Description
Setting up a General Representative Office (KPPA):
There are three (3) types of representative office in Indonesia based on Article 21 Regulation of Head of Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM) Number 15 of 2015 Concerning Guideline and Procedure for Licensing and Non-Licensing Investment (“BKPM Regulation No.15/2015”) as follows:
- Representative Office of Foreign Company (KPPA);
- Representative Office of Foreign Trade Company (KP3A); and
- Representative Office of Foreign Construction Services Enterprises (BUJKA).
A general foreign representative office is also called a Kantor Perwakilan Perusahaan Asing or KPPA in Bahasa Indonesia. They’re usually created for you to have a market presence with no capital requirements, before starting a business in Indonesia with a PT PMA.
As a representative office, keep in mind that you can’t generate local revenue or issue invoices. According to the Indonesian Investment Coordinating Board, a KPPA is a local branch of a foreign parent company has two main responsibilities:
- Representing the parent company’s interests in Indonesia, and/or
- Preparing the founding of a Foreign Investment Company (PT PMA).
Contrary to the foreign-owned company (PT PMA), which is subject to the Negative Investment List, foreign investors can set up a representative office in most sectors or industries in Indonesia.
This means that any business entity can open a representative office in Indonesia and makes it perfect for foreign investors who want to evaluate the market or communicate with Indonesian stakeholders.
