Malaysia Hotline: +603- 2141 8908
What is a representative office?
First of all, there are
two types of representative offices in Indonesia – a general representative
office (Kantor Perwakilan Perusahaan Asing – KPPA) and representative office
for trading (SIUP3A). In the context of this article we talk about the former.
Representative office
is defined as an office set up by a foreign company or company located outside
of Indonesia in order to take care of its business interest in Indonesia. This
can also involve the preparations for establishing a foreign owned company in
the future.
Roles and limitations
of a representative office
Office activities are
limited to its role as a supervisor, liaison, coordinator and representative of
the interest of the parent company
Office is not allowed
to generate income, all transactions will be handled by the parent company
Benefits of
representative office
As you could see from
the role of representative office, it is not a substitute to opening a limited
liability company (PT PMA) as it won’t be able to act as a separate entity.
However, there are several reasons why many foreign companies choose a representative
office over PT PMA.
1. No capital
requirement
Foreign owned
companies are required to have investment plans for at least US$1.2 million and
paid up capital of US$300,000. This is not a small amount and in many cases the
investors want to test the market first before making such capital commitments.
As representative
office you won’t have any capital and therefore the capital requirements don’t
apply. For some investors it also means that they won’t have to play with the
minimum capital and do everything by the law.
2. Handle the sales
and delivery
As a representative
office you are still allowed to do the sales and delivery of your
products/services. The restriction is that you need to charge your clients from
your parent company. In many cases your Indonesian clients will accept it and
you can delay opening a PT PMA until you have gained a strong client portfolio.
3. You are still
entitled to non-permanent stay permit (KITAS)
Just like a PT PMA, representative
office can apply non-permanent stay permits (KITAS) to its foreign experts. You
will be able to legally stay and work in Indonesia.
Contact us
If you have further queries, please contact Tannet
24 hours Malaysia hotline：603-21418908;
24 hours Hong Kong hotline：852-27837818;
24 hours Hong Kong hotline：86-755- 36990589;
Email: mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my