Local Subsidiary and Representative Office Establishment Services
When expanding the business to Indonesia, it is crucial to first determine the form of expansion, business activities, and required investment amount. Depending on the business activities, there may be regulations on foreign investment and imports, making prior research essential.
We propose the most suitable form of expansion according to our clients’ needs and provide information for post-establishment considerations. We support the smooth and swift establishment of local subsidiaries and representative offices.
Establishment of Local Subsidiaries
When establishing a local subsidiary, there are two main types: PMA (Penanaman Modal Asing) for foreign investment companies and PMDN (Penanaman Modal Dalam Negeri) for domestic investment companies. In Indonesia, any company with even 1% foreign investment is considered a “foreign investment company.” Since the revision of the investment law in 2021, most businesses, from manufacturing to retail, can be fully owned by foreign investors.
We offer comprehensive support in legal and labor matters during establishment and cover accounting, taxation, and foreign employment management post-establishment. We provide precise advice tailored to your business model in a one-stop manner.
Services Offered (Partial List):
- Drafting of Articles of Incorporation and reporting to the Ministry of Law and Human Rights
- Obtaining a Tax Identification Number
- Registering data with the Ministry of Investment
- Acquiring special business permits (retail, restaurant, construction)
- Obtaining import permits
- Master list (tax exemption measures for imported machinery)
Establishment of Representative Offices
If the investment scale of a local subsidiary is too large or if you wish to conduct preliminary surveys by dispatching personnel, establishing a representative office is an option.
There are three main types of representative offices for Japanese companies: general, trading, and construction. Like in other countries, these offices are generally limited to non-revenue activities such as marketing and market research. However, construction representative offices can engage in contracts and bids with local construction companies.
We provide support tailored to each business type.
Services Offered (Partial List):
- Registering data with the Ministry of Investment
- Obtaining a Tax Identification Number
- Acquiring special permits (for construction businesses)
Procedures for Closing Local Subsidiaries and Representative Offices
When withdrawing from overseas operations, options include business transfer, share transfer, dormancy, liquidation, and capital reduction.
When considering withdrawal, it is essential to clear financial matters, address basic employee issues, complete administrative procedures, and evaluate potential liabilities. Additionally, tax audits are mandatory during withdrawal in Indonesia, so careful consideration of the timing and method is necessary.
We provide support by proposing suitable methods for execution.
Services Offered (Partial List):
- Drafting Articles of Incorporation and reporting to the Ministry of Law and Human Rights
- Publishing shareholder dissolution and liquidation notices in newspapers
- Deregistering data with the Ministry of Investment
- Handling tax audits
- Deregistering the Tax Identification Number