A foreign company planning to setup an office or expand their business in Indonesia has different options that they may consider for their company structure. Choosing the appropriate investment structure for your business depends on several factors, including its planned activities, industry, and investment size.
The business entities available to invest in Indonesia are Representative office (RO) and Foreign Limited Liability Company. Both of these types are explained in the Types of Business in Indonesia guide and is suggested reading.
At-a-glance: A comparison of the 2 main business entity types in Indonesia, pros and cons, set up requirements, and more.
The differences can be overviewed in the below table. You may also click the FIE structure type in the column header to read further details about each entity.
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Comparison: Representative Office vs Foreign Limited Liability Company (PT PMA) |
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Type |
A foreign investment company or PT PMA is the preferred structure for foreign investors looking to have a legal presence in the country.
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Opening a representative office (RO) is the fastest and simplest way of establishing a legal entity in the country. This set up is a temporary arrangement – ROs are not allowed to engage in any commercial activities, issue invoices, sign contracts, or earn any revenue.
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Activities |
There are no restrictions on where the PT PMA can set up in the country, but the business can only focus on one specific sector or area. All applicants will need approval from the Indonesian Investment Coordinating Board (BKPM) |
The business activities of ROs are limited to:
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Minimum capital requirement |
A total paid-up capital of 10 billion rupiah (US$697,000). (excluding land and properties);
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No minimum capital requirement
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Liabilities |
Liability limited to the company’s assets |
Parent company bears liability for the activities and is responsible for financing operations. |
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Tax exemptions |
Can benefit from tax incentives available |
Representative offices are not permitted to generate income and thus are not eligible for tax exemptions. |
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Time frame |
4 to 6 weeks |
3 to 5 weeks |
