How to Open Representative Office in Indonesia?

Corporate Secretary Service Indonesia – If you’re a foreign company planning to explore opportunities in Southeast Asia, understanding how to open representative office in Indonesia can be a smart first move. Indonesia is a fast-growing market with huge potential, and setting up a representative office is a low-risk way to get started without making a full financial commitment.

A representative office allows your business to establish a presence, build relationships, and study the local market, all while staying within the legal framework. But since this type of office can’t carry out direct sales or revenue-generating activities, it’s important to know exactly what it can, and can’t, do.

What is a Representative Office?

Think of a representative office as your company’s eyes and ears in Indonesia. It’s not a branch office or a full company, it’s more of a liaison between your headquarters and the Indonesian market. This office is managed by a local or foreign-appointed head, often referred to as the KPPA (Kepala Perwakilan Perusahaan Asing).

The goal of the KPPA is not to sell products or offer services but to build brand awareness, coordinate with local partners, monitor market trends, and prepare the groundwork for future business expansion.

Why Choose a Representative Office?

If you’re unsure about jumping into a full investment like a PT PMA (Foreign Direct Investment Company), a representative office gives you a way to test the waters first. Here are a few key reasons why many foreign businesses choose this route:

• No major capital requirement – Since you’re not conducting commercial activity, there’s no need to invest large amounts upfront.
• Easy entry – The registration process is straightforward compared to setting up a full-fledged company.
• Brand presence – It’s a good way to introduce your company to the Indonesian market.
• Market research – You can study trends, meet local stakeholders, and develop a business strategy.

How to Open Representative Office in Indonesia – Step by Step

Setting up a representative office does involve paperwork, but the process is manageable if you know what’s required. Here’s what you’ll need to get started:

• Company Articles of Association – A copy of your company’s formation document, either in English or translated into Indonesian.
• Letter of Appointment – This document officially names the head of your Indonesian office.
• Letter of Intent – A formal request to open a representative office, acknowledged by the Indonesian embassy or trade attaché.
• Declaration Letter – A written statement from the appointed head confirming their commitment to live in Indonesia and work exclusively for your company.
• Reference Letter – For some industries, particularly trading, a reference letter from the Indonesian embassy or local IIPC office may also be needed.

All these documents must be properly certified and acknowledged before submitting them to the Indonesian Investment Coordinating Board (BKPM).

Read Also: How to Establish a Representative Office Indonesia: A Smart Start for Foreign Investors

What Can, and Can’t, You Do?

A common misconception is that a representative office functions like a regular business. That’s not the case. Here’s a clear breakdown:

Allowed:

• Promote your parent company
• Gather information
• Develop market strategies
• Build local connections
• Supervise your Indonesian agents or partners

Not Allowed:

• Sell goods or services
• Sign commercial contracts
• Generate income from Indonesia
• Issue invoices or collect payments

So, while you’re able to do many strategic things, actual commercial transactions are off the table for now. That’s something you can pursue later by converting to a PT PMA.

Understanding how to open representative office in Indonesia can make a big difference if you’re serious about long-term investment. It’s a strategic, low-risk way to enter a new market, gather insights, and build credibility. While the office won’t bring direct profits, it can help lay the foundation for future success.

If you’re unsure where to begin or want to avoid paperwork headaches, working with a local consultant can save you time and ensure everything complies with Indonesian regulations. At the end of the day, the key to making the most of this opportunity is starting smart, one step at a time. And remember, how to open representative office in Indonesia isn’t just about forms and processes, it’s about preparing your business for real growth in one of the region’s most dynamic markets.

So, don’t worry about developing your business by setting up a company in Indonesia, because Portcorp is here as a solution for your business, also when you need to understand how to open representative office in Indonesia. Portcorp is your comprehensive corporate secretary service in Indonesia. With our presence, you can get a dedicated company secretary to support you to what you need. Our company secretaries will track deadlines and file paperwork so your business keeps running smoothly. Contact us now on +6221-5020-8090 for your business succeed in the future!