The three most common types of Representative
Office that can be opened by an overseas company in Indonesia are –
-
Trading Representative
Office,
-
Public Works
Representative Office
-
Regional Representative Office
A summary of the requirements for establishment of
these Representative Offices by overseas companies (updated September,
2002) is given below (Source : PT PricewaterhouseCoopers FAS,
Jakarta).
III. REGIONAL REPRESENTATIVE OFFICE
Scope of activities
The Presidential Decree No. 90/2000 allows an overseas company
(“principal company”) to establish a Regional Representative Offices (RRO)
in Indonesia.
The Capital Investment Coordination Board (BKPM) is
the Government agency responsible for issuing the RRO license. BKPM
requires the principal company to have an affiliate, subsidiaries or
branches in any other Asian countries (at least two) as evidenced by
the following documents:
- Joint venture agreements; or
- Technical assistance agreement.
The main objectives of establishing an RRO are to
facilitate the operation and activities of a group of multi-national
companies and to search for investment opportunities in Indonesia.
Accordingly, the RRO is permitted to:
- Carry out supervisory functions ;
- Act as liaison office to the affiliated companies or
subsidiaries or branches of the principal company; and
- Make preparation relating to the establishment and business
development of a foreign investment in Indonesia.
However, the RRO is not permitted to:
- Manage a company either an affiliate, subsidiary or branch of
the principal company; and
- Generate any income from any sources in Indonesia.
The RRO could be managed by an Indonesian or
expatriate Chief Representative i.e. Representative Office Executive.
The principal company may also appoint additional expatriate manager(s)
to assist the office manager.
Expatriates working in an RRO are exempt from
foreign exit tax (currently Rp 1,000,000, approximately US$ 100).
Application procedures
A standard application form i.e. Model KPWPA is available for the
principal company to complete. The application form and the relevant
supporting documents shall be submitted to BKPM for approval.
Following the issuance of the RRO license, the
candidate expatriate Chief Representative must prepare the Expatriate
Manpower Utilization Plan (Rencana Penggunaan Tenaga Kerja Asing –
RPTK).
The Chief Representative has to indicate in the
RPTK the position and terms of appointment of any expatriates planning
to work for the RRO. The RPTK approval can be sought from the MOMT.
Following the RPTK approval, the RRO can start
arranging the expatriate work and stay permits.
Expiration date
None.
Reporting requirements
The RRO is required to file the following reports:
|
|
Type of Report |
|
Department/
office |
|
1 |
Monthly and annual employee tax returns |
|
The Indonesian Tax Office |
|
2 |
Annual activity report (standard form available) |
|
BKPM. |
|
3 |
Annual manpower report |
|
MOMT |
Time frame
The RRO license could be issued within two to three months after
the submission of completed documentation. Timeframe to arrange the
required immigration documents and work and stay permits are excluded.
Fees
The professional fee to provide assistance in processing the RRO
license will be US$ 11,500. The scope of work will include the
following:
- Preparing the Model KPWA application;
- Reviewing the supporting documents, that are provided by the
overseas principal company;
- Submitting the Model KPWA application (attached with the
supporting documents) to BKPM;
- Monitoring the RRO license approval process;
- Preparing the RPTK application;
- Submitting the RPTK application and monitor the approval
process;
- Arranging for the necessary immigration documentation such as
work and stay permits for the candidate expatriate Chief
Representative;
- Arranging for documentations such as Tax Registration Number (NPWP);
- Arranging for the Company Registration (TDP);
- Filing the required manpower report.
