Establishing a Representative Office of Foreign Electricity Support Service Companies (JPTLA) in Indonesia is a significant opportunity for foreign business entities involved in electricity-related services. Governed by Government Regulation No. 25 of 2021, this framework allows foreign entities to operate in Indonesia under specific guidelines and conditions.
Also read: The Types of Representative Offices in Indonesia
What is JPTLA?
JPTLA refers to foreign representative offices set up by businesses or individuals specializing in electricity support services. These companies must obtain a business license and a Business Entity Certificate (SBU) to legally engage in activities related to electrical infrastructure and services within Indonesia.
Also read: What is KPPA in Indonesia and How to Open One
Types of Business Activities Allowed for JPTLA
According to Government Regulation No. 25/2021, The foreign office is permitted to undertake high-value electricity support activities, including consultancy, installation, and maintenance.
Consultancy in Electricity Installations
Foreign entities can provide consulting services in the field of electricity installations, including the planning, design, and advisory services for electrical projects.
Construction and Installation of Electrical Installations
JPTLA can handle large-scale construction and installation projects for electrical infrastructure. The projects must meet a minimum value of IDR 100 billion to qualify.
Maintenance of Electrical Installations
Maintenance services for existing electrical installations are also permitted, with consultancy work in this area requiring a minimum value of IDR 10 billion.
Also read: The Limitations of Representative Office in Indonesia
Compliance and Licensing Requirements
Foreign businesses seeking to set up a representative office must comply with essential licensing regulations and requirements:
- Business Licensing: Foreign representative offices must obtain a business license for their supporting electricity services. Without this license, companies are subject to heavy fines amounting to 20% of the contract value for non-compliance.
- Business Entity Certificate (SBU): This certificate ensures that the foreign company is officially recognized as a qualified business entity within Indonesia’s electricity support sector.
- Non-Tax Revenue: The licensing process is subject to administrative fees governed by Indonesia’s non-tax state revenue regulations.
Also read: BUJKA in Indonesia: Definition and It’s Requirements
Requirements for JPTLA Operations
Foreign companies wishing to establish a JPTLA must meet the following criteria:
- Large QualificationsThe company must be of significant size and have the capacity to handle large-scale electricity projects in Indonesia.
- Collaboration with Local EntitiesJPTLAs must form joint operations with domestic electricity support service businesses to promote local collaboration.
- Employment of Indonesian WorkersPriority must be given to hiring Indonesian workers over foreign workers. The representative office must also appoint an Indonesian citizen as the person in charge of the office.
- Preference for Domestic ProductsThe company must prioritize the use of local products and services wherever possible.
- Advanced Technology and Local WisdomThe foreign company is required to possess high-tech, efficient, and environmentally friendly technology, while also respecting local wisdom and cultural considerations.
- Technology TransferJPTLA is expected to implement a technology transfer process, sharing their expertise and advanced technology with Indonesian partners.
Also read: KP3A in Indonesia: Types and Requirements
Use of Foreign Workers and Penalties
The employment of foreign workers in JPTLA is closely monitored by Indonesian authorities. Foreign engineers who do not have a competence certificate in the electricity sector are subject to fines. For example, those working without certification in electricity supply companies may face penalties of IDR 90 million, while those in electricity support service entities may be fined IDR 150 million.
The Ministry or governor will provide guidance and supervision concerning the use of foreign workers in these offices, ensuring compliance with national labor laws.
Reminder: Legal Compliance
Foreign companies interested in setting up a Representative Office of Foreign Electricity Support Service Companies (JPTLA) in Indonesia must carefully adhere to the legal requirements outlined in Government Regulation No. 25 of 2021. Key areas of focus include obtaining the necessary licenses, partnering with local entities, prioritizing Indonesian workers, and ensuring the use of advanced technology.
It is crucial for foreign companies to ensure they meet all the necessary legal requirements to avoid fines and sanctions. JPTLA plays an essential role in contributing to Indonesia’s electrical infrastructure development, but compliance with the country’s regulations is mandatory.
When establishing a business in Indonesia, including a JPTLA, foreign companies must ensure they fully comply with all legal requirements, including obtaining the necessary licenses and certificates. Failure to comply can result in significant fines and penalties, which could harm the business’s operations. Consulting with local legal experts is highly recommended to navigate Indonesia’s regulatory environment effectively.
Also read: Set Up Representative Office in Indonesia: 2024 Complete Guide
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