertise (Sertifikat Keahlian /SKA)
• ◉ Certificate of Business in Constructions (Sertifikat Badan Usaha/SBU)

After getting the preliminary permit, the parent company can proceed with setting up the BUJKA by preparing the following:

• ◉ BUJKA license, obtained from the One Single Submission (OSS))
• ◉ Tax registration

The location of the office of a BUJKA is not specified by the law. You can open a BUJKA office anywhere as long as it is in a commercial building. There is also no set minimum capital requirement for a BUJKA.

Timeline to set up BUJKA

Setting up a BUJKA involves getting some documents together. The timeline in the table below shows how long it would take to establish a BUJKA with Emerhub.

Documents obtained	Timeline
Initial licenses of SBU, KTA, and SKA from Constructions association	1 month
Review of application and issuance of Government Levy to be paid	5 working days
Representative Office of Construction Company License/ BUJKA	3 working days
Tax registry	2 working days
TOTAL	1 month and 10 working days

Allowed activities for BUJKA

BUJKAs can conduct typical business activities like:

• ◉ Hire foreign experts
  • * A BUJKA can apply for work permits for its foreign employees
• ◉ Hire Indonesian staff
• ◉ Open a local bank account

BUJKAs can also perform construction-related activities including:

• ◉ Contact companies and institutions and collect information about available construction projects in Indonesia
• ◉ Participate in tenders.

The types of projects a BUJKA can work on must be complex, high-risk, and/or highly technical. Only local construction companies can work on smaller projects.

A BUJKA can work on construction projects if it has a local construction company (BUJK) as its partner. The construction company must be a limited liability company and 100% Indonesian-owned meaning it cannot have any foreign shareholders.

BUJKAs can participate in bidding even if they have not found a local partner for their prospective projects. Additionally, BUJKAs can partner up with different BUJKs for each project.

Business Activities for KP3A

KP3As can act as the parent company’s selling, manufacturing, and buying agent in Indonesia. The parent company may also delegate tasks related to establishing branch offices in Indonesian cities to its KP3A.

However, because representative offices cannot generate income in Indonesia or issue invoices, all transactions should be under the parent company’s name.

Opening a KP3A is a good choice for a company with plans to create a network of agents and distributors in Indonesia.

Requirements and Prerequisites to Open a KP3A

Requirements and Prerequisites to Open a KP3A

• ◉ The parent company must exist outside of Indonesia
• ◉ The main business activities of the parent company should involve trading
• ◉ The parent company must be the principal of products, not a broker
• ◉ There must be an appointed Chief Representative Officer (CRO)
  • * The appointed CRO can be an Indonesian national or a foreigner but must be a resident of the country.
  • * If the CRO is a foreigner, the KP3A can apply for his or her work permit after establishment.
• ◉ Its office must be in a commercial office building
  • * A KP3A can establish its office anywhere and does not need to be in a capital city.
• ◉ The parent company should also prepare the following documents:
  • * Letter of Appointment
  • * Letter of Intent
  • * Letter of Statement

Timeline to set up a KP3A in Indonesia

The process to open a representative office in Indonesia is quicker and simpler than opening a limited liability company. The table below shows how long it takes for Emerhub to acquire the documents necessary to establish a KP3A.

Documents obtained	Timeline in working days
KP3A license	1
Tax registry	3
TOTAL	4

Compliance for KP3A

KP3As cannot earn income but will still need to report withholding taxes on a monthly basis. The KP3A pays withholding tax on:

• ◉ Employee salaries
• ◉ Office rental fees
• ◉ Other administrative expenses.

The representative office must submit an activity report once a year to the Investment Coordinating Board (BKPM) of Indonesia. The activity report will be the basis for a license extension. 

KP3As with more than 10 employees must also have an Institution of Social Security for Manpower (BJPS) registration.

Key requirements for PT PMAs

Here are the key requirements for company registration in Indonesia:

• ◉ At least two shareholders.
• ◉ As long as even one share is owned by a foreign shareholder the company is considered a PT PMA.
• ◉ A registered address
• ◉ Many business classifications (KBLI) are in the Negative Investment List (DNI) which limits the maximum allowed foreign ownership. Classifications not in the negative list can be owned up to 100% by foreign shareholders.
• ◉ Minimum paid-up capital is Rp. 10 billion (~700,000 USD) which is committed with a capital statement letter.
• ◉ Some business activities require additional licenses and/or capital. For example, import or construction licenses.

Company registration timeline in Indonesia

Process	Timeline in working days
Approval of company name	1
Minute of the Deed of Establishment
Deed of Establishment	1
Ratification from MOLHR on Deed of Establishment
Tax card	1*-5
NIB and Commercial License/Operating License	1
Total	4-8 working days

*Getting the tax card within a day is possible if your company is registered using our virtual office service.

The above timeline applies to businesses registered in Jakarta. Registration usually takes longer in other places and would depend on the local government of that area. Please also note that the timeline may be longer for more complicated business classifications.

Corporate structure of a PT PMA company

All companies with foreign investments follow the regulations of large-sized companies in Indonesia. The key requirements for the corporate structure are the following:

• ◉ Minimum two shareholders.
• ◉ Both individual and corporate shareholders are allowed.
• ◉ PT PMA is governed by directors that are in charge of the daily operations of the company and that are supervised by the commissioners.
• ◉ At least one director needs to have the local tax card (NPWP) but does not have to be an Indonesian citizen.
• ◉ Directors and commissioners can also be shareholders of the company and are eligible to apply for the non-permanent residence permit (KITAS).

Regional differences for company registration

While most of the company registration processes are centralized, they also include approvals from the local municipality. This causes some differences in company registration timelines and requirements. Here are some common examples:

Some business functions KPPAs can do include:

• ◉ Open a local bank account
• ◉ Hire employees (both local and foreign)
  • * KPPAs can apply for work permits for foreign employees so they can work and stay in Indonesia legally.
• ◉ Conduct back office activities, for example:
  • * Accounting
  • * Data Entry
  • * Payroll management

Another reason for a company to open a representative office is to create business relationships and better understand a foreign market it wishes to enter. Opening a KPPA is a suitable option for companies who want to do market research or conduct feasibility studies in Indonesia.

Restrictions for KPPA

This type of legal entity may only conduct activities for the interest of its parent company or companies affiliated with the parent company. There are limits to the activities a KPPA can do.

KPPAs cannot:

• ◉ Conduct activities that generate income in Indonesia
• ◉ Cannot issue invoices
• ◉ Cannot own land or property

Should you wish to do any of the above activities, you will have to open a limited liability company with direct foreign investment (PT PMA).

Requirements and Prerequisites to Open a KPPA

There is no minimum capital requirement for KPPAs so the parent company can open one with any reasonable amount relevant to the planned business activities of the office. However, the parent company must meet the following prerequisites to set up a KPPA in Indonesia:

• ◉ The parent company must be a legal entity that exists outside of Indonesia
• ◉ The appointment of a Chief of Representative Office (CRO)
  • * The appointed CRO may be an Indonesian national or a foreigner as long as he or she is a resident of Indonesia.
  • * If the CRO is a foreigner, his or her KPA can apply for a work permit upon completion of the establishment of the representative office.
• ◉ A registered office address
  • * The KPPA must be in a dedicated commercial office address in the capital city of an Indonesian province.

Timeline to set up a KPPA in Indonesia

Setting up a KPPA is simpler and does not take as long as setting up a limited liability company. In the table below, you will see a list of the documents obtained in the process to set up the KPPA along with how long it takes for Emerhub to gather them.

Documents obtained	Timeline in working days
KPPA license	1
Tax registry	3
TOTAL	4