Representative Office

The primary purpose of a Representative Office (RO) in Indonesia is to conduct market research, promote and develop business opportunities, and to serve as a liaison between the parent company and local clients or suppliers. An RO is not permitted to generate revenue or engage in commercial activities in Indonesia. It also cannot enter into contracts or agreements on behalf of the parent company. Furthermore, it must appoint a local agent who will act as a liaison between the RO and the relevant government agencies.

Overall, it is a beneficial option for foreign companies looking to establish a presence in Indonesia without incurring the cost and regulatory requirements of setting up a subsidiary or Branch office.

Setting up a representative office (RO) in Indonesia involves several steps, including obtaining the necessary approvals and licenses from the relevant government agencies.

To set up a representative office (RO) in Indonesia, several documents are required to be submitted to the relevant government agencies. The main documents needed include:

1. A letter of application to the Indonesia Investment Coordinating Board (BKPM) outlining the proposed activities of the RO in Indonesia and the parent company’s business activities, financial statements.

2. A copy of the parent company’s certificate of incorporation and articles of association.

3. A list of the proposed directors of the RO and their resumes or curriculum vitae.

4. A copy of the RO’s proposed articles of association.

5. A certificate of good standing from the parent company’s home country, indicating that the company is in compliance with all legal and regulatory requirements.

6. A detailed business plan outlining the proposed activities of the RO in Indonesia.

7. Proof of the RO’s registered address in Indonesia.

8. A copy of the parent company’s financial statements for the previous 2 years.

9. A copy of the local agent’s identification documents.

10. A copy of the parent company’s tax clearance certificate.

Representative offices (ROs) in Indonesia also have certain restrictions on the activities that they can engage in. These restrictions are put in place to ensure that ROs are not engaged in commercial activities and are only conducting market research and promoting business opportunities for the parent company.

Overall, the main purpose of a RO is to conduct market research, promote and develop business opportunities, and to serve as a liaison between the parent company and local clients or suppliers, not to conduct any commercial activities.

The representative appointed to a representative office (RO) in Indonesia has several responsibilities, which include:

1. Acting as a liaison between the RO and the relevant government agencies: The representative is responsible for communicating with government agencies such as the Indonesia Investment Coordinating Board (BKPM) and the Ministry of Law and Human Rights on behalf of the RO and ensuring that the RO is in compliance with all legal and regulatory requirements.

2. Overseeing the day-to-day operations of the RO: The representative is responsible for managing the RO’s operations and ensuring that the RO’s activities are in line with the parent company’s objectives.

3. Maintaining accurate records and submitting regular reports: The representative is responsible for maintaining accurate records of the RO’s activities and financial transactions and submitting regular reports to the BKPM and Ministry of Law and Human Rights as required.

4. Ensuring compliance with local laws and regulations: The representative is responsible for ensuring that the RO is in compliance with all local laws and regulations, including those related to tax and labor laws.

5. Representing the company in its relationships with local clients and suppliers: The representative is responsible for representing the parent company in its relationships with local clients and suppliers and for promoting business opportunities for the parent company.

6. Acting as a point of contact for the parent company: The representative is responsible for serving as a point of contact for the parent company and for communicating any relevant information or updates to the parent company.

Overall, the representative appointed to a RO in Indonesia plays a key role in ensuring that the RO’s activities are in compliance with all legal and regulatory requirements, and that the RO’s objectives are met.

Yes, there are reporting requirements for representative offices (ROs) in Indonesia. They are required to submit regular reports to the Indonesia Investment Coordinating Board (BKPM) and the Ministry of Law and Human Rights regarding the activities of the office and its financial status.

The specific reporting requirements may vary depending on the type of business and the nature of the RO’s activities, but generally, they are required to submit annual reports and financial statements outlining the activities and the financial performance of the parent company. These reports should be submitted within a certain timeframe, usually within 6 months after the financial year end.

They may also be required to submit regular activity reports to BKPM outlining the progress of their activities and any updates on their business plans.

Additionally, they are also required to submit an annual declaration to the Ministry of Law and Human Rights, which states that the RO has not engaged in any commercial activities during the previous year.

Overall, it is important for ROs to be aware of and comply with all reporting requirements in order to maintain good standing with the relevant government agencies and avoid any penalties or fines.

The main difference between a Representative Office (RO) and other types of foreign business entities in Indonesia is that an RO is not allowed to generate revenue or engage in commercial activities. It can only conduct market research, promote and develop business opportunities, and serve as a liaison between the parent company and local clients or suppliers.

On the other hand, a subsidiary, also known as a Perseroan Terbatas (PT), is a separate legal entity from the parent company and is allowed to generate revenue and engage in commercial activities in Indonesia. A subsidiary is required to register with the Ministry of Law and Human Rights and comply with all the legal and regulatory requirements for a local company.

A branch office is also a separate legal entity from the parent company but it is not considered a separate legal entity from the parent company. A branch office is allowed to generate revenue and engage in commercial activities in Indonesia, but it is required to register with the Ministry of Law and Human Rights and comply with all the legal and regulatory requirements for a local company.

Another difference is in terms of the ownership structure, an RO is fully owned by the parent company, while a subsidiary or branch office can be owned by the parent company and/or other shareholders.

Overall, an RO is a useful option for foreign companies looking to establish a presence in Indonesia without incurring the cost and regulatory requirements of setting up a subsidiary or branch office, but with certain limitations in terms of activities and ownership structure.

There are several advantages of setting up a representative office in Indonesia for foreign companies:

1. Cost-effective: Setting up a representative office is less expensive than setting up a subsidiary or branch office.

2. Low risk: A representative office does not have legal status and is not allowed to generate revenue in Indonesia, which means that the risk for foreign companies is relatively low.

3. Access to market information: A representative office can be used to gather market information and to promote the parent company’s products or services.

4. Access to government incentives: Foreign companies can access government incentives and programs designed to attract foreign investment.

5. Access to local networks: A representative office can help a foreign company establish relationships with local businesses and government agencies.

6. Easier to set up: Setting up a representative office is generally a simpler and faster process than setting up a subsidiary or branch office.