Limitations and Obligations of Foreign Company Representative Offices (KPPA)

A Foreign Company Representative Office (KPPA) is an office leds by an individual Indonesian Citizen (WNI) or a Foreign Citizen (WNA) appointed by a foreign company or a combination of foreign companies abroad as their representative in Indonesia (Article 1 point 19 PerBKPM 13/2017 )

There are 5 (five) limits for KPPA in Indonesia, as follows (Article 37 paragraph (1) PerBKPM 13/2017):

  1. Served as a supervisor, liaison, coordinator, and taking care of the interests of the company or its affiliated companies;
  2. KKPA prepares the establishment and business development of foreign investment companies in Indonesia or in other countries and Indonesia;
  3. The location is in office buildings in the provincial capital;
  4. KPPA is not looking for income from sources in Indonesia, including not being allowed to carry out activities or do something related to the transaction / sale and purchase of commercial goods or services with companies or individuals in the country;
  5. KPPA doesn’t join as participates in any form in the management of a company, subsidiary or branch of a company in Indonesia

KPPA also has obligations that must be fulfilled, such as (Article 37 paragraph (2) PerBKPM 13/2017):

  1. KPPA has an obligation to carry out the activities of representative offices of foreign companies in Indonesia, they must have a KPPA License. KPPA licenses are conducted online through the Electronic Information Service and Investment Licensing System (Article 44 PerBKPM 13/2017).
  2. The Head of the KPPA must reside in Indonesn and take a full responsibility for the smooth running of the office, not be allowed to carry out activities outside of office activities and not hold concurrent positions as the head of the company and / or other KPPA.
  3. In the event that the head of the appointed KPPA is a foreign national and / or employs foreign workers, he / she must employ TKI in accordance with the provisions of the legislation.
  4. KPPA permit is valid for a maximum of 3 (three) years unless specified in less than 3 (three) years in the appointment letter and can be extended in accordance with the validity period of the appointment stated in the appointment letter.
  5. KPPA must submit an extension of KPPA License no later than 30 (thirty) days before the validity period specified in the KPPA Permit ends.
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