If you are planning to incorporate a company in Indonesia, understanding the market and local culture while testing the demand for your business is important for business success. As such, many foreigners have adopted to set up a representative office in Indonesia as a key first step towards incorporation of a foreign-owned company (PT PMA).
Representative offices are typically established to help you gain a better understanding of the Indonesian market, become more familiar with potential clients in Indonesia, locate suitable distributors and commercial partners, and advertise the products or services offered.
Types of Representative Offices in Indonesia
There are a total of four different types of representative office which exist in Indonesia.
KPPAs
KPPA is a general representative office of a foreign company incorporated without the need to make a significant capital investment.
An application must be submitted to the Indonesian Investment Coordinating Board (BKPM). A director or management of the associated overseas company must submit such an application. It is also feasible to hire a lawyer to help you with this. KPPAs will be housed in provincial capital city office buildings with a license that has a three-year validity period which can be extended indefinitely.
KP3As
KP3AS are established to promote products of their affiliated foreign companies in Indonesia, however they are not allowed to engage in any form of trading and sales activities. A KP3AS can be opened anywhere in Indonesia, the license needed consist of 3 variations of SIUP3A:
*Unless specified otherwise
BUJKAs
Only foreign construction businesses with a B or B2 business certification are permitted to establish BUJKAs. In Indonesia, BUJKAs are permitted to carry out specific construction projects. You can only do so if you are working with a local construction company (BUJK). BUJKAs can also undertake market research and communicate with other businesses and organisations.
Other responsibilities that a BUJKA may accomplish include the procurement of building services and the hiring of staff members for office administration. The Ministry of Public Works must receive all essential petitions and papers pertaining to the establishment of a BUJKA.
KPPA MIGAS
Any international oil or gas business can establish a KPPA MIGAS. It will serve as the company’s permanent base of operations in Indonesia. A KPPA MIGAS and a KPPA have some characteristics.
One of these parallels is regulation: a KPPA MIGAS is regulated in the same way as a KPPA is regulated. A recommendation letter from the Ministry of Oil and Gas is required before establishing a KPPA MIGAS.
The BKPM will accept applications to establish a KPPA MIGAS. The permit for a KPPA MIGAS is valid for three years and can be renewed if necessary. A KPPA MIGAS does not have to be installed in any specific location.
Required Documents for the Setup of a Representative Office
Before you set up a representative office in Indonesia, certain documents must already have been prepared. These documents include:
Company Documents
Chief Representative Officer Documents
NOTE: Edited photos are not accepted!
*Unless specified otherwise
Alternative Business Entities for Incorporation in Indonesia
Beyond representative offices in Indonesia, there are different types of business entities that you can incorporate, especially if you would like to gain revenue from your operations. The most common types of companies include a local PT company and a PT PMA c
1. Local PT Company
A local PT (Perseroan Terbatas) company is also known as a limited liability company. Only local entrepreneurs and investors are allowed to incorporate this entity. There are 3 categories under a local PT company:
2. PT PMA Company
PT PMA (Penanaman Modal Asing) company is wholly or partially owned limited liability company and is governed by the Foreign Capital Investment Law. This means that foreign investors may not be eligible to incorporate a company in selected sectors under the Positive Investment List.
Incorporating a company in Indonesia can be difficult if you do not understand their local language. Reach out to us for reliable incorporation services so you can scale your business to success.
FAQs
Sebagian besar perusahaan di Indonesia dikenakan pajak sebesar 25%. Namun, perusahaan yang memiliki setidaknya 40% sahamnya tersedia untuk publik dan tercatat di Bursa Efek Indonesia dikenakan pajak sebesar 20%.
Pemerintah Indonesia telah mengambil langkah-langkah untuk menurunkan tingkat pengangguran yang ada di negara ini. Untuk alasan ini, pembatasan tertentu pada pekerja asing telah diberlakukan. Salah satu pembatasan tersebut berkaitan dengan pekerja asing di kantor perwakilan.
Kantor Perwakilan (RO) pada dasarnya adalah kantor administrasi sementara yang didirikan sebagai penghubung untuk mengoordinasikan dan mengelola kegiatan non-komersial, untuk perusahaan asing. RO tidak memiliki status hukum dan bukan merupakan badan hukum yang terpisah dari perusahaan induknya
KITAS adalah izin yang memungkinkan pemegangnya untuk tinggal di Indonesia untuk waktu yang lama. Orang asing yang berencana bekerja di Indonesia akan memerlukan KITAS. Ada empat jenis KITAS yang ada di Indonesia: KITAS yang disponsori oleh entitas Indonesia, KITAS yang disponsori oleh pasangan Indonesia, KITAS pensiun, dan KITAS tanggungan. Jenis yang dibutuhkan akan tergantung pada kebutuhan dan status pemohon.