How To Set Up Representative Office In Indonesia

Setting up a representative office in Indonesia can be a great way to tap into this growing economy. By understanding the process and requirements, you can make the most of this opportunity.

The first step is to find out if you need a representative office in Indonesia. The most common reason to establish a representative office is to establish a presence in a new market. If you are not selling or providing services in Indonesia, you may not need a representative office.

The next step is to understand the process and requirements for setting up a representative office in Indonesia. The most important step is to get approval from the Indonesian government. This process can be time consuming and complex, so it is important to work with a local agent who understands the process.

The final step is to set up your office. This includes finding office space, hiring staff, and setting up systems and procedures. It is important to set up your office correctly to ensure that you are in compliance with Indonesian law.

By understanding the process and requirements for setting up a representative office in Indonesia, you can make the most of this opportunity.

What is a representative office in Indonesia?

A representative office in Indonesia is a foreign business entity that has been granted permission by the Indonesian government to conduct certain business activities in the country, but is not allowed to engage in any commercial activities. A representative office is essentially a sales and marketing office, and its primary purpose is to promote the company’s products or services to potential Indonesian customers.

A representative office in Indonesia must be registered with the Indonesian Ministry of Trade and Industry and must comply with all the applicable regulations and requirements. The representative office must also appoint a local Indonesian resident as its representative who is responsible for managing the office and liaising with the Indonesian authorities.

The representative office is not a separate legal entity and does not have any legal standing in Indonesia. It is merely an extension of the foreign company and is dependent on the foreign company for its funding and operations. The representative office must also comply with the foreign company’s by-laws and regulations.

A representative office in Indonesia is not allowed to engage in any commercial activities and can only conduct the following activities:

-promote and market the company’s products or services

-conduct market research and gather information on the Indonesian market

-establish business relationships with potential customers and partners in Indonesia

-provide customer service and support to Indonesian customers

Is representative office a legal entity?

A representative office (RO) is a legal entity that is not authorized to engage in commercial activities on its own but is established by a foreign company to promote and support its business interests in the country where the RO is located. 

A RO is not a separate legal entity from its foreign parent company and cannot enter into contracts or own assets in its own name. The main purpose of a RO is to act as a liaison between the foreign company and local customers, suppliers, and government officials. 

A RO must be registered with the local authorities and must comply with the laws and regulations of the country in which it operates. It is important to note that a RO is not a tax-exempt entity and is responsible for paying income taxes on its profits in the country in which it operates. 

The establishment and operation of a RO can be a useful tool for foreign companies seeking to do business in a foreign market. However, it is important to consult with an attorney or other legal professional to ensure that the RO is in compliance with the local laws and regulations.

What is the purpose of representative office?

A representative office is an office that a company sets up in a foreign country to promote and sell its products or services in that country. A representative office typically does not have the authority to enter into contracts or to sign agreements on behalf of the company. Instead, it is responsible for building relationships with potential customers and partners in the country and for promoting the company’s products or services. A representative office may also provide support to the company’s sales representatives in the country.

How do I set up a local company in Indonesia?

There are a few steps to setting up a company in Indonesia. The most important part is to make sure you have the correct permits and licenses.

The first step is to choose a business name. You can check the availability of business names at the Directorate General of Intellectual Property Rights (DGIPR).

The next step is to register your company with the Ministry of Law and Human Rights. You will need to provide the company’s business name, registered capital, and articles of association.

You will also need to register for a tax number and get a business permit. The permit will depend on the type of company you are setting up. For example, a trading company will need a different permit than a foreign investment company.

You will also need to register with the Social Security Agency (SSA) and the Indonesia National Social Security Fund (BPJS).

The last step is to open a bank account. You will need to provide the company’s business name, address, and tax number.

There are a few things to keep in mind when setting up a company in Indonesia. First, the company must have at least one Indonesian citizen as a shareholder. Second, the company must have a physical office in Indonesia. Third, the company must have a representative in Indonesia. This representative can be an Indonesian citizen or a foreign national.

Is representative office a company?

A representative office is not a company. It is a branch of a company that is registered in a foreign country. The main purpose of a representative office is to promote and sell the company’s products or services in the foreign country. A representative office cannot engage in any business activities that generate revenue. It can only engage in activities that promote and support the company’s business.

Is a representative office the same as a branch?

Both a representative office and a branch can be seen as extensions of a company’s operations in a foreign country. However, there are some important distinctions between the two.

A representative office is essentially a sales and marketing office. It can promote and sell the company’s products and services in the country, but it is not allowed to engage in any commercial activities that generate profits. This means that it cannot engage in activities such as producing or selling products, providing services, or engaging in any other commercial activity.

A branch, on the other hand, can engage in all commercial activities, including producing and selling products, providing services, and so on. It is essentially a miniature version of the company, with all the same rights and responsibilities.

There are a few other key differences between a representative office and a branch. A branch is a standalone entity, while a representative office is an extension of the company’s home office. This means that a branch is responsible for its own financials, while a representative office is not. Additionally, a branch is a separate legal entity in the country where it is established, while a representative office is not.

So, when should a company establish a representative office and when should it establish a branch? The answer depends on the company’s business goals and the regulations of the country where it plans to operate. A representative office is a good option for companies that want to establish a presence in a foreign country but are not ready to establish a full branch. It is also a good option for companies that are not allowed to establish a branch in a certain country.

What is the difference between a branch office and a representative office?

A branch office and a representative office are both types of offices that businesses can establish in foreign countries. However, there are some key differences between the two.

A branch office is a full-fledged office with its own employees and management. It can engage in all sorts of business activities in the foreign country, and is fully responsible for its own profits and losses.

A representative office, on the other hand, is mainly used for marketing and research activities. It cannot engage in any commercial activities, and is not responsible for its own profits or losses.

Generally speaking, a branch office is a better option for businesses that plan to do a lot of business in the foreign country. A representative office is better for businesses that are just starting out in a foreign market and want to get a feel for the local business environment.