A representative office in Indonesia is a structure that is utilised by foreign businesses for the purpose of engaging in the market surveillance, networking, exploring business opportunities or providing other managerial support in Indonesia to the parent company abroad.
Indonesia is a profitable market for foreign investors due to the country’s huge population, low minimum wages and abundance of natural resources. A representative office allows foreign investors who are new to the country and wish to explore business opportunities in Indonesia. It allows you to see if the country is the right place to start your business and to stay on. Representative office shall be led by one or more Indonesian or foreign citizen that considered being representative office executives. The appointment of representative office executives shall be based on the letter of appointment from the foreign company or groups of foreign companies.
Activities of foreign representative offices are limited to its role as supervisor, connector, coordinator, and to management of the interest of the company or affiliated companies in Indonesia /or an overseas.
It cannot be looking for earnings from Indonesian resources, that includes not conducting activity or making a contract/sale and purchase of goods or services with domestic companies or personal.
A representative office cannot participate in any other forms of the management of a company, subsidiary company or branch company that located in Indonesia.
Referring to the rules and regulations concerning the operations of a representative office in Indonesia as stipulated in the framework of the Decree of the Head of BKPM No. 6 of 2018, to establish a foreign representative office, the parent company shall obtain a Letter of Approval issued by the Investment Coordinating Board (BKPM) as main license. Moreover, a representative office shall obtain a Tax Payer Registration Number (NPWP) from the Tax Office and a Business Identification Number or Nomor Induk Berusaha (NIB) from the Online Single Submission (OSS).
The obtaining Letter of Approval issued by BKPM normally takes approximately 10 working days.
Puji Gulo, Business development executive
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