Indonesian laws and regulations allow foreign companies to open foreign representative offices in order to do market research, promote the products of the applying foreign company, or find business partners in Indonesia.
There are a few types of Representative Office, with the most common being a KPPA (Kantor Perwakilan Perusahaan Asing) or General Representative Office.
There are several limitations surrounding the operation of a KPPA that must be considered as being suitable for your company’s requirements, with the most restrictive limitation in that it cannot earn revenue through the sale of goods and services.
For this reason, a KPPA is most often used as a beachhead office designed for market research, acquiring business partners and then setting up a Foreign Investment Company once the business has decided to go ahead and form a company that may engage in the full range of commercial activities, including earning revenue.
This KPPA is limited to employing only 2 foreign workers, being the Chief of the Foreign Representative Office and one Assistant to the CRO.
The Chief of the KPPA must reside in Indonesia, take full responsibility for the smooth running of the KPPA, is not allowed to conduct business activities outside the KPPA and does not hold concurrent positions in more than 1 KPPA.
- KPPA is only limited to being a supervisor, liaison, coordinator, and manager of the interests of the company or its affiliated companies.
- KPPA is limited only to preparing for the establishment and business development of Foreign Investment Companies in Indonesia.
- KPPA is only limited to being located in specific districts (and in some cases specific office buildings) in provincial capitals. In other words, KPPA may not operate in a city that is not the provincial capital.
- A KPPA cannot earn income from Indonesian sources, including not being allowed to carry out activities or any engagement/transaction of sale and purchase of commercial goods or services with domestic companies or individuals.
- KPPA does not participate in any form in the management of any company, subsidiary or branch of a company in Indonesia.
What is required to open a Foreign Representative Office?
- Business license of foreign parent company
- Articles of Association of the foreign parent company, including any amendment(s) in English
- Letter of Appointment from the foreign parent company
- Letter of Intent – signed by the Director with the company stamp
- Letter of Statement – signed by the Chief Representative, mentioning the willingness to live in Indonesia and will not conduct other works/business besides the activity of the Representative Office
- Power of Attorney to sign the application if being represented by another party
- Copy of Registration at Chamber of Commerce of foreign parent company
Note: For numbers 2 – 7 need to be legalized by a Public Notary and the Indonesian Embassy in the country of the foreign parent company.
- Reference Letter from Indonesian Embassy Representative in the principal country
- Representative Business Plan
- Copy of valid passport (of foreign national); or a copy of ID Card and NPWP (of Indonesian national) who will be proposed as the Representative Office Head
- Letterhead from Parent Company
- Curriculum Vitae, Degree Certificate, and a photo of the Chief of Representative Office (CRO)
- Lease Agreement of Office in Indonesia
- Scan Copy Tax Land Building and its payment (Pajak Bumi Bangunan/PBB)
- Photo of the Office
What do we provide?
- The license of Representative Office by BKPM (OSS)
- Taxpayer Registration Number (NPWP)
- Company registration number or NIB (OSS)
A KPPA Representative Office is valid for as long as necessary until it is disestablished.
How much does Foreign Representative Office cost?
The cost is IDR 18 million (approx. USD $1,200)