Frequently Asked Questions: #representativeoffice

A KPPA (Kantor Perwakilan Perusahaan Asing) is a representative office of a foreign company — a licensed Indonesian presence that is not a separate company and cannot trade. It exists to represent its parent: market research, liaison with Indonesian partners and buyers, promotion, and preparing for eventual investment.

What a KPPA can and cannot do:

• Can: employ staff, sponsor a KITAS for its chief representative, rent an office, conduct market development, sign nothing that generates local revenue
• Cannot: issue invoices, earn income in Indonesia, import/export in its own name, or execute sales contracts — revenue-generating activity requires a PT PMA

Questions we field most often:

• Can the chief representative be a foreigner? Yes — the chief of a KPPA may be foreign or Indonesian; a foreign chief takes a KITAS sponsored by the office
• Does it file taxes? A KPPA has no corporate income, but it still has obligations: registering for tax, withholding and remitting employee taxes, and filing the returns that apply to a non-revenue entity. A tax-reporting-only package (without full commercial accounting) typically fits
• How does it compare on cost and speed? Establishment is generally simpler than a PMA — there is no capital requirement, because there is no company — making it a low-commitment first step

The honest decision rule: if the Indonesian activity will earn revenue within the planning horizon, establish the PT PMA now and skip the intermediate step; converting later means establishing the company anyway. If the next year or two is genuinely about study, relationships and market development, a KPPA buys presence without capital commitment.

See PT.REP for Okusi’s representative office establishment service.

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