Business Licensing for Foreign Company Representative Office Based on OSS RBA
“Foreign Company Representative Office in Indonesia shall obtain a business license that can be submitted through OSS RBA’s system”
Foreign Company Representative Office or Kantor Perwakilan Perusahaan Asing (KPPA) in Bahasa is an office established by a foreign company or merged foreign company in another country as its representative in Indonesia. The establishment aims to take care of the company’s interest or its affiliated companies and to prepare the establishment and development of a foreign investment company or PT PMA.
Article 9.1 Indonesian Investment Coordinating Board Regulation Number 4 of 2021 on Guidelines and Procedures for Risk-Based Business Licensing Services and Capital Investment Facilities (BKPM’s Regulation 4/2021) regulates that business actors may submit business licenses for its representative office.
Furthermore, based on Article 9.3 BKPM’s Regulation 4/2021, a representative office can be in the form of:
- Individual Indonesian citizen;
- Individual foreign citizen;
- A business entity that is a representative for business actors in other countries with the approval of the establishment of an office in Indonesia.
Not only established KPPA, but the representative office may also be established by:
- Representative Office of a Foreign Trading Company (KP3A);
- Representative Office of a Foreign Construction Service Company (BUJKA); and/or
- Representative Office of Foreign Electric Power Supply Service.
In order to run the business, KPPA shall obtain a business license that can be submitted through the Online Single Submission Risk Based Approach or OSS RBA’s system (https://oss.go.id/).
Article 16.3 BKPM’s Regulation 4/2021 regulates that before submitting a license, there are limitations towards KPPA, namely:
- As a supervisor, connector, coordinator, and take care of company’s interest or its affiliated companies;
- Preparing to establish and develop a foreign investment company (PT PMA) in Indonesia or in other country;
- Located in an office building in the capital of the province;
- Not looking for any income that sourced in Indonesia, including not being allowed to carry out activities or enter into any engagement or transaction for the sale and purchase of commercial goods or services with domestic companies or individuals; and
- Not participating in any form in the management of a company, subsidiary company, or branch company in Indonesia.
As an information, licensing issued for KPPA belongs to the low-risk level and will be valid during KPPA’s carry out its business (Article 16.6 BKPM’s Regulation 4/2021). It means, before starting its business, KPPA must secure a Business Identification Number (NIB). The Business Identification Number (NIB) will be used as an identity and legal basis for KPPA to run its business in Indonesia (Article 12.1 Government Regulation Number 5 of 2021 On Implementation of Risk-Based Business Licensing).
Meanwhile, based on Article 22.1 BKPM’s Regulation 4/2021, to obtain Business Identification Number (NIB), KPPA must fulfill business actor’s data which contain at least :
- Name of appointing foreign company;
- Business activity of appointing foreign company;
- Address of appointing foreign company (include country of origin); and
- Representative office in Indonesia.
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Author : Bima Satriojati