Setting Up Representative Office in Indonesia (Kantor Perwakilan Perusahaan Asing/KPPA)

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Setting Up Representative Office in Indonesia (Kantor Perwakilan Perusahaan Asing/KPPA)

30 September 2019

Setting Up Representative Office (Kantor Perwakilan Perusahaan Asing/ KPPA)

If you are looking to establish business in Indonesia, then Representative Office will be an ideal entity for you. Rep Office is established for those who wishes to conduct market research and coordinate business. A Rep Office is not allowed to make business transaction or generate income. However, it is allowed to obtain work permits for expatriates and Multiple Business Visa for personal.

Regulations:

  • BKPM Regulation No. 5/2013
  • BKPM Regulation 22/SK/2001

Obligations:

  • Report income tax for employees and office space tax. It is a taxable entity. When reporting tax, the income should be zero.
  • For each foreign employee hired, there has to be at least 3 Indonesian employees. In case you do not want to hire any expats, you need to hire at least 3 Indonesian nationals.

 

Restrictions:

Rep Offices are not allowed to:

  • generate income
  • conduct business transaction
  • participate in the management of a company, subsidiary of branch office

 

How to establish Rep Office

Required Documents

  • A Letter of Appointment from the foreign parent company
  • Articles of Association of the foreign parent company including amendment(s) in English, or the Indonesian translation from sworn translator.
  • Copy of registration at Chamber of Commerce of parent company
  • Power of Attorney to sign the application if being represented by other party than the Representative Executive
  • Copy of a valid passport (for foreigners), or copy of identification card number and tax number/NPWP (for Indonesian nationals) who will be proposed as Representative Executive
  • Letter of Statement stating that the Representative Executive is willing to stay in Indonesia and will not do other business in Indonesia

The Letter of Appointment (LOA), Letter of Intent (LOI), Letter of Statement (LOS), Power of Attorney (POA), copy of registration at Chamber of Commerce, and Articles of Association (including amendments) need to be legalized by a Public Notary and the Indonesian Embassy in the country of the foreign parent company.

The steps to be conducted:           

  • Request BKPM Letter of Approval
  • Letter of Domicile of the representative office
  • Power of Attorney to sign the application if being represented by another party
  • Tax identification number (NPWP)
  • TDP/Company registration certificate

The license for Rep Office is 3 years, and can be extended twice for one year each. That makes the maximum license of 5 years. After 5 years the foreign company may establish a company or exit Indonesia, unless the Rep Office intends to do different activities.

Rep Office can only be established in the capital of Indonesian provinces and in an office building.

Epsilon Delta can assist you on the followings :

  • Setting up the representative office in accordance with the laws and regulations: assist the process in BKPM or other government agencies, including the required documents.
  • Assist finding an office space in Jakarta
  • Assist making the employment contracts between you and the Indonesian staffs
  • Arranging the immigration process for your expat workers and/or Rep Office Head