Representative office in Indonesia has been growing in the past recent years. The growth of this number is in line with the increasing number of foreign companies in Indonesia. Furthermore, the local government has been actively pursuing more foreign investments with the introduction of new regulations. It is evident in the recently introduced Omnibus Law that pushes for a more efficient and effective document and permits processings for foreign companies.
The local government is hoping that the relaxation in the regulations can be detrimental to foreign investors. Indonesia is a large market with roughly 270 million people, the lucrative market potential for foreign investors. The country is rich in resources and has seen a steady growth of foreign investments despite the peak of the pandemic in 2020 and 2021.
Nonetheless, according to the Asian Development Bank, the country is seeing a potential GDP growth of 4,8% in 2022. The growth is a further increase from 3,5% in 2021 and -2.1% in 2020. This positive growth shows that the country’s economy is a lucrative market for foreign investments. For sure, the Investment
Representative Office in Indonesia and Their Function
The Representative Office in Indonesia has various functions that serve as an intelligence gatherer for the headquarters. Unlike a foreign direct investment, a representative office is unable to conduct business transactions. However, they are eligible to do marketing activities to support the main company’s operations. Oftentimes, a representative office is set up in a country as a marketing channel to promote the product and services of the main company.
Another function of a representative office is to gauge possible competitors in the region. Competitors can be a great indicator of market potential. Therefore, the main companies usually establish a representative office to observe the potential buyers and the competitors in the market. Through these observations, the main company can acquire relevant data to help the company create the best strategy to penetrate the market.
Moreover, the representative office in Indonesia also functions as a support for the local clients. If the operation of the main company is abroad, the Indonesian buyers may find it hard to reach out to them. Thus, by having a representative office, the company can offer after-sales service to the local clients. These services will be detrimental for the company to create more repeat customers.
Benefits for Foreign Investments
Considering the functions of representative offices in Indonesia, there are a lot of benefits that foreign investments can get before delving into the market. With a representative office effectively acting as an intelligence gatherer, the main company abroad can make a data-based decision. Utilizing data acquired from market research is much more reliable and cost-effective for the company. The main company will be able to avoid unnecessary potential problems and reach their potential targets.
Furthermore, the data collected by the representative office in Indonesia is also crucial for the company’s business development strategy. Through their various marketing activities, the company can understand the type of product that is in demand. Knowing this is important to shape the product or service planning. Companies can utilise this knowledge and alter their products or services to suit the local needs.
A little bit separate from the marketing benefits, representative offices are also a cost-effective option for foreign companies to observe the target market. As they usually only require a small number of teams, renting a serviced office will be perfect for their needs. With a serviced office, the representative office already gains access to numerous office facilities. For example, high-speed internet, a fully furnished office suite, dedicated telephone number and forwarding service, and meeting rooms. Moreover, in a serviced office provider like MESO, a representative office in Indonesia will also get a bilingual receptionist service, a daily office cleaning, a floor manager, and 24/7 access and security.
For more information on serviced offices or representative office establishments in Indonesia, visit www.meso.co.id or send us your inquiry to +62812-1315-4189.