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How to Set Up a Representative Office in Indonesia | Dezan Shira & Associates

posted 2 years ago

Opening a representative office (RO) is the fastest and simplest way of establishing a legal entity in the country. This setup is a temporary arrangement – ROs are not allowed to engage in any commercial activities, issue invoices, sign contracts, or earn any revenue. Foreign investors, however, can own 100 percent of this business entity and don’t have to contribute the same paid-up capital required by PT PMAs.

Indonesia’s Omnibus Law has made amendments to ROs and introduces four types:

  • Foreign representative office (FRO);
  • Representative office for a foreign trading company (TRO);
  • Representative office for a foreign construction company (BUJKA); and
  • Representative office for a foreign electricity company (JPTLA).

In addition, the law has simplified the process for establishing an RO in Indonesia.

The business activities of ROs are limited to – market research activities, obtaining information on potential clients, developing trade contacts, and gathering information on regulations and laws. 

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