Yes, a Representative Office (KPPA) can legally open a bank account in Indonesia, and doing so is a vital step in ensuring smooth operations. While these offices are not allowed to engage in direct commercial activities, maintaining a local bank account enables them to handle essential expenses like employee salaries, office rent, and compliance-related payments.
Understanding the Role of Bank Accounts for Representative Offices
A Representative Office serves as a non-commercial presence for a foreign company. It facilitates market research, promotional activities, and liaison functions, but it cannot issue invoices or generate revenue in Indonesia.
However, without a local bank account, even basic operational tasks would be impossible. Paying office rent or covering monthly payrolls requires access to the local banking infrastructure. That’s why Indonesian regulations explicitly allow KPPAs to open and maintain bank accounts.
Legal Foundations: Bank Account Permissions
The right to open a bank account stems from BKPM Regulation No. 5 of 2019, which governs foreign investment activities. Under this regulation, KPPAs are permitted to maintain a local corporate account provided it’s used solely for non-revenue-generating purposes.
This regulatory clarity is reinforced by other agencies such as Bank Indonesia (BI) and the Financial Services Authority (OJK), which supervise account openings under anti-money laundering and corporate due diligence policies.
Also read: Annual Compliance Requirements for Representative Offices in Indonesia (Tax and Non-Tax)
Required Documents for Account Opening
Opening a bank account in Indonesia for a KPPA involves several standard procedures and documents:
- Business Identification Number (NIB) from the OSS system
- Tax Identification Number (NPWP). Check: Does a Representative Office in Indonesia Need a Tax ID (NPWP)?
- Chief Representative’s passport/KITAS
- Parent Company’s Articles of Association
- Letter of Domicile (e.g., tenancy agreement)
- Representative Office license (KPPA)
Some banks may request additional documentation based on internal compliance standards. Most banks also require the physical presence of the Chief Representative during account opening.
Also read: Required Licenses and Permits for a Foreign Representative Office in Indonesia
Step-by-Step Account Opening Process
- Choose a Bank – Options include Bank Mandiri, BCA, and BRI.
- Document Submission – Submit the full set of compliance documents.
- Verification – Bank officers validate your identity and documents.
- Deposit Minimum Balance – Varies per bank, often between IDR 1–10 million.
- Account Activation – Account becomes operational, often with internet banking.
While the process can be completed in a few business days, delays can occur due to document issues or internal review processes.
Operational Limitations
Having a bank account does not mean the office can operate as a fully functional business. KPPAs cannot:
- Earn income locally
- Conduct sales or issue invoices
- Engage in any profit-generating activity
The account must solely support internal operations such as:
- Salary payments
- Rent and utilities
- Market surveys or research expenses
Violations can lead to license revocation and reputational risk for the parent company.
Also read: The Limitations of Representative Office in Indonesia
Who Regulates This Process?
The following authorities oversee and enforce banking and KPPA-related activities:
- BKPM (Indonesia Investment Coordinating Board)
- OJK (Financial Services Authority)
- Bank Indonesia (BI)
Together, they ensure that foreign entities operate within their defined legal scope and maintain financial transparency.
InvestinAsia Helps You Set Up Seamlessly
Setting up a Representative Office—and ensuring its banking compliance—can feel overwhelming. InvestinAsia’s Indonesia Representative Office Setup Service provides complete support from regulatory filings to bank account openings. With years of experience and local insight, we ensure you remain compliant, efficient, and ready to operate smoothly.
Don’t navigate Indonesia’s regulatory system alone. Let InvestinAsia be your trusted partner in market entry.
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Common Questions (FAQs)
Can a KPPA receive payments from Indonesian clients?
No. KPPAs are not allowed to receive payments or revenue from within Indonesia.
Is a bank account mandatory for a Representative Office?
Yes. It’s required to pay for office expenses, payroll, and local operational needs.
Can the Chief Representative open the account remotely?
Rarely. Most banks require the Chief Representative to be physically present.
How long does it take to open the account?
The account opening process typically takes between 2 to 10 business days, depending on the completeness of the documents and the bank’s internal procedures.
