The following main types of representative are available to foreign investors in Indonesia. A representative office has no shareholders however requires a mother company abroad which it shall represent in Indonesia.
General Representative Office (KPPA)
A general representative office (KPPA) allows a foreign investor to explore the Indonesian market and to have a presence in Indonesia. There are no investment requirements to set up a representative office, which makes the establishment process easy and straightforward. The activities of a representative office are however limited. Representative offices are not allowed to be engaged directly in commercial transactions and are not allowed to generate income.
Similar to the KPPA, foreign trade companies can set up a trade representative office (KP3A) in Indonesia quickly and with relative ease. A trade representative office can act as the selling agent, a manufacturers agent and/or a buying agent of the parent company. Also in line with the KPPA, a trade representative office is not allowed to perform any direct trading activities or sales activities with clients.
A construction representative office (BUJKA) can only opened by foreign entities which are qualified as large construction companies. In addition, the BUJKA must set up a cooperation with a local construction company which is 100% owned by Indonesian shareholders. Once the BUJKA is established, it is allowed to join tenders and to perform construction projects in Indonesia. The BUJKA allows a foreign investor to be fully operational in Indonesia, without the need to go through the complex establishment a limited liability company.
