This guide will provide an outline on the business addresses and virtual offices in Indonesia.
It is a requirement that all companies in Indonesia must have a business address to be able to operate and set up a company legally.
Let’s take a look at the differences and other factors concerning the business address and virtual office.
Registered business address in Indonesia
Businesses in Indonesia are required to have a registered business address, but the business address does not necessarily have to be the place where business operations are conducted.
The purpose of having a registered business address is to:
- Open a corporate bank account
- Receive follow-ups on compliance issues
- Receive formal communications
- List the business on the internet
- Receive bills, payments or invoices
- Register a domain for the company’s website
- Register permits and licenses required for the company
Businesses are not allowed to register their residential address as the business address. However, in the case that the local community members approve of the company to conduct its business activities, which must be in written form, the company can use a residential address.
Changing your company’s business address
There are two options when you want to change your business address in Indonesia, which are:
- Changing the address within the same district
- Changing the address to another district
If you are planning to change the address within the same district, you will need to submit a new domicile letter.
Changing the address to another district requires you to close the local tax account and apply for a new one.
The processing time depends on whether you are changing the address within the same district or a different district. Staying in the same district takes about one month to revise the documents. Moving to a new district can take up to around two months.
You must also revise every document that contains the business address. Some of the documents are:
- The domicile letter (SKDP)
- Articles of association
- Stakeholder structure (commissioners, directors and shareholders)
- Company’s capital
- The Investment Coordinating Board (BKPM) licenses for foreign-owned companies (PT PMA)
- Company registration certificate
- Documents of tax identification, such as tax identification number (NPWP), tax registration certificate (SKT) and taxable entrepreneur (PKP)
- Business licenses and permits related to your business activities
Virtual offices in Indonesia
A virtual office in Indonesia allows you to register office buildings as your business address, but you can still conduct business activities somewhere else.
Virtual offices may be worrisome for the government as it is more difficult to monitor the activities of companies that use virtual offices, whether they are real businesses with legal activities or not.
A lot of virtual office owners also do not have business licenses, as a result, the Jakarta government has issued policies that companies must meet in order to be able to use a virtual office in Jakarta.
The criteria are:
- The company must have legal documents, such as business licenses that mention the correct location of the office and the business activities.
- The office can be situated in a residential house, virtual office or co-working space on condition that the location does not:
- Change the main function of the residential house
- Use sidewalks
- Cause any pollution and disturbs the neighbourhood
- Use automatic machinery in the production process
- The company must submit the following documents:
- Identification card of the director or company owners
- Family card
- Individual tax card (NPWP)
- Bank account or recommendation letter from the bank
- The company must state the addresses of both the virtual office and the address of the location where business activities are conducted.
- The validity of the company’s business licenses is one year and can be extended based on the current regulations.
Types of companies that must use physical offices
Companies that are required to use a physical office include:
- E-commerce companies – need a physical office to ensure accountability to customers and reduce the risk of fraud.
- Construction companies – needs operating permits that they cannot get if they use a virtual office.
- Tourism businesses – require special permits that can be obtained after a physical office survey by the Ministry of Tourism.
- Transport companies – need a physical office because they are responsible for moving other people’s property and their customers can refer to the physical office.
- Property developers – are involved in moving large amounts of money, so they need a physical office to ensure accountability.
- Event organisers – having a physical office makes coordinating with stakeholders more convenient.
Types of companies that can use virtual office
The types of companies that can use virtual offices includes, but not limited to:
- Trading company
- IT companies
- Accounting companies
- Consultant businesses
Having an address for doing business in Indonesia is important as it is where all formal documents and communications will be sent to, and it also increases credibility for your company. You will also need addresses to be able to register for certain permits or tax certificates.
We recommend working with Acclime to ensure the process of getting business addresses and virtual offices in Indonesia is properly handled.
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