Exploring the company potential of a market before making tremendous investments is ordinarily a fantastic option. It's particularly true to foreign companies that are deemed as a significant risk but are profitable in the long term.
An Indonesia representative office can also be permitted to work as a liaison office of its parent company from overseas, especially during the negotiation prices.
Additionally, it performs extensive market research and feasibility analysis. However, this office isn't permitted to enter into any business contract as it's illegal to conduct activities that are"commercial" in nature.
In line with the Accounting Corporate Regulatory Authority, a representative office isn't negotiated as a legal trading entity but only an administrative arrangement that's only permitted to run the following actions: oversee the actions of its parent firm's local distributors and agents; establish business contacts for its principal office; supply customer support service except those that involve technical and repair services, and conduct market research.
On the other hand, these are the actions an Indonesia representative office isn't permitted to perform: rent warehouse facilities; supply products or services for charges and other profit-generating undertakings; enter into legal contracts and agreements; and shop and ship products in Indonesia.
Since the foreign company's representative office is prohibited from storing and shipping products to Indonesia, they ought to request local brokers to do such tasks on their behalf.