Are you planning to come to Indonesia to explore investment opportunities or to open a representative office? Does your business travel bring you to Indonesia regularly for extended business meetings?

Are you tired of the limitations of doing business through a hotel business center? Wouldn't you prefer to meet your clients and customers in a more traditional office setting? Wouldn't it be beneficial to have professional assistance as you begin to explore the intricate mazes of doing business in Indonesia.

Serviced offices offer a total service and facility package to visiting or residing business people. Whether you plan to spend one week, one month or one year in Jakarta ... conducting business from a serviced office offers many advantages.

Temporary Facilities

If you are planning to open a new office in Jakarta, the actual set-up of the office is a big task. Consider working initially from a serviced office, then you have time to hire staff who can then assist you in setting up your permanent offices.

Relax assured that you can begin working immediately ... and take the necessary time to find the most ideal location for your company as you become more familiar with Jakarta.

Permanently Housed in Serviced Offices

Traditional business facilities imply the commitment to a long-term office lease, buying of furniture, hiring of staff and setting up of office systems. This implies the availability of time, money and a commitment to a permanent structure. A more viable option for some firms may be the utilization of serviced offices.

Many representative offices prefer to stay long term in serviced office facilities. Their needs are not temporary, yet they find the excellent support and low overhead more suited to their needs that the establishment of an independent office.

Another advantage is the ability to expand and down size your office easily. If you need to bring in 3 extra expats to work in your office for 4 months, you can easily take on additional space with no hassle. If, on the other hand, your company decides to down size for a few months, you can let space go because in a serviced office you do not have to commit to a long term lease up front. They can provide exactly what space you need, when you need it.

Facilities

An office is more than a desk, chair and telephone. Yet someone has to go out and buy those basic furnishings before you can begin working. In serviced offices the space is already tastefully designed and fully furnished with furniture, computers, telecommunications equipment and whatever you require to fulfill your specific needs.

Layout options in serviced offices are flexible in order to fulfill the specific needs of your staff. Access to fully appointed board rooms and meeting rooms make it easy to meet clients and customers in an atmosphere of confidentiality.

Services

As those who have lived in Indonesia for some time know, it is difficult to find qualified bilingual secretarial staff. A search for an executive secretary and other assistants can be time consuming and distracts from the urgent need to begin working quickly. The newly arrived executive has a lot to accomplish on his agenda and it's so much easier to begin tackling the tasks with qualified people to help you from day one.

The support staff at serviced offices receive advanced training in the skills required to complete a wide range of office tasks. They are accustomed to meeting the needs of many different clients.

If you are in a meeting or away from your desk, the trained receptionist will accept your calls, answering the phone in the name of your company. If you travel a lot, you can ask the staff to hold mail and messages for you until your next arrival or they can also forward mail and messages to you as per your request.

Equipment

Today's modern office also requires facsimile, Email and teleconferencing in order to communicate on a regular basis with offices around the world. The basic typewriter has long since been replaced with computers, color printers and scanners. When setting up an office, it takes a sizable investment to purchase all the necessary equipment. In a serviced office, these productivity tools, and many more are already available for your use.

Some serviced offices also offer ISDN connections for their tenants. Instead of having to incur the high cost of this connection on your own, the line is shared with other tenants.

Location

Serviced offices are found in strategically located office buildings throughout the Central Business District and Golden Triangle. These facilities are in close proximity to the many clients and customers that you need to meet regularly.

The image your company portrays to clients and customers begins the minute they walk in the door of your office. By housing your business efforts in a serviced office ... your company shows permanence. You won't look like someone just flying in and out of Jakarta for a week each month to conduct business from a hotel, though in fact that may be exactly the case. Housed in a serviced office, you can proudly put a readily recognized prime business address on your business card, with the resultant impression of continuity.

Networking

One of the biggest advantages to working from a serviced office is that the professionals who run the office can refer you to other professionals who can provide the services your business needs.

From taxation, legal, management consulting, corporate advisory services, recruitment, insurance, market research, advertising, telecommunications, even commercial leasing and office design and fit out ... these referrals can help you find the assistance you need to establish your business in Jakarta with the minimum possible hassle.

You may be new to Jakarta, but the professionals who run serviced offices are well-established members of the business community who have made it their goal to provide you with the best possible services.

Cost

Reduce the costs of a large office and overhead by utilizing the shared resources of a serviced office. Flexible leasing plans in which you can use the facilities on a yearly, monthly, weekly or even daily basis can be negotiated. Discuss the available leasing options to determine what package best fits your needs.

Selecting a serviced office

Not all serviced offices in fact provide the same level of service. As you view potential sites, ask questions about cost, flexibility of terms, review the prestige attached to the location and query the condition of the equipment and facilities they are offering to be sure you are getting the best.

