Opening branch offices under a PT PMA are legally recognized operational extensions of an existing foreign-owned company in Indonesia, allowing business activities in multiple locations without forming a new legal entity. A PT PMA branch office operates under the same legal identity, ownership structure, and paid-up capital as the parent company, while remaining fully compliant with BKPM and OSS-RBA regulations. This structure is the preferred expansion model for foreign investors seeking fast market entry, lower setup costs, and centralized corporate control. Branch offices under a PT PMA are commonly used for commercial operations, regional representation, and project-based activities across Indonesia, provided they align with the approved KBLI classification and investment thresholds.
In this guide, we walk you through the legal framework, licensing steps, tax implications, and compliance obligations for opening branch offices under a PT PMA, based on current Indonesian regulations and practical implementation.
Understanding Branch Offices Under a PT PMA
A branch office is not a standalone company. It is an operational extension of your PT PMA and shares the same legal identity, capitalization, and ownership structure. This means you do not need to inject new paid-up capital or appoint a separate board.
From a regulatory perspective, branch offices are governed primarily by BKPM Regulation No. 13 of 2017 and processed through the SPIPISE system. Operationally, a branch can conduct business activities aligned with the parent company’s KBLI classification, either serving a local market or supporting centralized operations.
Compared to subsidiaries, branch offices are faster to establish, cheaper to maintain, and easier to control directly from the parent company.
Also read; Complete Guide to Relocating a Foreign Company to Indonesia
Legal and Regulatory Framework
The approval authority for branch offices sits with BKPM, while the parent PT PMA must already be legally established through the Ministry of Law and Human Rights and licensed via the OSS-RBA system. Your business activities must fall within the Positive Investment List and comply with sector-specific rules.
Although branch offices do not require new capital, the parent PT PMA must meet the minimum investment threshold of IDR 10 billion per KBLI per location. This requirement is assessed at the parent level, not per branch.
If you are still at the stage of structuring or registering your PT PMA, this is where our PT PMA registration service becomes relevant. We assist foreign investors in setting up compliant legal structures that allow future branch expansion without regulatory friction.
Check: Why Foreign Investors Choose InvestinAsia for PMA Registration in Indonesia
Prerequisites Before Opening a Branch Office
Before applying for a branch office under a PT PMA, the following prerequisites must be fulfilled:
Active PT PMA Status
- The parent company must be a legally established PT PMA.
- Approval must be issued by the Ministry of Law and Human Rights.
- The company must hold a valid Business Identification Number (NIB) through OSS-RBA.
Approved Business Classification (KBLI)
- The intended branch activities must fall under the same KBLI as the parent PT PMA.
- The KBLI must be listed in the Positive Investment List and allowed for foreign ownership.
Investment Threshold Compliance
- The parent PT PMA must meet the minimum investment requirement of IDR 10 billion per KBLI.
- This investment requirement is assessed at the company level, not per branch office.
Appointment of Branch Office Head
- A branch head must be officially appointed.
- Indonesian nationals must provide a valid KTP.
- Foreign nationals must hold a valid KITAS and work permit, if applicable.
Valid Business Address
- The branch office must have a registered address in Indonesia.
- A physical office is mandatory for most KBLI classifications.
- Virtual offices are permitted only if explicitly allowed under the applicable KBLI and zoning regulations.
Parent Company Compliance Status
- The PT PMA must be compliant with tax filings and OSS reporting.
- Regular LKPM investment reports must be up to date.
Also read: LKPM Reporting for PMA / Foreign Companies in Indonesia
Step-by-Step Branch Office Registration Process
The registration of a branch office under a PT PMA follows these structured steps:
Preparation of Corporate Documents
- Articles of Association of the parent PT PMA.
- Latest company licenses and NIB.
- Board resolution approving the establishment of the branch office.
Drafting and Notarization of Branch Office Deed
- Preparation of a notarial deed stating the branch office establishment.
- Inclusion of branch address, business activities, and authority of the branch head.
- Signing before a licensed Indonesian notary.
Submission Through SPIPISE System
- Online application submission via the SPIPISE platform.
- Upload of all required corporate and supporting documents.
- Selection of branch location and operational scope.
BKPM Review and Approval
- Administrative review by BKPM for regulatory compliance.
- Verification of business activities and investment alignment.
- Issuance of branch office approval certificate upon acceptance.
Tax Registration for Branch Office
- Registration of a separate NPWP for the branch office at the local tax office.
- Classification of the branch as a permanent establishment for tax purposes.
Post-Approval Operational Setup
- Opening of a branch bank account, if required.
- Employee registration and BPJS enrollment.
- Integration of branch accounting into the parent company’s financial system.
Tax Registration and Compliance
Each branch office must register separately with the local tax office and obtain its own NPWP. For tax purposes, a branch office is treated as a permanent establishment. Income generated by the branch is taxable in Indonesia at the standard corporate rate, with additional branch profit tax applying when profits are remitted abroad.
Branches must maintain separate accounting records, file monthly tax payments, submit annual tax returns, and report investment activities through quarterly LKPM filings.
Also read: Branch Profit Tax in Indonesia: A Guide for Foreign Businesses
Operational Readiness and Ongoing Compliance
After approval, you should complete banking arrangements, employee registration, BPJS enrollment, and internal accounting systems. Although the branch operates independently day to day, its financials are consolidated into the parent company’s reports.
Regular compliance with tax, labor, and investment reporting is essential to avoid sanctions or license revocation.
When You Do Not Yet Have Legal Business Legitimacy
Many foreign investors approach us with expansion plans before establishing a legal presence in Indonesia. If you do not yet have a PT PMA, opening branch offices is not legally possible. In this case, a complete company registration becomes the first step.
We provide end-to-end Indonesia company registration services, covering entity setup, licensing, tax registration, and long-term compliance, so you can expand with confidence when the time is right.
Contact us now for FREE consultation!
Frequently Asked Questions
Can a PT PMA open multiple branch offices in different cities?
Yes. A PT PMA can open multiple branch offices across Indonesia, each registered separately through BKPM.
Does a branch office need separate paid-up capital?
No. Branch offices use the parent company’s capital and do not require new capital injection.
How long does it take to open a branch office?
On average, three to eight weeks, depending on document readiness and location requirements.
Is a branch office allowed to generate revenue?
Yes. A branch office can conduct full commercial activities within the scope of the parent company’s license.
Is a virtual office allowed for branch registration?
Only for specific KBLI classifications. Manufacturing and trading activities require physical premises.
