Setting up a representative office in Indonesia has become significantly more streamlined in recent years.
The entire licensing process is now conducted digitally through the OSS RBA system (Online Single Submission Risk-Based Approach), as governed by Government Regulation (Peraturan Pemerintah or PP) No. 28 of 2025. For the most common type of representative office, the Foreign Company Representative Office (Kantor Perwakilan Perusahaan Asing or KPPA), a Business Identification Number (Nomor Induk Berusaha or NIB) can be issued automatically once the system validates the submitted data.
That said, a faster process does not mean a risk-free one. Many foreign companies have encountered serious legal and operational problems due to selecting the wrong type of representative office, submitting documents that do not meet current legalisation standards, or inadvertently conducting activities that are legally prohibited for non-commercial entities.
This guide walks you through the entire process accurately, based on regulations in effect as of 2025 and 2026.
What Is a Representative Office in Indonesia?
A representative office is a non-commercial entity established by a foreign company or a group of foreign companies outside Indonesia to manage the interests of the parent company or its affiliates within the country.
From a legal standpoint, this entity is not an independent legal body in Indonesia. It is an extension of the parent company incorporated abroad.
The fundamental distinction between a representative office and a Foreign Investment Company (Perseroan Terbatas Penanaman Modal Asing or PT PMA) lies in commercial capacity. A representative office cannot conduct commercial transactions, issue invoices, or generate revenue from sources within Indonesia.
Its permitted activities are limited to market research, coordination, brand promotion, and preparation for the eventual establishment of a PT PMA. Because of these restrictions, a representative office carries no minimum paid-up capital requirement, whereas a PT PMA requires a minimum total investment value of more than Rp10 billion per business activity per project location, excluding land and buildings.
4 Types of Foreign Representative Offices in Indonesia
Before initiating the registration process, it is essential to identify the correct type of representative office that aligns with the parent company’s line of business. Each type is governed by different regulations, falls under a different licensing authority, and carries distinct requirements.
| Type of Representative | Abbreviation | Sector | Licensing Authority |
| Foreign Company Representative Office | KPPA | All general sectors | Ministry of Investment/BKPM via OSS |
| Foreign Trading Company Representative Office | KP3A | Trade | Ministry of Trade via OSS |
| Foreign Construction Services Company | BUJKA | Construction | Ministry of Public Works |
| Foreign Oil and Gas Company Representative Office | KPPA Migas | Energy | BKPM with recommendation from the Ministry of Energy |
This guide focuses on the KPPA, which is the most widely used structure among foreign companies seeking to establish an initial presence in Indonesia across various industries.
What a KPPA Can and Cannot Do
This is the area that most frequently creates legal complications for foreign companies. Under Ministerial Regulation on Investment No. 5 of 2025, a KPPA is only permitted to carry out the following functions:
First, acting as a supervisor, liaison, and coordinator for the interests of the parent company or its affiliates in Indonesia. Second, preparing for the establishment and development of a PT PMA in Indonesia. Third, operating from office premises located in a provincial capital city.
The following prohibitions apply strictly and without exception:
- Prohibited from seeking income from sources within Indonesia
A KPPA is not permitted to engage in or conduct any commercial sales or purchase transactions involving goods or services with companies or individuals within Indonesia. - Prohibited from issuing invoices in the name of the KPPA
All final transactions must be conducted directly between the parent company abroad and its partners or buyers in Indonesia. - Prohibited from participating in the management of any other company in Indonesia
This includes any subsidiary or branch of any company operating within Indonesia.
Violations of these provisions may result in the revocation of the NIB, criminal sanctions, and reputational damage that could affect the parent company’s broader operations in Indonesia.
Document Requirements for Setting Up a KPPA
Document preparation is the stage that most significantly determines the speed of the registration process. Based on Ministerial Regulation on Investment No. 5 of 2025, the following documents must be prepared and uploaded through the OSS system:
Documents from the parent company abroad
All documents originating from outside Indonesia must be legalised through the apostille process for countries that are signatories to the Apostille Convention, or through legalisation at the Indonesian Embassy or Consulate in the country of origin for countries that are not party to the convention.
The required documents include the company’s certified deed or Articles of Association, which must contain the structure of the board of directors, shareholders, and the registered address, as well as the Deed of Establishment. A Letter of Appointment signed by the head of the parent company in the country of origin is also required to formally designate the Chief Representative Officer in Indonesia.
Documents related to the Chief Representative Officer
If the Chief Representative Officer is a foreign national, the required documents are a passport with a remaining validity of at least 18 months and a signed declaration of willingness to reside in and work solely as Chief Representative Officer without engaging in any other business activities in Indonesia.
If the Chief Representative Officer is an Indonesian citizen, the required documents are a National Identity Card (Kartu Tanda Penduduk or KTP) and a Taxpayer Identification Number (Nomor Pokok Wajib Pajak or NPWP).
