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Representative Office Registration (KPPA)
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Setting up a Representative Office (RO) in Indonesia can be a practical way for foreign companies to explore business opportunities and establish a presence without fully committing to establishing companies that generate income in Indonesia.
While the actual business transactions and revenue generation remain the responsibility of the parent company abroad. a representative office allows to supervise and coordinate business or do market research without the risk of large investments. This may be an ideal option for businesses that are exploring business opportunities in the Indonesian market.
What a Representative Office in Indonesia Can Do
- Conduct market research
- Promote the parent company’s products or services
- Provide liaison and support services to the parent company
- Prepare for the establishment of a foreign investment firm in Indonesia
- Act as a coordinator, supervisor, or connector for the parent company
- Ensure regulatory compliance
What a Representative Office in Indonesia Cannot Do
- Engage in any commercial activities or generate revenue
- Sell goods or services to Indonesian customers
- Execute agreements or contracts on behalf of the parent company
- Issue invoices or participate in the management of a parent company’s branch or subsidiary
- Apply for an import license
- Participate in any form of management of a subsidiary or branch office in Indonesia
- Import or export goods
Types of Representative Offices of Foreign Companies
Foreign investors looking to establish an initial presence in Indonesia without immediately forming a limited liability company (PT PMA) may opt to open a representative office. This setup provides a low-risk entry point for observing market potential, managing relationships, and preparing for future Indonesian investment. There are several types of foreign representative offices (Kantor Perwakilan) recognized by the Indonesian government, each tailored to specific business activities and sectors.
Here are the main types of representative office in Indonesia for foreign companies:
KPPA – Foreign Company Representative Office
The KPPA (Kantor Perwakilan Perusahaan Asing) is the most commonly established foreign representative office in Indonesia. It allows foreign parent companies to conduct non-commercial activities, including:
- Liaising with headquarters overseas
- Conducting market research and feasibility studies
- Coordinating promotional activities
- Supervising subsidiaries or local affiliates in Indonesia
A KPPA cannot generate revenue, sign contracts, or conduct direct sales in Indonesia. Its primary purpose is to act as a strategic liaison and support unit. While it offers no direct income channel, it provides valuable insight and infrastructure for foreign businesses planning long-term entry.
KP3A – Representative Office for Foreign Trade Company
Foreign trading companies can open a representative office under the KP3A (Kantor Perwakilan Perusahaan Perdagangan Asing) structure. This type of office focuses on trade promotion and supports the parent company by:
- Acting as a liaison for buying and selling agents
- Representing company interests in the Indonesian market
- Organizing trade exhibitions, networking events, and promotional campaigns
While KP3A offices are prohibited from conducting direct transactions or handling import/export themselves, they help build commercial visibility and partnerships within Indonesia.
Setting up a Representative Office (RO) in Indonesia can be a practical way for foreign companies to explore business opportunities and establish a presence without fully committing to establishing companies that generate income in Indonesia.
While the actual business transactions and revenue generation remain the responsibility of the parent company abroad. a representative office allows to supervise and coordinate business or do market research without the risk of large investments. This may be an ideal option for businesses that are exploring business opportunities in the Indonesian market.
BUJKA – Representative Office for Foreign Construction Services
Foreign companies in the construction sector may establish a BUJKA (Badan Usaha Jasa Konstruksi Asing) to participate in major infrastructure and engineering projects in Indonesia. These offices:
- Operate through partnerships with local construction firms
- Must be registered with the Ministry of Public Works
- Are required to meet technical, legal, and capital thresholds
The BUJKA structure allows qualified foreign investors to gain access to Indonesia’s booming construction and infrastructure landscape.
KPPA Migas – Representative Office for Oil & Gas Sector
A specialized version of KPPA, KPPA Migas is designed for foreign companies in the oil and gas industry. These offices:
- Serve as a bridge between foreign companies and Indonesian government bodies
- Assist in both upstream and downstream oil and gas operations
- Must comply with strict sector-specific regulations
KPPA Migas offices are essential for managing strategic communications and partnerships in Indonesia’s regulated energy environment.
Foreign companies in the construction sector may establish a BUJKA (Badan Usaha Jasa Konstruksi Asing) to participate in major infrastructure and engineering projects in Indonesia. These offices:
- Operate through partnerships with local construction firms
- Must be registered with the Ministry of Public Works
- Are required to meet technical, legal, and capital thresholds
The BUJKA structure allows qualified foreign investors to gain access to Indonesia’s booming construction and infrastructure landscape.
What are the main benefits of setting up a Representative Office in Indonesia?
Setting up a Representative Office (RO) in Indonesia can be a practical way for foreign companies to explore business opportunities and establish a presence without fully committing to establishing companies that generate income in Indonesia.
While the actual business transactions and revenue generation remain the responsibility of the parent company abroad. a representative office allows to supervise and coordinate business or do market research without the risk of large investments. This may be an ideal option for businesses that are exploring business opportunities in the Indonesian market.
What are the main benefits of setting up a Representative Office in Indonesia?
- A representative office in Jakarta is a cost-effective solution for foreign companies exploring business opportunities in
- Indonesia. It allows business entities to establish a presence in the country without setting up a legal entity.
- There is no need for large investments or paid up capital
- There is significantly less paperwork as you will only need to report income tax for the employees as well as office space tax
Document Requirements to Setup a KPPA Rep Office in Indonesia
- Business license of foreign parent company
- Articles of Association of the foreign parent company, including 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 beside the activity of the Representative Office
- Reference Letter from Indonesian Embassy Representative in the principal country
- Representative Business Plan
- Lease Agreement of Office in Indonesia
- Other required document
Set Up a Representative Office for a Foreign Company in Indonesia with LMI Consultancy
- Consult your inquiry with our professional consultant
- Submit necessary document
- Proceed with the payment
- Application process
- Receive the complete document
Other Popular Company Registration Services in Indonesia
Setup a Business in Indonesia with LMI Consultancy
Established in 2016, LMI Consultancy has been supporting countless individuals in understanding the intricacies of visas, business setup, tax & accounting, and property investment in Indonesia, providing a comprehensive and dependable service.
We take pride in being an ethical and innovative company that places a strong emphasis on exceptional customer service and strives to set a new standard in our industry, guaranteeing a smooth and encouraging experience for our clients.
FAQ
What's the minimum initial capital investment that PT PMA shareholders need to contribute?
Specifically, shareholders need to provide a capital of IDR 10 billion (about USD 660,000). This plan outlines how the company will allocate its capital and resources for its operational activities.
Who can represent the ownership of the foreign investment company?
Determining ownership representation in Indonesian foreign investment companies is complex, varying based on specific regulations. Although some nominee arrangements offer flexibility, restrictions apply, particularly to sectors on the Negative Investment List. To properly address this, you should seek advice from legal and business professionals with Indonesian law expertise.
Do Indonesian PTs, PT PMAs, and other business types face the same tax requirements?
No, the tax burden isn’t uniform across all business types in Indonesia. The tax responsibilities of PT PMAs and PTs include corporate income tax, withholding tax, and VAT, additionally include LKPM for PT PMA. Meanwhile, the Representative office only files withholding tax and LKPM report.
Disclaimer : Our services in LMI Consultancy provide consulting services focused on ensuring client compliance with applicable immigration and legal regulations in Indonesia. We do not provide or facilitate the production of official government documents, nor do we offer any expedited or preferential access to government services.
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