Expanding into new markets is one of the strategic steps to boost business growth. One effective way to do this is by setting up a branch office in a new region. By establishing branch offices, companies can strengthen their presence in the new region, reach more customers, and operate closer to key business hubs. Whether it’s to tap into emerging opportunities, improve customer service, or enhance operational efficiency, setting up branch offices can bring long-term advantages.
In this article, we will explore what a branch office is and the process to set up branch offices in Indonesia.

What is the Meaning of Branch Office?

A branch office is a physical location of a company that is separated from the main headquarters but is not a separate legal entity. It operates as a part of the parent company and has no independent legal status. The parent company is responsible for the branch office’s operations, liabilities, and actions.
Companies establish branch offices to provide local presence, customer support, and regional operations. It’s common in banking and retail industries where companies need to maintain closer relationships with their customers while still being controlled by the head office. Branch offices also enable market expansion to other regions while maintaining centralized control over business processes.

How Does Branch Office Work?

Branch offices serve as an extension of a company’s head office. They operate in different physical locations but under the same legal entity. The purpose of branch offices is to carry out local business operations to serve customers or execute regional operations while remaining under the control of the head office.
Branch offices  have a branch manager and staff who handle day-to-day activities such as sales, customer service, and local marketing. However, strategic decisions, major financial management, and policy enforcement are directed by the head office. The branch manager is responsible for managing branch offices and reports regularly to the head office.

Branch Office vs Representative Office vs Subsidiary: What are Their Differences?

Branch offices, subsidiaries, and representative offices are the types of offices companies use to establish a presence in a new market. But all of them have different legal statuses, levels of control, and operational scopes.

Branch offices serves as an extension of the parent company in the local market. However, it’s not considered a separate legal entity. It operates under the parent company’s name to engage in commercial activities. The parent company also retains full liability and is responsible for all debts and obligations of the branch. 

It operates with managerial autonomy and is responsible for its own debts and liabilities. The parent company usually holds a majority of the subsidiary’s shares. This type of office is suitable for long-term business presence with greater local adaptation and legal protection from the parent company.

Unlike branch offices or a subsidiaries, representative offices doesn’t conduct commercial activities. It is mainly used for activities such as market research, promotional campaigns, and brand awareness. It cannot engage in profit-making or direct commercial operations. This type of office is good to test the market with low risk before committing to full operations.

How to Set Up a Branch Office in Indonesia?

Many companies set up branch offices in new markets to expand operations and establish a presence. One target market for establishing a branch office is Indonesia. Let’s explore the procedures to build a branch office in Indonesia:

Determine Eligibility

The first step is determining eligibility to open branch offices in Indonesia. You need to confirm whether your business sector is allowed to have a branch office. Some sectors may be restricted or require additional licenses to establish a branch office.

Prepare Required Documents

Next, prepare the documents needed to register your branch office. The documents are:

• The parent company’s Certificate of Incorporation and Articles of Association
• Letter of Appointment for the branch representative in Indonesia.
• Power of Attorney for signing official documents.
• Copy of passport or ID of the appointed representative.
• Business plan or description of activities to be conducted by the branch office.
• Proof of office address or lease agreement for the branch office’s physical location.

Register with the Online Single Submission (OSS) System

You can register your branch offices through the Online Single Submission (OSS) system operated by the Investment Coordinating Board (BKPM). Go to the OSS website (https://oss.go.id) and create an account if you haven’t already. Submit the details and the documents of the parent company and branch offices. All foreign documents must be translated into Indonesian by a sworn translator and legalized by the Indonesia embassy in the origin country. After registering, you will get a Business Identification Number (NIB). 

Obtain Additional License

Depending on the sector or industry, you might need to secure more licenses to support your branch offices. These additional licenses ensure your branch offices can operate legally. For example, branch offices of a company in the financial and banking sector require approval from the Financial Services Authority. These licenses are often obtained after the Business Identification Number is issued.

Register for a Tax Identification Number

Next, obtain a Tax Identification Number (NPWP) for your branch office. The NPWP identifies your branch as a taxable entity and allows you to fulfill your tax obligations. You need to visit the local tax office that oversees your branch’s business address.

Run Your Branch Office Smoothly with a Professional Serviced Office from Effist

Expanding your business through a branch office becomes easier with the right workspace solution. Effist Suite Office offers premium serviced offices to support your branch office’s business operations. Each of our offices is fully equipped with modern workstations, high-speed internet, meeting rooms of various sizes, a business lounge, a pantry, and secretarial and cleaning services. Located in two strategic locations —Office 88 Kota Kasablanka and Gandaria 8 Office Tower —you can build a professional presence and gain easy access to clients and partners.

With our all-in-one office solutions, you can save time, reduce setup costs, and focus entirely on managing your business. Whether you’re a multinational company expanding regionally or a startup exploring new opportunities, Effist Suite Office ensures your branch office operates efficiently and professionally from day one.
For more information regarding our serviced office, contact us via email contact@effist.com. 

Editor: Trie Ayu Feminin & Irnadia Fardila