Incorporation of Foreign Company Representative Office (KPPA & KP3A) in Indonesia

Foreign Company Representative Office (KPPA- Kantor Perwakilan Perusahaan Asing) is an office incorporated by an overseas company to represent itself in Indonesia. Foreign Company Representative Office usually has limited functionality and generally are prohibited from directly engaging in operational activities; signing contracts; issuing official invoices, receiving payments from its clients, and directly engaging in any other profit generating activities.

The requirements and procedure to form a representative office in Indonesia is governed by the Regulation of The Chairman of The Investment Coordinating Board No 15 of 2015 Regarding Guidelines and Procedures for Licensing and Non-Licensing Investment. According to these regulations there are 3 (three) types of Representative Offices which can be incorporated in Indonesia, namely:

– Foreign Company Representative Office (KPPA- Kantor Perwakilan Perusahaan Asing) which is led by one or more Foreigners or Indonesian citizens appointed by the parent company as Representative Executives in Indonesia. The functionality of KPPA is limited to:

manage the parent company’s corporate interests and/or
prepare the establishment and development of its business in Indonesia.

The documents required to incorporate KPPA are as follows:

Copy of Articles of Association of the foreign company represented and any amendment(s) in English or its translations in Bahasa from sworn translator.
Letter of appointment from the foreign company represented to whom which will be proposed as a Representative Executive.
Power of Attorney to sign the application if the management of the foreign company represented by another party.
Copy of profile of company to be represented.
Copy of passport of director of company to be represented.
Copy of valid passport (for foreigner) or copy of identification card number (for Indonesian citizen) who will be proposed as a Representative Executive.
Letter of statement concerning the willingness of Representative Executive to stay, and only work in the position as the Representative Executive without doing other business in Indonesia.
Copy of CV (Curriculum Vitae) of Representative Executive.
Copy of Degree/Diploma of Representative Executive.
Copy of the lease agreement of office.

Important Notes:

KPPA can only be incorporated in capital of Indonesian provinces (i.e. Jakarta, Bandung, Yogyakarta, Kalimantan etc.)
The location of KPPA must be in office building.
KPPA permit is valid for 3 (three) years and can be extended 2 (two) times for 1 (one) year each.
After 5 years KPPA may be granted extension for different activities than before.
KPPA must be incorporated in an Office Building/Tower.
In case Representative Executive is foreigner, he/she must obtain KITAS and Work Permit to stay and work in Indonesia.

– Foreign Company Trade Representative Office (KP3A – Kantor Perwakilan Perusahaan Perdagangan Asing) which is led by one or more Foreigners or Indonesian citizens appointed by the parent company as Representative Executives in Indonesia. The functionality of KP3A is limited to:

Introduce, promote and market the goods produced by a parent company, as well as providing information, or directions for use and importation of goods to companies / users in Indonesia;
Conduct market research and surveillance in Indonesia for domestic sales of goods produced by parent company;
Conduct market research on the items required by the companies/users in Indonesia as well as providing information about the terms of the export of goods to companies in the Indonesia;
Closing and signing of contracts for and on behalf of the company that is appointed by the parent company in Indonesia for export of goods.

The basic documents required to incorporate KP3A are same as KPPA. But to perform the trading related activities in KP3A, a license (SIUP3A- Surat Izin Usaha Perwakilan Perusahaan Perdagangan Asing) must be obtained from Indonesia Investment Coordinating Board (One Stop Services – PTSP BKPM). Based on its validity SIUP3A is categorized in two groups, namely:

Temporary SIUP3A (Valid for 2 Months)
Permanent SIUP3A (Valid for 1 year)

SIUP3A can be extended 2 times for 1 year each, giving maximum validity of 3 years. The extension of SIUP3A depends on the validity of appointment letter of Representative Executive. The documents required for the application of SIUP3A are as follows:

Fully filled application form
Original Letter of Intent, Letter of Appointment and Statement Letter legalized by Public Notary (in resident country of parent company) and Trade Attaché/Embassy of Republic Indonesia in resident country of parent company.
Letter of reference from Trade Attaché/Embassy of Republic Indonesia in resident country of parent company.
RPTKA (Expatriate Manpower Utilization Plan) of Representative Executive of KPPPA. (only for Temporary SIUP3A)
Temporary recommendation letter TA 00 from Manpower Department of Indonesia (DEPNAKAR) (only for Temporary SIUP3A)
Copy of valid passport of Representative Executive (if foreigner), or copy of Identity card (KTP) and Tax Card (NPWP) in case Representative Executive is Indonesian citizen.
Copy of CV (Curriculum Vitae) of Representative Executive.
Power of Attorney with company stamp, stamp Rp. 6000 (materai) and signed by Representative Executive if the application of SIUP3A is submitted by another party.
Copy of domicile certificate/ copy of lease agreement of office (for permanent SIUP3A).
Copy of IMTA (Work Permit) of Representative Executive.
Original KPPPA approval letter from Indonesia Investment Coordinating Board (BKPM).

Important Notes:

KP3A is prohibited to carry out any trading activities and sales transactions such as submitting tenders, signing contracts, settling claims etc.
KP3A can be incorporated in capital of provinces, districts and cities in Indonesia.
KP3A must be incorporated in an Office Building/Tower.
In case Representative Executive is foreigner, he/she must obtain KITAS and Work Permit to stay and work in Indonesia.

– Foreign Company Construction Representative Office (BUJKA- Kantor Perwakilan Badan Usaha Jasa Konstruksi Asing) license can be obtained by a Foreign Construction company with large scale qualification as stipulated in the Ministerial Regulation. BUJKA License can be used to undertake construction service business activities throughout the territory of Indonesia. BUJKA License is valid for 3 (three) years and can be extended. BUJKA is led by one or more Foreigners or Indonesian citizens appointed by the parent company as Representative Executives in Indonesia.

A request for a new BUJKA license, license renewal and / or replacement of data subjected to an administration fee which is directly deposited to State Treasury and is as follows:

For field of Construction consulting services and Construction Supervision Services USD 5,000 (five thousand United States dollars); and / or
Contractor services valued at USD 10,000 (ten thousand United States dollars).

Documents required for obtainment of BUJKA are as follows:

Application Letter (Original in Bahasa Indonesia)
Copy of Article of Association of Company from mother country which has been legalized by a public notary or competent authorities in the country of origin.
General Data of Foreign Construction Services Business Entity.
Original Letter of recommendation from Indonesian Embassy in Country of Origin which states that Construction Company is legally registered in the country and has a good reputation.
Copy of Valid Construction Service Permit of parent company which has been certified by the issuing authority.
Copy of Equalization Certificate legalized by an Institute of National Level;
Original Letter of appointment for the Chief Representative of BUJKA (Kantor Perwakilan Badan Usaha Jasa Konstruksi Asing) by the parent company.
Record of latest financial statements of parent company which has been audited by a public accountant;
Copy of passport or identity card of Chief Representative;
Curriculum Vitae of Chief Representative;
Domicile Certificate of the Representative Office in Indonesia issued by the local municipality office;
Letter of Statement of Truth and Authenticity of Documents (Original)
Statement Letter that the directors or commissioners of parent company are not serving as commissioners or board of directors in other construction companies (Original)
Original power of stamped and signed by company directors if the application is not directly carried out by Chief Representative Executive along with documents of receiver of POA.

Related Downloads:

1 Comment