Your Guide to Setting Up a Representative Office in Indonesia: What, Why, and How
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Published on October 27, 2025 · 4 min read · by Nik Nik Fadlah

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In today’s interconnected global economy, companies often seek to expand their reach across borders without immediately committing to full-scale operations.

One of the most strategic ways to do this is by establishing a representative office.

Although it doesn’t engage in direct commercial activities such as sales or profit-making, a representative office serves as a vital bridge between the parent company and potential markets.

In short, a representative office plays an essential role in conducting market research, strengthening brand presence, and building local business relationships.

Many foreign companies are interested in opening representative offices in Indonesia.

The country’s large population and strategic location in Southeast Asia are among the main reasons behind this interest.

However, if you’re planning to open a representative office in Indonesia, there are several important factors you need to consider.

Check out this article to learn more!

What is a Representative Office?

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A representative office is a business entity established by a company based in another country to manage its interests in the country where the office is located, in this case, Indonesia.

This type of office acts as a bridge between the parent company and its partners or customers in Indonesia.

While a representative office allows a foreign company to have a physical presence in Indonesia, it is not allowed to generate profit through commercial activities.

Such activities include buying or selling goods, signing trade agreements, or receiving payments from customers.

In other words, the operations of a representative office are strictly limited.

It is only permitted to conduct market research, perform quality control, and facilitate communication with the parent company.

The Benefits of Setting Up a Representative Office in Indonesia

Here are the advantages of setting up a representative office in Indonesia.

No minimum capital requirement.
You can build connections with local distributors, suppliers, and potential clients.
You are allowed to open a bank account for business related transactions.
Gain better insights into Indonesia’s regulatory framework and business practices.
You are allowed to hire both local and foreign employees for your office.
Provides valuable networking opportunities within the Indonesian market.

How to Set Up a Representative Office in Indonesia?

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Are you interested in setting up a representative office in Indonesia?

If so, you need to fulfill certain documents and other requirements.

Here are the requirements for opening a representative office in Indonesia.

1. Letter of Approval

The first requirement to open a representative office in Indonesia is that the parent company must obtain a letter of approval from the Ministry of Investment and Downstream Industry (BKPM).

This letter of approval is essential because it serves as the main license allowing your office to operate legally in Indonesia.

2. Documents from the Parent Company

Copies of the deed of incorporation and other legal documents of the parent company abroad, including financial statements and business licenses from its country of origin.

3. Office Space

A representative office must have a physical presence in Indonesia.

You need to check zoning requirements and local regulations with BKPM or other relevant institutions.

In general, there are many office spaces available, such as Capital Cove, located in BSD City, Tangerang.

This office has a strategic location and is surrounded by various facilities.

4. Open Bank Account

The bank account is not intended for commercial activities, it is only used to pay for operational expenses such as office rent, employee salaries, and other costs.

Having a bank account makes managing your transactional activities much easier.