Talk with the secretarial staff and have them show you samples of their work so that you will have a good idea of their capabilities. Assess the receptionist and other staff you see as to their language capabilities, appearance and professionalism. Ask the Director about their network within the business community and what referral services they may be able to offer.

Comparing notes from the facilities you survey ... you will be able to decide which facility best fits your company's requirements. Won't it be great to walk into your fully equipped office on the first day of work with your support staff standing by -- so you can get to work!

Ever since Indonesia's independence, foreign companies have made major investments in Indonesia to develop its resources, build infrastructure, establish manufacturing facilities for export and/or provide products and services for the domestic market. The intricacies of setting up a company and making an investment in Indonesia are many. This article will serve as but a brief introduction to the topic.

Setting up Business Activities and a Company in Indonesia

This is referred to most commonly in Indonesia by its Indonesian acronym PMA, or Penanaman Modal Asing.

Representative Office

A Representative Office can be established depending upon the line of business and the necessary licenses issued by the related government department. The limitation of a Representative Office is that they are not allowed to conduct direct sales and cannot issue Bills of Lading.

Representative offices are set up primarily for marketing, market research, or as buying or selling agents. The related government ministries are:

• Representative Office from Ministry of Industry & Trade - for bilateral trade
• Representative Office from Ministry of Public Work - for consultant or contractor
• Representative Office from Ministry of Mining - for mining activities
• Representative Office from Ministry of Finance - for banking
• Representative Office from Investment Board (BKPM) - regional representative

• Letter of Intent - stating the intention of the company to establish a representative office
• Letter of Appointment - stating the appointment of the chief representative
• Letter of Statement - stating that the Chief Representative will follow Indonesian regulations

The three letters must be stamped by a notary public and approved by the Indonesian Embassy in the home country of the firm. Upon approval, the Indonesian Embassy will issue a Letter of Notification (Surat Keterangan). Upon completion of the four letters the process can continue to the related government ministry in Jakarta, to incorporate a fixed license for 2 years.

Other ministries require different types of letters.

Limited Liability Co or Perusahaan Terbatas (PT)

Foreign Direct Investment, most often referred to by its Indonesian abbreviation - PMA, is governed primarily by the Foreign Capital Investment Law No. 1 of 1967, amended by Law No. 11 of 1970. As a legal basis, the law is fairly accommodative to various deregulatory policies and measures to date, and those that will be taken by the government in the foreseeable future.

In addition to Investment Law No. 1/1967, PMA companies as well as other companies, in their business operations are still subject to sector/industrial policies as required by corresponding ministries.

Incorporation of PMA Company

• Allows 100% FDI investment in selected areas of business
• Limits foreign direct investment to 95%, with a minimum of 5% ownership by an Indonesian
• Allows FDI investment with certain conditions
• Stipulates the sectors which are closed to FDI investment

For those companies choosing to make a 100% foreign investment, there is a requirement that 15 years from the commencement of commercial operations, the 100% foreign shareholder must sell at least 5% of the firm to an Indonesian entity. A company which is initially 95% foreign owned is not subject to any divestment requirement.

The amount of capital to be invested in a foreign-owned company is decided by the investing parties themselves, and the BKPM approval is based on the economics and scale of the project. Foreign investment companies are basically free to choose where in Indonesia they will set up operations, with the proviso that factories must be in areas zoned for industry or in an industrial estate.

The life of foreign investment companies has been extended by allowing the renewal of the fixed operating license (IUT) for an additional 30 years. In other words, the initial licenses are valid for 3 years (SPPP BKPM), plus 2 x 30 years, for a total of 63 years.

The process of incorporation of a new foreign direct investment company:

Initial License (valid for 3 years)

Step 1. Prepare and send the application with required documentation, compiled according to the investment plan. Set up a joint venture agreement if you are making the investment with Indonesian partners.

Step 2. Obtain the Initial License (SPPP BKPM), valid for 3 years.

Step 3. Incorporation of SPPP BKPM

1. Establish Articles of Association with a Public Notary detailing proof of capital investment, and send it to the Ministry of Justice for approval and issuance of State Gazette
2. Registration of company address with local council (domicile)
3. IRD registration (NPWP + PKP)
4. Registration with the Department of Industry and Trade (TDP)

Step 4. Key expatriate positions (work permits)

Fixed Operating License (30 years)

Step 5. Prepare and send the 6-month report (LKPM) to the provincial BKPM office as well as UUG (HO) nuisance act to the regional office of BKPM

Step 6. Incorporate facilities - Master list/APIT or property ownership

Step 7. Provincial approval for Fixed Licenses (BAP)

Step 8. Fixed License (IUT) for 30 years is issued

A Limited Liability company is established either under foreign shareholders or through a joint venture with Indonesians or wholly owned by Indonesian shareholders and must be approved by the Ministry of Justice. It doesn't matter who is the owner of an Indonesian Limited Liability company, they must comply with Indonesian law and are considered an Indonesian company and the company can subsequently be changed or sold to the shareholders, foreign or Indonesian.

