“There are four types of Representatives Office Indonesia, however the procedure to closing each one is similar. It begins with a directive from the head office and is carried out through the OSS System.”
Representative Offices in Indonesia
A representative office (“RO”), as defined in the Decree of the Head of the Investment Coordinating Board 22/SK/2001 of 2001 on Provisions for the implementation of Decree of the President Number 90 of 2000 on Representative Offices of Foreign Companies, is a representative office established by a foreign company or several foreign companies outside of Indonesian territory in order to manage the interests of the company or affiliated companies in Indonesia and/or in other countries and/or prepare for the establishment and development the business of foreign investment companies in Indonesia and/or in other countries. RO is led by one more foreign citizen or Indonesian citizens acting as office managers based on letters of appointment of the foreign company, this leader is in another word known as the Chief Representative Officer.
In Indonesia there are four types of foreign representative offices, namely the Representative Office of foreign trading companies (“FTRO”), Representative Office of foreign companies, Representative Office of foreign construction service business entities and Representative Office of foreign electricity support services. The ROs are differentiated in accordance with their purposes, thus each type of RO has its own parameters of allowed activities as well as the required business license.
Closing of Representative Office in Indonesia.
In accordance with Indonesian Investment Coordinating Board Regulation Number 5 of 2021 on Guidelines and Procedures for the Supervision of Risk-Based Business Licensing to close a Representative Office, a request must be submitted to the Indonesian Investment Coordinating Board (“BKPM”). The request encompassed the request for revocation of the licenses and permits issued by the BKPM and may be made by either the Chief Representative Officer or the Head of the foreign business entity.
The process is done through the Online Single Submission System (“OSS”) and requires the validation of the following data, which will be verified within 3 (three) working days:
- Identity of the Chief Representative Officer or Head of the foreign business entity
- Taxpayer Identification Number of the RO
- Report of the latest period of the RO
In addition to the verification of the above-mentioned data, the submission must be accompanied by the following documents:
- Letter of statement from the head of the RO or board of directors of the company in the country of origin stating that they do not have any debts or receivables with other parties in Indonesia
- Assignment letter or statement from the company’s board of directors in the country of origin on the closure of the representative office.
Once the application has been approved by BKPM, the OSS system will issue a RO Registration Revocation Letter as well as a Revocation Letter of NIB. In addition to revocation of the licenses and permits in the OSS, the RO must also deactivate any other permits and licenses, such as the taxpayer identification. However, this step is done after the process in the OSS is done and has obtained the certification letter of expired business license.
Lastly, it is to be noted that all letters or documents originating from outside of Indonesia that will be used for the submission, must first be legalized or apostille. The purpose of both processes is to authenticate documents for international use.
Author: Felicia Cindy Hanubrata
Do you need assistance and/or further discussion in closure of representative office?
Let’s contact us through:
WhatsApp Hotline: 0812-1111-8608
Email: info@ylpconsulting.com
Our experienced Consultant will be delighted to assist you.