Opening A Representative Office in Indonesia

Representative office in Indonesia

Opening a representative office is the fastest way to get a legal and market presence in Indonesia. It is also easier than setting up a limited liability company. It comes, however, with more limitations.

In this article, I will explain everything you need to know about establishing a representative office in Indonesia, and when you should prefer it over a limited liability company.

What is a representative office?

A representative office is an office set up by a foreign company or a company located outside Indonesia (‘parent company’) to take care of its business in Indonesia.

This means you must already have an existing legal entity abroad before opening a representative office in Indonesia.

A representative office may act as a supervisor, liaison, coordinator, and representative of the parent company’s interests in Indonesia. All financial transactions must be handled by the parent company — a representative office is not allowed to generate income.

A representative office is not the same as a branch office. If you are looking to establish a local entity that can earn revenue, import products, or own a land and property, you will need to set up a foreign direct investment (PT PMA) company.

There are three types of a representative office:

  • a general representative office (Kantor Perwakilan Perusahaan Asing – KPPA)
  • a representative office for trading (KP3A)
  • a representative office for foreign construction companies (BUJKA)

General Representative Office (KPPA)

Representative office for trading (KP3A)

Representative office for foreign construction companies (BUJKA)

Activities limited to:

a. Taking care of the interests of the parent company, and companies affiliated to the parent company

b. Preparing the establishment and development of a PT-PMA


Activities of a KP3A may include:
a. Becoming selling, manufacturing, and buying agent for the parent company (however, all transactions must still be under the parent company’s name)
b. Opening the parent company’s branch offices in Indonesia
A BUJKA is a representative office for foreign construction service companies.
The BUJKA license can be used to deliver construction service all over Indonesia.
To deliver construction service, a BUJKA needs to set up a joint operation with a local construction service company (BUJK)
A local construction service company (BUJK):– must be a limited liability company (PT)– must have 100% Indonesian citizens and Indonesian companies as its shareholders

– must be classified as a “large” construction service company by the National Construction Services Development Board (LPJK)

– must have a construction service business license (IUJK) issued by the Department of Public Works.

KPPA is not allowed to issue any invoice KP3A is not allowed to issue any invoice
Office must be located in the capital of an Indonesian Province, and in the commercial high rise building Can be located in the capital of either a province or a regency/city all over Indonesia Office location not specified by the law
License valid for up to 5 years. (a newly issued license is valid for 3 years, and can be extended twice for 1 more year each) Temporary license is valid for  2 months
Permanent license is valid for 1 year
Extended license is valid for up to 3 years, and may be extended perpetually
License extendable, valid for 3 years
KPPA is suitable if the parent company would like to do feasibility studies in Indonesia to test the market, and later open a PT PMA KP3A is suitable if the parent company is a manufacturer/ product owner with a plan to establish a network of agents and distributors in Indonesia A BUJKA is suitable for a foreign construction company planning to expand its service in Indonesia.
Through a BUJKA, you may be able to contact people, companies, and government institutions and collect information regarding available construction projects in Indonesia.
You may also:– participate in a tender – hire foreign experts and Indonesian staff to support your operation

– open a bank account

– work on a construction project together with a local construction company (BUJK) without first having to obtain construction licenses as a PT PMA
In other words, you can bypass a long and costly bureaucratic process by establishing a BUJKA.

Benefits of setting up a representative office

Although it is not substitute to a limited liability company (PT PMA), there are benefits to having a representative office in Indonesia. The following benefits are several reasons why many foreign companies choose a representative office over a PT PMA:

No capital requirement

Foreign owned companies are required to have investment plans for at least Rp. 10 billion ( ~US$800,000 based on current exchange rate) and paid up capital of Rp. 2.5 billion (~US$200,000).

Representative offices do not have any capital, thus the same capital requirements that bound foreign owned companies do not apply. For some investors, this also means they can establish market presence in Indonesia very cheaply and still do everything by the law.