To get license of Change of Capital and Change of Owner the applications should be submitted to BKPM. According to BKPM, there's no charge to arrange licences.

Offshore Incorporation

In some situations, it may be to an investor's advantage to incorporate their firm offshore, while operations are carried out in Indonesia. The advantages and disadvantages of offshore usually focus on the facilities offered by tax havens in nations like Mauritius and the Cayman Islands. Your management consultant can assist you in making this important decision.

Taxation and Labor Law

Another important matter is the Taxation and Labor Law. It is compulsory to report taxes on a monthly basis and follow Indonesian labor law.

As you can see from this very brief introduction, the process is a complicated and lengthy one and can be a virtual mine field to those who are unfamiliar with dealing with Indonesian ministries. It is essential to acquire the advisory services of a professional investment consultant which specializes in assisting foreign companies who want to establish businesses in Indonesia.

Visas for Foreign Directors/employees

Applications for KITAS and KITAP, and other permits, should be submitted to:

Directorate General of Immigration
Jl. HR Rasuna Said Kav. 6-7
Jakarta Selatan, Indonesia
Phone : (62-21) 522-030

For further information, please visit www.imigrasi.go.id, or read our article on Visas and Documentation

Just as in your home country, joining a business association is a great way to learn more about what is going on in the local business community and to meet colleagues. In Jakarta, there are several well-established country-specific business associations with memberships of hundreds of business people.

Staying informed, learning about how Indonesian government rulings are affecting business, meeting new people and widening your business contacts is perhaps even more important in a foreign posting where the conditions that affect business will be unknown to a newcomer. Becoming involved and setting up a good network will benefit you in many ways.

Below is a listing of contact information for expatriate business associations. We encourage newcomers to contact their national association and learn about what services they offer.

American Chamber of Commerce in Indonesia (AmCham)
World Trade Center, 11th floor
Jl. Jend. Sudirman Kav. 29-31
Jakarta Pusat, Indonesia 12920
Tel. (62-21) 526-2860
Fax (62-21) 526-2861
Email info@amcham.or.id
Website www.amcham.or.id
Joe Bartlett, President
Mark Smith, Executive Director
Membership - 400

Indonesia-Australia Business Council (IABC)
World Trade Center, 11th Floor
Jl. Jend. Sudirman Kav. 29-31
Jakarta 12920 Indonesia
Tel (62-21) 521-1540
Fax (62-21) 521-1541
Email secretariat@iabc.or.id
Website Indonesia Australia Business Council (IABC)
Mr. S.D. Darmono, President
Mr. Vic Halim, Executive Director
Membership - 200

British Chamber of Commerce in Indonesia (BritCham)
Wisma Metropolitan I F/15
Jln. Jend. Sudirman Kav. 29 - 31
Jakarta 12920
Indonesia
Tel. (62-21) 5229453
Fax (62-21) 5279135
Email bisnis@britcham.or.id
Website www.britcham.or.id
Chairman, Malcolm Llewellyn
Executive Director, Chris Wren
Membership - 800

Indonesia Canada Chamber of Commerce (ICCC)
Sampoerna Strategic Square
South Tower 17th floor
Jl. Jend. Sudirman Kav 45
Tel. (62-21) 2555-2243
Fax (62-21) 5795-1177
Email ediccc@cbn.net.id, iccc@cbn.net.id
Website www.iccc.or.id
Mr. David Beynon – President ICCC
Vita Antasari – Executive Director

Danish Business Council
Jl. Kencana Permai V no 15
Pondok Indah, Jakarta Selatan
Tel. (62-21) 750-3204
Email michael@wivvies.com
Website www.dba.co.id
Jakob Friis Sorensen and Michael Lundager
Membership -

Finnish Business Council
Embassy of Finland, Menara Rajawali, 9th floor
Jl Mega Kuningan, Lot 5.1, Kuningan, 12950 Jakarta
Tel. +62-21-576 1650
Email sanomat.jak@formin.fi
Website www.finland.or.id
President Risto Poskiparta
Membership: 23

Indonesian French Chamber of Commerce and Industry (IFCCI)
Jalan Wijaya II No. 36
Kebayoran Baru, Jakarta 12160
Tel. (62-21) 739-7161
Fax (62-21) 739-7168
Email contacts@ifcci.com
Website www.ifcci.com
President: Mr. Alain-Pierre Mignon
Director: Nora Guitet
Membership - 130

