Representative Office (KPPA)
If you are planning to expand your business into the Indonesian market, but are unsure of the market, then establishing a representative office is a viable option.
KPPA stands for “Kantor Perwakilan Perusahaan Asing” or a Representative Office is an entity established by a foreign party with the aim of taking care of its business activation in Indonesia. In addition, KPPA also functions in preparing the establishment of a PT PMA (Foreign Direct Investment).
We often come across foreign clients who have businesses in several countries and plan to expand their business to Indonesia, but are unsure of the Indonesian market itself. In this case, in addition to informing them about the market in Indonesia, as a party who has owned a business, we also advise them to study and research the market legally themselves. That way, they understand firsthand the conditions and circumstances. Establishing a representative office (KPPA) is one of the options. We provide the client with details on the purpose and function of the representative office so that no misunderstandings occur.
In general, a representative office (KPPA) has several characteristics, among others:
- Its activities are limited to marketing, research, and promotion.
- In the form of a branch office that has a parent company outside Indonesia.
- Does not require shareholder requirements.
- Does not require Director and Commissioner requirements.
- Does not require minimum capital requirements.
- Limited to sponsoring foreign employees.
REQUIREMENTS
- Article of Association of the company (English/Indonesian version);
- Letter of Appointment of the representative made by the (parent) company and witnessed by the Indonesian Embassy in the country of origin;
- Letter of Intent witnessed by the Indonesian Embassy in the country of origin;
- Letter of Statement made by the Head of the KPPA stating his/her commitment not to do any business activity except being the head of the KPPA, witnessed by the Indonesian Embassy in the country of origin;
- Letter of Reference made by the Indonesian Embassy in the country of origin;
- ID detail of the Head of the representative (Passport for foreigner; KTP and NPWP for Indonesian citizen);
- Closed up picture (4 X 6 cm) 2 pcs (color);
Disclaimer
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.
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FAQ
In general, PMA stands for Foreign Direct Investment while PMDN stands for Domestic Direct Investment. From the perspective of the meaning, in short, PMA is an investment activity to conduct business in the territory of the Republic of Indonesia which carried out by foreign investors, both those who use foreign capital wholly or in joint ventures with domestic investors. Then, PMDN is an investment activity to conduct business in the territory of the Republic of Indonesia which carried out by domestic investors using domestic capital.
Basically, subjects in domestic investors are Indonesian citizens (WNI), Indonesian business entities, the Government of Indonesia, or regions that make investments in the territory of Indonesia. Meanwhile, foreign investors are foreign citizens, foreign business entities, and/or foreign governments making investments in the territory of the Republic of Indonesia.
With the new regulations and system changes, the process of establishing a company, both PT PMDN or PT PMA, does not take a long time. It takes at least 10-15 working days after the complete document requirements are fulfilled.
Yes. To be able to carry out the establishment process of PT PMA, the authorized capital that must be written in the deed of establishment is Rp. 10 billion excluding the value of land and buildings. In making the deed of establishment, the Notary appointed by us will provide a statement letter to the shareholders who sign that they will deposit the said amount of capital. However, the statement will usually not include the fulfillment period. After the company is established, the company will carry out investment reporting on a regular basis which will later become one of the proofs for the company's activities with its capital.
Generally, the set-up company process is divided into 2 stages. Where, the first stage is the establishment stage. Where at this stage, you will process your company's basic documents and permits, such as: deed of establishment, legalization document, Company NPWP (Taxpayer ID Card), Business Identification Number, Company Bank Account Opening and other documents according to your sector and business field. Furthermore, the second stage is the operational stage. At this stage, before and/or during your company's operations, you are required to fulfill the company's obligations. Such as, payment of related taxes, fulfilling operational permits, reporting LKPM (Investment Activity Report), BPJS Employment and Health Registration, and other obligations according to the sector and business field.
BPJS stands for Social Security Administering Board, which is a special institution tasked with administering health and employment insurance for the public, civil servants, and private employees. BPJS has 2 types, namely: BPJS Healthcare and BPJS Employment. Where every registered company that has employees is required to register its employees in the BPJS program, both BPJS Healthcare and BPJS Employment.
LKPM stands for Investment Activity Report. It is a report on the progress of investment realization and problems faced by business actors that must be prepared and submitted periodically.
Yes, you do. When you do the establishment of a company, a correspondence address is fundamental. It is needed because later all correspondence documents from the government or related agencies will be sent to your company's office/correspondence address. In addition, a company is required to have a domicile which is one of the requirements for making a deed of establishment.
Do you have a location in mind where you plan to establish your company in general? For example, are you planning to do it in Bali, such as in Kuta, Ubud, Sanur or Jimbaran area? We have several specific place references that may help you determine the location of your company office. Just please let us know.
At the stage of the company establishment process, you are not required to come to Indonesia. Although it is no required to come, you may visit Indonesia with the visa which the service we can assist you to have it.
Some process in the establishment company can be carried out by giving your power of attorney to one of our team whom handles the process of establishing your company. Our team is experienced enough in their field therefore the necessary matters will be prepared and informed to you.