What You Need to Know When Setting Up an Indonesia Representative Office

Corporate Secretary Service Indonesia – Opening an Indonesia representative office is a strategic move for many international businesses wanting to build presence in one of Southeast Asia’s largest markets. With a growing population and a digitally connected consumer base, it’s no wonder why global companies are taking this route to explore opportunities in the country, without diving headfirst into full-scale operations.

Let’s take the example of TikTok. With millions of active users in Indonesia, it made perfect sense for the company to set up a local office. While TikTok’s Indonesian office doesn’t run commercial activities like selling or direct marketing, it plays a key role in monitoring the market and staying engaged with regulators and stakeholders. That’s essentially what a Foreign Company Representative Office, known locally as KPPA, is designed to do.

So what exactly is a KPPA? In simple terms, it’s an office set up by a foreign company that wants to explore business opportunities, coordinate activities, and maintain a local presence, without earning revenue in Indonesia. It doesn’t involve buying, selling, or investing, at least not directly. But it does allow companies to keep their finger on the pulse of the Indonesian market.

The process of opening a representative office in Indonesia is governed by the Indonesian Investment Coordinating Board (BKPM), under Regulation No. 4 of 2021. This regulation outlines everything from who can apply to the types of businesses allowed to set up KPPAs.

Applicants can be an individual (Indonesian or foreign) or a company acting on behalf of a foreign entity. And there are several types of representative offices allowed in the country, ranging from foreign trading companies and construction firms to businesses involved in electricity and engineering services.

Read Also: How to Open Representative Office in Indonesia?

Now, before setting up shop, you’ll need to gather some paperwork. The required documents include:

• The company’s Articles of Association, either in English or translated into Indonesian
• A formal Letter of Appointment for the head of the office, acknowledged by an Indonesian Embassy or Trade Attaché
• A Letter of Intent outlining the purpose of the office
• A signed statement from the appointed head declaring they will only work in that role in Indonesia, with no other side business
• A reference letter from an Indonesian Embassy, IIPC, or Trade Attaché

Once the documentation is complete, the next step is registration through Indonesia’s OSS-RBA system. Since a KPPA is considered low-risk, it doesn’t need a full business license, just a National Business Identification Number (NIB), which acts as its permit and remains valid as long as the office operates.

It’s important to understand that while a representative office in Indonesia can coordinate and liaise, it cannot conduct profit-generating activities. That means no contracts, no invoicing, and no local transactions. The office also can’t manage any branches or subsidiaries in the country.

What it can do, however, is oversee operations, connect with stakeholders, and prepare for potential investment moves in the future. It’s a way to dip your toes into the Indonesian market without the full commitment of setting up a PMA (foreign-owned company).

To sum it up: If your company is exploring market opportunities in Southeast Asia, setting up an Indonesia representative office is a smart, low-risk first step. You’ll be able to stay close to the action, gather insights, and lay the groundwork for future expansion, without the overhead of full incorporation. And with the right guidance, the process doesn’t have to be overwhelming.

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 Indonesia Representative Office. 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!