German Indonesian Chamber of Commerce & Industry (EKONID)
Jl. H. Agus Salim No. 115
Jakarta 10310 Indonesia
(P.O. Box 3151/JKT, Jakarta 10031)
Tel. (62-21) 315-4685
Fax (62-21) 315-5276
Email info@ekonid.or.id
Website www.ekonid.com or www.ekonid.org
Mr. Jan Rönnfeld, Director
Membership - 530

Economic Association of Indonesia and India (ECAII)
Intarti (Iin)
c/o PT Tripar Multivision Plus
Komplek Perkantoran Roxy Mas Blok C2 No. 27-34
Jln. K.H. Hasyim Ashari Kav. 125B
Jakarta Pusat – 10150
Tel. +62-21-6335050 Ext 219, +62-21-6324329
Fax +62-21-6324370
Website www.ecaii.org
Chairman Marzuki Usman
Membership - 80

European Business Chamber of Commerce in Indonesia (Eurocham)
World Trade Center, 8th Floor
Jl. Jend. Sudirman Kav. 29-31
Jakarta 12920
Phone (62 21) 521-1650
Fax (62 21) 521-1651
Email info@eurocham.or.id
Website www.eurocham.or.id
General Manager, Patrik Jonasson
Membership - 110

India Indonesia Business Association
Gopaal Ahuja
Email i2b@vsnl.com

Italian Business Association Indonesia (IBAI)
Wisma BRI II, 15th Floor, Suite 1501
Jl. Jend. Sudirman No. 44-46
Jakarta 10210 Indonesia
Tel. +62 (21) 571-3540
Fax +62 (21) 571-9013
Email luigicarlo.gastel@pirelli.com
Dr. Luigi Carlo Gastel, President

Japan External Trade Organization (JETRO)
Summitmas I, 6th Fl.
Jl Jen. Sudirman Kav. 61-62
Jakarta 12190 Indonesia
Tel. (62-21) 520-0264 / 5251-3650
Fax (62-21) 520-0261
Email
Website www.jetro.or.id
Mr. Kusaoke Sadonoobu
Membership -

Korea Trade Investment Promotion Agency (KOTRA)
Wisma GKBI, 21st Floor, Suite 2102
Jl. Jend. Sudirman Kav. 28
Jakarta 10210
Tel. 62-21-574-1522
Fax 62-21-572-2187, 572-2204
Email kotrajkt@kotra.or.id
Website www.kotra.or.id
Kim Jae Han, Director General

Indonesian-Netherlands Association (INA)
Indonesian-Benelux Chamber of Commerce
Menara Jamsostek, Tower A - 20th floor, Room 2002
Jl. Jend. Gatot Subroto No. 38
Jakarta 12710
Tel. (62-21) 5290-2177
Fax. (62-21) 5290-2178,
Email ina@ina.or.id
Website www.ina.or.id
Mr. Elmar Bouma, Director
Membership -

Indonesian Norwegain Business Council
c/o Tirta Samudera Caraka
Cordova Tower, Lt. 2
Jl. Pasir Putih Raya Blok E No. 3
Ancol - Jakarta Utara 14430
Tel. 62-21-645 7624
Fax 62-21-645 7628
Email inbc_sec@ inbc.or.id
Website www.inbc.or.id
Mr. Tor Fjæran, President
Membership -

Swedish Business Association in Indonesia
Swedish Business Association c/o Embassy of Sweden
Menara Rajawali, 9th floor 3, Mega Kuningan Lot #5,1
Kawasan Mega Kuningan Jakarta 12950
Fax (021) 4261033
Email michael_olsson@bmolsson.net
Website www.sba.or.id
Mr. Michael Olsson, Secretary
Membership - 36

Taiwan Business Club
Jl Raya Kelapa Hibrida Block QH
Kelapa Gading
Jakarta 14240 Indonesia
Tel. (62-21) 451-3525
Fax (62-21) 451-3524
Email tbcjkt@indosat.net.id
Website
Mr. Frank Lee, Director
Membership -

Indonesian Business Associations Overseas

American-Indonesian Chamber of Commerce (AICC)
317 Madison Ave., Suite 1619
New York, NY 10017 USA
Tel. (212) 687-4505
Fax (212) 687-5844
Email aiccny@bigplanet.com
Website www.aiccusa.org
Mr. Wayne Forrest, Executive Director
Membership - 195

Australia Indonesia Business Council (AIBC)
Website www.aibc.com.au

Indonesia New Zealand Business Community
Website www.indonz.com

For national groups not listed above, we suggest you contact the appropriate embassy to see if they have a formal or informal national business association.

For expatriate business assocations outside Jakarta please see the individual pages under Expat Living Outside Jakarta

If you know of other expatriate business associations that we don't have listed above, please let us know so we can add them to the list.