Representative Office in Indonesia means an office which is utilised by foreign company or group of foreign companies for the purpose of managing the interest of company or affiliated companies and preparing the establishment and development of foreign investment company in Indonesia.
Indonesia’s laws and regulations classifies representative office into three forms, i.e., Foreign Representative Office, Foreign Trade Representative Office, and Foreign Construction Service Representative Office.
A. Foreign Representative Office
Foreign Representative Office shall be led by one or more Indonesia citizen or Foreign citizen who considered being the Representative Office Executives. The appointment of Representative Office Executives shall be based on the letter of appointment from the foreign company or groups of foreign companies.
Scope of activities of the Representative Offices are limited to:
- Its role as the supervisor, connector, coordinator, and manager of the interest of the company or affiliated companies in Indonesia and/or overseas;
- The Representative Office will not earn from Indonesia’s resources, and not conduct activity or make a contract/sale and purchase of goods or services with domestic companies or personal; and
- The Representative Office will not participate in any form of management of the company, subsidiary company, or branch company which located in Indonesia.
B. Foreign Trade Representative Office
In accordance with the related laws and regulation, the opening of Trade Representative Office may be in the form of Selling Agent and/or Manufacturers Agent and/or Buying Agent.
Scope of activities of the Trade Representative Offices are limited to:
- Introduce, promote, and improve the marketing of products that manufactured overseas by Foreign Company or Groups of Foreign Companies;
- Providing information or instruction regarding the usage and import of such products to the company or user (in this regards, the Trade Representative Office shall appoint any national company as an agent for the promoted products; and the appointment shall be based on the approval from the Foreign Company or Groups of Companies);
- Conduct market research and supervise the sales of product in relation to the products’ promotion in Indonesia;
- Conduct market research in relation to the product supply from Indonesia as required by the principal company; and
- Liaise and provide information and guideline to any prospective Indonesian counterpart in the matter of exportation requirements of the products.
Trade Representative Office is prohibited to conduct trade and sales transaction in the initial phase up until the completion phase, e.g., conducting tender application, signing contract, and conducting claims.
C. Foreign Construction Service Representative Office
In accordance with the Regulations of the Minister of Public Works, construction service is defined as consultation service in the construction working plan, service of the implementation of construction work, and service of consultation and supervision of the construction work.
Foreign Construction Service Company shall obtain the License of Foreign Construction Representative Office, in order to implement its activities in Indonesia. The License considered to be valid for 3 (three) years and can be renewed. It has the same status as business license of the National Construction Service Company. Furthermore, the license may be obtained after the Foreign Construction Service Representative Office had obtained the participation (penyertaan), competence, classification, and qualification which are stated in the form of certificate issued by the Institution of Construction Service Development (Lembaga Pengembangan Jasa Konstruksi).
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