Representative Office to PT PMA: How to Make the Move
Representative office to PT PMA in Indonesia: why it means a new company, what the office may do meanwhile, and how it is closed.
References (3)
- UU No. 25 Tahun 2007 on Investment — Article 5(2): foreign investment takes the form of a limited liability company under Indonesian law, unless a law provides otherwise
- Peraturan Menteri Investasi dan Hilirisasi/Kepala BKPM No. 5 Tahun 2025 — in force 2 October 2025. Article 1 points 56–57 and 72, Article 24(3) (the kinds of representative office), Article 270(3)–(4) (what a KPPA and its head may do), Articles 294(1) and 295(1) (the six-monthly LKPM), Articles 355–356 (closing a representative office through OSS)
- PMK No. 81 Tahun 2024 — in force 1 January 2025. Article 1 point 35 (a foreign company's representative office is a Badan for tax), Articles 46–47 (deleting a Badan's tax number)
Moving from a representative office to PT PMA status in Indonesia means setting up a PT PMA (Penanaman Modal Asing), a foreign-owned limited liability company, alongside the office.
Foreign investment takes the form of a PT, a limited liability company under Indonesian law, unless a law provides otherwise (the Investment Law, UU No. 25 of 2007, Article 5(2)). The PT PMA is set up alongside the office, and the office is closed when you are ready. The office provisions used below are in Investment Minister/BKPM Regulation No. 5 of 2025, in force 2 October 2025, and article numbers below refer to it unless another regulation is named.
What the representative office may do in the meantime
A foreign company’s representative office, the KPPA (Kantor Perwakilan Perusahaan Asing), may prepare the set-up and growth of a PT PMA in Indonesia (Article 270(3)(b)). It can also supervise, liaise, coordinate and look after the interests of the parent or its affiliates (Article 270(3)(a)).
Limits that apply
The KPPA cannot earn income from Indonesian sources or take part in managing a company, subsidiary or branch in Indonesia (Article 270(3)(d)–(e)). And its head may not also be a director of a company (Article 270(4)(d)), which is worth having in mind when you choose the PT PMA’s directors.
Two ways to order the move
Run both for a time
The office carries on within the limits above alongside the PT PMA, and keeps filing its six-monthly investment activity report (Laporan Kegiatan Penanaman Modal, LKPM) (Article 295(1)).
Close when the PT PMA is ready
Once the PT PMA is in place, the office is closed through the online licensing system (OSS), as set out below.
How much capital the new company needs is in PT PMA capital requirements, how the two forms compare is in types of company in Indonesia, and what goes into the LKPM is in LKPM reporting mistakes to avoid.
Closing the representative office
The same route applies to a KPPA and to a foreign trading company’s representative office, the KP3A (Kantor Perwakilan Perusahaan Perdagangan Asing) (Articles 355–356). The head of the office applies through OSS, after validating in the system the head’s identity, the office’s tax number and its latest LKPM. The ministry or agency responsible verifies the application within three working days and, where it is in order, revokes the licence (Article 356).
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Latest LKPM in place
The report for the most recent period is in OSS before the application.
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Apply through OSS
With a statement that the office has no debts or receivables with others in Indonesia, and the parent directors' instruction to close it.
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Verification
The ministry or agency checks the application and, if it is in order, revokes the licence.
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Tax number
The office can apply to have its tax number deleted, and the tax office decides after an examination.
For tax, a foreign company’s representative office counts as a Badan, a taxable entity, so it can apply to have its tax number deleted. The tax office decides after an examination (Finance Minister Regulation (PMK) No. 81 of 2024, Article 1 point 35 and Articles 46–47).
How MAM helps
MAM sets up representative offices, both KPPA and KP3A, and PT PMA companies. We can set up the PT PMA and close the representative office, depending on how you want to proceed. We also arrange work and stay permits for foreign staff of the PT PMA.