The Usage and Functions of Foreign Company Representative Office

Foreign Company Representative Office (KPPA) is an office lead by an Indonesian citizen or a foreign national which is appointed by the foreign company as the foreign company’s representative in Indonesia. KPPA is usually established for foreign investors who want to have a market presence before starting a business in Indonesia by establishing a Foreign investment Limited Liability Company (“PT PMA” – Perusahaan Terbatas Penanaman Modal Asing). In short, KPPA is a representative office established, only for the general purpose of management and administrative affairs.

A. Types of Representative Offices in Indonesia

There are four types of Representative Offices in Indonesia, which are regulated though laws and regulations it includes the following:

1. Foreign Company Representative Office (KPPA);
2. Foreign Trade Company Representative Office (KP3A);
3. Foreign Construction Service (BUJKA);
4. Representative Office of Foreign Oil and Gas Company (KPPA Migas).

B. KPPA Validity Period

The KPPA license is valid for 3 (three) years and can be extended unless there are special restrictions specifically explained in the appointment letter. Keep in mind, that this extension must be made no later than 1 (one) month before the KPPA permit expires.

Read More: The Enforcement of Document Legalisation with Apostille Certificate in Indonesia

C. KPPA function

KPPA can only function to carry out the following activities:

1. Supervise, cooperate, organize, coordinate and represent the parent company or its overseas branches
2. Prepare for the formation and development of foreign-owned companies in Indonesia.

KPPA is not permitted to:

1. Become a management member of a company, branch or subsidiary in Indonesia.
2. Earn income through sales or purchase transactions and other sources in Indonesia.

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