Companies may expand their business to different regions. Through this expansion, sometimes a branch office is needed. Yes, opening a branch office is one way to expand the reach of the business being run. Many large companies have opened branch offices in various regions. The opening of this branch office can be done by Foreign Investment companies (PMA) or by Domestic Investment companies (PMDN). Well, does Friend KH also have a bigger business development plan in the future by opening a company branch office? If so, then you are on the right page because this time, we will discuss the provisions, requirements, and procedures for opening a company branch office. Listen to the end, yes!
What is a Branch Office?
Before discussing further about the provisions, requirements, and procedures, KH pals need to first understand what is called a branch office. A branch office is a subsidiary of a parent company that has a different location from the head office. Therefore, the branch office is directly responsible to the head office. Likewise, the organizational structure and all activities carried out by the branch office are inseparable from the head office. By establishing a branch office, it is hoped that the company will be able to expand its market reach in order to become a more developed company.
Branch Office Duties and Responsibilities
Branch offices have the duty and responsibility to serve customers who are in an area. That way, customers will feel facilitated by the company because they do not need to go to the head office which is sometimes far from where they live. In addition, branch offices are also tasked with expanding the reach of the business being run. With a branch office, it is likely that a new market share will be formed so that it can increase the company’s overall turnover. For example, branch offices of all banks are responsible for serving customers in an area. That way, customers do not have to go to the distant head office to get services from the bank, just visit the nearest branch office. Another example is a branch office for a media company. When a media company opens a branch office in an area, the office is responsible for providing news that occurs in the area. That way, the media’s market reach will expand because it can reach the local market.
What are the Conditions for Opening a Branch Office in Indonesia?
Now you understand what a branch office is, including its duties and responsibilities. Now, when opening a branch office, you must pay attention to the provisions in the Investment Coordinating Board Regulation No. 13 of 2017 concerning Guidelines and Procedures for Licensing and Investment Facilities (PBKPM 13/2017) and the provisions for branch offices stipulated in Article 45 of PBKPM 13/2017, as follows;
- PMA/PMDN companies may open branch offices throughout Indonesia which are units or parts of their parent companies. The branch office can be located in a different area from the parent company and can be independent or in charge of carrying out some of the tasks of the parent company.
- PMA/PMDN companies whose licenses are under the authority of the central government and will open a branch office report the plan to the central One Stop Integrated Service (PTSP) at the Investment Coordinating Board (BKPM).
- PMDN companies whose licenses are under the authority of the local government that will open a branch office report the branch opening plan to the Provincial One-Stop Integrated Service Investment Office (DPMPTSP).
Terms and Procedures for Opening a Branch Office
In order to open a branch office, companies must fulfill a number of requirements. As listed in the first attachment of PBKPM 13/2017, here are some of the requirements:
- Deed and Decree of Parent Company
- Parent Company NPWP
- Parent Company Business License
- Deed of opening branch office and appointment of branch office head
- ID card and TIN of the head of the branch office
- A statement letter about the business location of the branch office
- In case of change of branch office, attach:
- Branch office licenses held
- Branch office activity realization report
- Supporting documents for change
After completing these requirements, KH Buddy can submit an application for opening a branch office online through the Electronic Investment Information and Licensing Service System (SPIPISE). Furthermore, the branch office opening will be issued in the form of a certificate with a digital signature. The certificate will be in the form of a formal PDF and comes with an acknowledgment sheet. The branch office opening will be issued within a maximum of three working days from the receipt of a complete and correct application. The application can be rejected by the Head of BKPM, Head of Provincial DPMPTSP, Head of Regency / City DPMPTSP, Administrator of Special Economic Zones (KEK), Head of the Entrepreneur Agency or a designated official making a rejection letter no later than five working days.
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This is the explanation of a company branch office, starting from the definition, duties and responsibilities, to the requirements and procedures for establishing it. Is Buddy KH also interested in opening a branch office of your company, but still confused or don’t have time to take care of the establishment and legality? Don’t worry, Kontrak Hukum can help you!
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As a digital legal platform, we provide branch office establishment services including the required legal documents for only Rp3 million! Let’s facilitate your business expansion through a branch office by visiting the KH Services – Branch Office Establishment page. If you have questions about your company or other business needs, you can also contact us at Ask KH or via direct message (DM) to Instagram @kontrakhukum.