Office domicile documents
A valid lease agreement between the KPPA and the building management of the chosen office premises is required. The office must be located within a commercial office building in a provincial capital city and must comply with the spatial zoning classification recorded in the OSS system.
How to Set Up a Representative Office in Indonesia: Step by Step
The following outlines the complete registration procedure for a KPPA through the OSS RBA system, based on regulations in effect as of 2025 and 2026.
Step 1: Create an OSS Account
Access the portal at oss.go.id and create an account using the identity of the Chief Representative Officer or through an appointed legal representative. It is important to ensure that all data entered at this stage is consistent with the legal documents of the parent company, as data inconsistencies are the most common cause of delays in the validation process.
Step 2: Select the Representative Office Licensing Category
After logging in, navigate to the Business Licensing menu, select Representative Office and Others, then select KPPA. Click the KPPA NIB Registration button to begin the process.
Step 3: Enter Principal Office Data
In the Principal Office Data form, enter the complete information of the parent company abroad, including the company name, line of business, official address, and director details. Click Continue to proceed.
Step 4: Enter Representative Office Data
In the Representative Office Data form, enter the details of the office to be established in Indonesia, including the building address, the name of the Chief Representative Officer, and the planned number of employees. Ensure that the office address is consistent with the applicable spatial zoning (Rencana Detail Tata Ruang or RDTR) recorded in the area.
Step 5: Upload Documents and Confirm
Upload all required documents in accordance with the checklist. On the KPPA NIB Draft screen, review all entered data carefully, tick the disclaimer checkbox, and click Continue.
Step 6: NIB and KPPA Registration Are Issued
For a KPPA classified as low risk, the NIB and KPPA registration will be issued automatically once the system validates the submitted data. The NIB remains valid for as long as the representative office continues to operate and fulfils its ongoing reporting obligations.
Post-Establishment Obligations
Obtaining the NIB is not the end of the process. There are several continuing obligations that must be met to keep the KPPA’s status active.
Periodic Activity Report
A KPPA is not required to submit a Capital Investment Activity Report or LKPM (Laporan Kegiatan Penanaman Modal). The LKPM is an investment realisation report that applies only to commercial entities such as a PT PMA.
Because a KPPA is prohibited from investing or generating revenue within Indonesia, a different reporting obligation applies: the KPPA is required to submit a Periodic Activity Report or Laporan Kegiatan every six months through the OSS portal.
The Activity Report for a KPPA covers only two items: a summary of activities carried out by the KPPA during the reporting period, and the total number of employees including both Indonesian nationals and foreign nationals.
Submission deadlines are governed by the provisions of Ministerial Regulation on Investment No. 5 of 2025 and can be confirmed directly through the OSS system.
A KPPA that fails to submit its Activity Report risks being subjected to administrative sanctions, which may include a written warning from the Ministry of Investment/BKPM, temporary suspension of the representative office licence, and revocation of the licence in cases of repeated non-compliance.
Tax Obligations
Although a KPPA does not generate income from Indonesia, it is required to register for a Taxpayer Identification Number or NPWP and to fulfil tax withholding obligations. These include reporting Income Tax Article 21 (PPh Pasal 21) on employee salaries, and Income Tax Article 23/26 (PPh Pasal 23/26) on office rental payments and third-party services.
In addition, the KPPA must submit an Annual Corporate Tax Return (SPT Tahunan Badan) with a nil status each year as evidence of fiscal compliance.
Foreign Worker Regulations
If the Chief Representative Officer or any other staff member is a foreign national, the KPPA is required to obtain an Expatriate Manpower Utilisation Plan (Rencana Penggunaan Tenaga Kerja Asing or RPTKA) approved by the central government, in accordance with Government Regulation No. 34 of 2021 on the Use of Foreign Workers.
The KPPA is also required to employ Indonesian nationals in accordance with applicable laws and regulations.
Set Up Your Representative Office in Indonesia with XPND
Setting up a KPPA involves numerous interconnected details, from meeting current document legalisation standards and ensuring data consistency between the parent company’s legal documents and the OSS system, to selecting an office location that complies with spatial zoning requirements and maintaining ongoing reporting obligations.
A small error at the outset can result in processing delays or, in more serious cases, legal violations that affect the parent company’s standing in Indonesia.
XPND assists foreign companies in navigating this entire process from start to finish. Services include document verification and preparation in accordance with current legalisation standards, registration through the OSS RBA system, NPWP registration, and ongoing compliance support including the preparation of periodic Activity Reports and the fulfilment of tax obligations.
The XPND team works in accordance with the latest regulations, including Ministerial Regulation on Investment No. 5 of 2025 and Government Regulation No. 28 of 2025, with experience serving clients in Jakarta, Surabaya, Semarang, Batam, and Bali.
An initial consultation is available at no charge to help you determine the most appropriate type of representative office for your business and to understand the expected timeline and costs involved.
