KPPA and KP3A – Choosing to start by establishing a representative office either in the form of KPPA or KP3A to check or evaluate market conditions is very much needed by investors before establishing a PT. The purpose is to reduce risk.

KPPA and KP3A provide an opportunity for investors to study the market, establish relationships with potential partners, and conduct market research without major commitments.

In this article we will discuss KPPA and KP3A.

What is KPPA?

A Foreign Company Representative Office (KPPA) is an office led by one or more individuals who are foreign citizens or Indonesian citizens appointed by a foreign company or a foreign company association abroad as its representative in Indonesia. KPPA has a KPPA activity permit and its activities include managing the interests of the company or its affiliated companies, preparing the establishment and development of a Foreign Investment Company (PMA) in Indonesia.

What is KP3A?

A Foreign Trading Company Representative Office (KP3A) is an office led by individuals who are Indonesian citizens or foreign citizens appointed by a foreign trading company or a foreign company association abroad as its representative in Indonesia. KP3A functions to promote products in Indonesia owned by its parent company abroad.

Comparing KPPA and KP3A

KPPA

Established to supervise, connect, and coordinate the interests of foreign companies and their affiliated companies. KPPA also prepares the establishment and development of PMA (Foreign Investment) businesses in Indonesia.

KP3A

Established as a means of promoting foreign parent company products in Indonesia. KP3A can act as a marketing agent, but is not directly involved in trade transactions.

Location and Operational Authority of KPPA and KP3A

KPPA

Located in the provincial capital and cannot open branches in other regions. KPPA does not have the authority to conduct direct trading or sales activities.

KP3A

Can be located in various regions of Indonesia and has a permit to open branches. KP3A can engage in promotional activities, but cannot conduct direct trading or issue invoices.

KPPA and KP3A Management

KPPA

Led by representatives appointed by foreign companies, either Indonesian citizens or foreign citizens appointed directly by the company as their representatives.

KP3A

Led by representatives appointed by foreign companies, either Indonesian citizens or foreign citizens. The management of the KP3A office is led by certain parties who have a university educational background and relevant experience.

Requirements for Establishing KPPA and KP3A

KPPA

1. Copy of memorandum of an article of associations which has been legalized by the Indonesian Embassy.
2. Letter of Appointment, Letter of Intent, Letter of Statement, and Letter of Reference, Letter of Working Program which has been legalized by the Indonesian Embassy.
3. The full address of the office (only located in a non-residence area and in the capital city of a Province).
4. Copy of passport – biodata page, if foreigner chief of representative office.
5. Copy of KTP and NPWP, if Indonesian chief of representative office.

KP3A

1. Copy of memorandum of an article of associations which has been legalized by the Indonesian Embassy.
2. Letter of Appointment, Letter of Intent, Letter of Statement, and Letter of Reference, Letter of Working Program which has been legalized by the Indonesian Embassy.
3. The full address of the office (only located in a non-residence area and in the capital city of a Province).
4. Copy of passport – biodata page, if foreigner chief of representative office.
5. Copy of KTP and NPWP, if Indonesian chief of representative office.
6. Curriculum Vitae chief of representative office.
7. Copy of last degree certification chief of representative office.

Obligations of KPPA and KP3A

Required to make an activity report every 6 months. The report contains the realization of activities and the number of workers including Indonesian and foreign workers.

Semester 1 Activity Report is submitted no later than July 10 of the relevant year and

Semester 2 Activity Report is submitted no later than January 10 of the following year.

Conclusion

KPPA and KP3A are two forms of representative offices that differ in their objectives and functions. KPPA is more of a general representative office, while KP3A can carry out broader trading activities as an agent for a parent company abroad.

Need a Representative Office Establishment Service? Either KPPA or KP3A?

Indoservice can assist you in the process of establishing a Representative Office, either KPPA or KP3A & managing permits related to your representative office in Indonesia. Contact us for more information at Telp. or Chat via whats app +62877-1449-8500 or email admin@indoservice.co.id.