As a country that has natural resources, as well as a fairly high level of economic growth, Indonesia has a good infrastructure development for investors, especially in trading activities. Foreign investors are able to establish a Trading Representative Office orKantor Perwakilan Perusahaan Perdagangan Asing (“ KP3A”). KP3A is led by one or more foreigners or Indonesian citizens appointed by the parent company as Representative Executives in Indonesia. The functionality of KP3A is limited to:
- Introduce, promote and market the goods produced by a parent company, as well as providing information, or directions for use and importation of goods to companies/users in Indonesia
- Conduct market research and surveillance in Indonesia for domestic sales of goods produced by the parent company
- Conduct market research on the items required by the companies/users in Indonesia as well as providing information about the terms of the export of goods to companies in Indonesia
- Closing and signing of contracts for and on behalf of the company that is appointed by the parent company in Indonesia for the export of goods.
The types of KP3A are (i) Selling Agent is to performing promotional or liaising activities, (ii) Manufactures Agent which is to perform market survey activities and (iii) Buying Agent which is to perform supervising or liaising activities.
As with all representative offices, a KP3A is not allowed to issue any invoices and all transactions should be under the parent company’s name. KP3A is allowed to open a branch office (this is not possible under a KPPA) and may be located in provincial capital cities or in any other city/district within Indonesia.
To established a KP3A in Indonesia, the foreign investors shall obtained a Representative Business License of Foreign Trade Company or Surat Izin Usaha Perwakilan Perusahaan Perdagangan Asing (“ SIUP3A ”) which can be submitted by accessing INATRADE which managed by Ministry of Trade.
About the author:
Prisca Anabella was awarded a Bachelor of Law (Sarjana Hukum) degree by Atma Jaya Catholic University in 2018, majoring in Criminal Law. When she was a law student, she also served internship in another law firm in Jakarta, where she gained invaluable insights into the day-to-day operation of a law firm.