The local government of the Capital City of Jakarta has issued a new policy in a circular letter No. o6/SE/2016 on the establishment of Certificate of Domicile and other licenses that come afterwards for the users of virtual offices in Jakarta.
This policy is aimed to create a better business climate in Jakarta and to support the previous policy on an integrated one-stop service center for investment licensing, especially for businesses that use virtual offices.
Despite the fact that virtual offices give so many advantages for business people, especially those in small-medium sizes with relatively lower budgets, the existence of virtual offices also bring some worrisome for the policy makers.
First, the government will find it difficult to monitor the activities of the companies—whether or not they are real businesses with legal activities and employers—so that the existence of virtual offices opens more doors for frauds and manipulations. Second, there are many virtual office owners who do not have license to open such a business. So this is potentially detrimental to the country as they don’t pay taxes.
What Companies Can Use Virtual Office?
To address those issues, the government of DKI Jakarta issued a new policy stating that businesses can use virtual offices under some conditions. To highlight some of them, we have summarized some important points from the new policy. It is clearly stated that Certificate of Domicile and other licenses that are issued afterwards. And can be given as long as the companies meet the following criteria:
- The company must have legal documents. Such as a business license that states the exact location of its office and its business activities.
- The offices can be located in the residential house, virtual office, or co-working space, as long as the location:
a. does not change the main function of the residential house,
b. does not use sidewalks,
c. does not cause any pollution and does not disturb the neighborhood, and
d. does not use automatic machinery in the production processes.
- The company submit the following documents:
a. ID card (one of the directors or owners of the company must hold Jakarta’s ID Card)
b. Family Card
c. Individual NPWP (Tax Card)
d. A Bank Account data or a recommendation letter from a bank
e. A stamped affidavit (a statement letter) stating the company’s readiness to meet all the requirements stated in No. 2
- The company should state the addresses of both the company’s virtual office and the location of where the company actually performs its activities (whether in an office or a house)
- The validity of the certificate of domicile is based on the term of the lease, with the maximum period of 1 year and can be extended in accordance with the existing regulations.
- The validity of the company’s business license is 1 year and be extended in accordance with the existing regulations.
Cekindo is open to any questions regarding to the legal issues concerning the using of virtual offices in Indonesia. Furthermore, we can also help you to arrange the documents needed to establish a legal and profitable business in Indonesia. Contact us for further information.
Complex information about Virtual Office in Jakarta you can find on our new website – virtualofficeinjakarta.com.