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Get to know the differences between PT PMA and Representative Offices

Diposting pada 8 Juni 2024 oleh admin / Dilihat: 1 kali

Get to know the difference between PT PMA and representatives Office As time goes by and economic stability, many foreign investors are interested in setting up companies in Indonesia. Not necessarily establishing a company in Indonesia, many foreign companies also choose to establish a Representative Office (KPPA) with several considerations.

The differences between PT PMA and Representative Offices that must be understood

Based on the definition, PTPMA is a company that carries out business activities and has capital sources from foreign parties. Business activities can be carried out entirely by foreign investors or combined with domestic investors. Meanwhile, a Representative Office (KPPA) is an office headed by a foreign individual or Indonesian citizen who is appointed directly by a foreign company abroad as its representative in Indonesia and does not carry out business activities. The prohibition on Representative Offices (KPPA) is contained in the Head of BKPM Regulation no. 22 of 2001 which strictly prohibits KPPA from carrying out commercial activities. The purpose of establishing a Representative Office (KPPA) is to develop the business of PT PMA and its affiliates. Even though the Representative Office (KPPA) does not carry out business activities, it still has to fulfill tax obligations.

Requirements for establishing PT PMA and KPPA

After knowing the differences between PT PMA and Representative Offices (KPPA), it is also necessary to know the requirements for establishing PT PMA and Representative Offices (KPPA) that must be met, including the field and type of business. For business fields and types, PT PMA and Representative Offices (KPPA) need to check the DNI (Negative Investment List) so that there is clarity regarding the permitted business fields. The requirements that need to be met are:

PTPMA

  1. Types of business such as Real Estate, IT related, construction, distributors, must have a physical office address, cannot be a Virtual Office.
  2. PMA can only organize wholesale trade, retail only for local companies.
  3. Virtual offices can be used for wholesale trade and representative offices.
  4. Paid-in Capital IDR 10,001,000,000 (until 31 December 2024)
  5. Minimum investment IDR 10,001,000,000 (until 31 December 2024)

Representative Office (KPPA)

  1. Preparing to establish a PT PMA Company in Indonesia (market testing, research, feasibility studies, etc.)
  2. Handling the Company’s interests in Indonesia (as advisor, controller, liaison)
  3. Can’t get any profit
  4. Work KITAS is limited to 2 people: CRO and CRO assistant
  5. Representative offices can use Virtual Office

In general, KPPA can be an initial process that foreign companies can choose before investing in Indonesia. Usually KPPA is formed to test feasibility and see the extent of market interest in the product to be offered. So, what type of company suits your business field?

We and our team will help you in the process of establishing a company and obtaining permits related to your company’s business in Indonesia. Contact us now for further information on Tel. +62877-1449-8500 or email admin@indoservice.co.id.

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Get to know the differences between PT PMA and Representative Offices

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