establishing virtual office in indonesia

Establishing Virtual Office in Indonesia is Now Legal

  • InCorp Editorial Team
  • 10 March 2016
  • 4 minute reading time

If your company is considering about business expansion in Indonesia, but you do not have the resources to get the real professional office, now you can try to establish a virtual office.

Companies with limited capital that wish to get the complete facility of professional and reliable offices. Also can use the service of virtual offices. The virtual office agency usually offers several plans to be included in their services. This including a real fix company address in reputable location. So that you can have your mails or packages delivered to you safely. And another benefits to hold several important business meetings, have your calls, fax, and emails received and/or delivered/forwarded to you, and other useful professional and elegant services.

You can have all the features of the real office without actually have one. So that you can save a great deal of money in performing your business routines.

Therefore, if your company budget is not sufficient to meet the standard required to establish a PT PMA (foreign-owned company) in Indonesia. Opening a representative office or a virtual office can be a cost-saving alternative. Companies that wish to know deeper insights of Indonesian market before they finally establish a PT PMA can also use this kind of representative office to start building good business reputations in this country.

The Cost

The virtual offices are now available in several big cities in Indonesia, including Jakarta, Surabaya, Bandung, Bali, etc. The cost of the virtual offices in Indonesia starts from at least USD 60 to more than USD 1,000 per month. It’s depending on the complexities of the features, facilities, or services offered to the companies. The only challenge is to find the most reputable company. That’s why you need to assure yourself that your company is represented properly by the virtual office agency you have chosen.

Choosing the Virtual Office Services

There are so many agencies that claim to have the best virtual office services or plans. So you must be really careful to select the one that can ultimately carries the services it has promised. You need to find a reputable agent that has a mixed of experiences and values. Because it can truly represent your business.

You also need to regularly check whether or not the services are done on your behalf. To make sure that you receive what you deserve, a mere online searching is not enough. You need to have some good references at hand, or contact a trusted and reputable company, This will give you just the right advice for your company.

You might want to read Top 8 FAQs on Virtual Office

Pros and Cons

Despite all of the advantages mentioned earlier, you also need to know some possible disadvantages of establishing a virtual office in Indonesia. One of them is the local regulation in each of the city. The majority of the big cities in Indonesia have already acknowledged the existence of virtual offices as companies’ representative offices. There are still some city governments that plan to prohibit the mushrooming phenomena of virtual offices.

It is done so that the government can locate the development of businesses in their respective city. This can avoid scams or frauds that are often done by fake companies. To know more about the current regulations of certain cities in Indonesia regarding to the establishment of virtual offices, you can contact us.

Related article: Key Factors to Consider before Choosing Your Virtual Office in Indonesia

Activities Allowed to Do by A Representative Office

Because virtual offices only act as representative offices, there are some restrictions in their business activities. Below are activities that are allowed to be done by a representative office in Indonesia. This activities according to the BKPM regulation No 5 Year 2013, specifically in Article 68 (2):

  1. To run some activities on the behalf of the foreign parent company or its Indonesian affiliated companies.
  2. To prepare the establishment as well as the development of PT PMA (foreign-owned company) in Indonesia.

In addition, Article 2 of BKPM Regulation No 22 Year 2001 regulates about some restricted activities done by a representative office, including:

  1. To search for income, such as doing activities to generate income, selling, purchasing, etc. With a company or individuals in Indonesia.
  2. To participate in a company, branch, or subsidiary office’s management in Indonesia.

The license for a representative office only lasts for three years and can be extended twice. The extending period is only for 1 year each. So that a company can only have a total of 5 years permit to open a representative office in Indonesia.

A query and further information on services related to the establishment of virtual office in Indonesia can be sent to us. Contact Cekindo for services related to opening a virtual office in Indonesia.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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Frequent Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.