The possibility of handling sales and delivery

A representative office is allowed to do the sales and delivery of its own products/services. The limitation is that you need to charge your clients under the name of your parent company. In many cases your Indonesian clients will accept it and you can delay opening a PT PMA until you gain a strong client portfolio.

You are still entitled to a limited stay permit (KITAS)

Just like a PT PMA, a representative office can apply for limited stay permits (KITAS) for its foreign executives. This means you will be able to legally stay and work in Indonesia.

Timeline of establishing a Representative Office

Because of its simplified process, setting up a representative office is much faster than a limited liability company. The steps are as follows:

General representative office (KPPA)

Documents obtained Timeline (working days)
Approval Letter from the BPKM/ KPPA License 7
Domicile Letter from the local subdistrict 3
Tax registry 2
TDP/ Company Registry 10

Representative office for trading (KP3A)

Documents obtained Timeline (working days)
Representative Office of Foreign Trade Company Temporary License/ SIUP3A Temporary 7
Domicile Letter from the local subdistrict 3
Tax registry 2
TDP/ Company Registry 10
Representative Office of Foreign Trade Company Permanent License/ SIUP3A Permanent 8

Representative office for construction companies (BUJKA)

Documents obtained Timeline (working days)
Review of application and issuance of Government Levy to be paid 10
Representative Office of Construction Company License/ BUJKA 7
Domicile Letter from the local subdistrict 3
Tax registry 2
TDP/ Company Registry 10

Ready to set up a representative office in Indonesia? Or need advice on whether to register a limited liability company (PT PMA) instead? Contact us below or go to our representative office page.


Market entry services in Indonesia

Indosight provides legal and payroll services to companies entering and expanding in Indonesia. Get in touch with our consultants regarding our company registration, payroll, compliance or visa services.

The information provided will remain confidential to Indosight and will only be used to schedule and prepare for the meeting.

11 thoughts on “Opening A Representative Office in Indonesia

  1. Jack chang

    Would you be able to locate an Indonesian Company in Jakarta? If I send you the Company’s previous telephone numbers.
    Jack Chang (Melbourne)

  2. James C.A.Tay

    Lauri, my recommendation to you is to work together where Penang island can be used as the global hub for indonesian investment especially for Aceh and the whole of sumatra. Jakarta city is too crowded and too polluted with toxic rain, traffic jam and chaos, like any big city where millions fight to survive………Penang island is just minutes to Medan, flying time is less than 20minutes, could be faster…….we should meet soon to discuss about this proposal. see you, my nordic friend, james

    • Lauri

      Thank you for the advice, James!

      Definitely let’s meet soon and have a discussion about such opportunities.

  3. Aamir Ansari

    Dear Madam,

    We are a Freight Forwarding firm based in Mumbai, India. If we want to start Freight forwarding business in Indonesia, would it be advisable to start our own office or a representative office.

    What would be the investment required for representative office.

    Kindly advise.


    • Indosight

      Representative office is not required to put up capital more than it needs to finance its operations in Indonesia.

  4. charlotte

    Hi, I think General Representative Office (KPPA)- would apply to my business- I have a uk business- we are soucing products in bali, and I would like to be based there- and able to work on my computer (legally). I will generate no income from indonesia- no invoices or sales.
    I would like to hire an indonesian citizen as well as opened a bank account.

    All seems straight forward in terms of the above info you have given- which is very thorough (thanks).

    I have a couple of questions….
    1. Relating to- Office must be located in the capital of an Indonesian Province, and in the commercial high rise building- Is there a work around for this- as I would like to work from my home (wherever that is when I reloacte- probably seminyak).

    2. Also can I apply for this from the UK? Do you have any idea on costs of setting it up?


    • Angeline Taniwan

      Dear Charlotte,

      Yes, you can apply it from UK, and the cost for KPPA is $2100. If you decided to reside in here, you will need to apply for KITAS. You can get a help from us for this matter by talking to our consultant or by dropping us an email

      Angeline Taniwan

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