The Licencing of Representative of a Foreign Trading Company

(Decree of the Minister of Industry and Trade No. 402/MPP/Kep/11/1997
dated November 3,1997)

 

THE MINISTER OF INDUSTRY AND TRADE

Considering: - etc.

DECIDES :
To revoke :
The Decree of the Minister of Trade No. 78/Kp/III/78 dated March 9. 1973 on the licencing of representative of foreign trading company.

To stipulate :
THE DECREE OF THE MINISTER OF INDUSTRY AND TRADE CONCERNING THE LICENCING OF REPRESENTATIVE OF A FOREIGN TRADING COMPANY.

CHAPTER I GENERAL PROVISIONS Article 1

1.	Referred to in this decree as the represenrtative of a foreign trading company shall be an Indonesian Citizen or foreign citizen appointed by a foreign company or group of foreign companies abroad to become the representative in Indonesia.
2.	Referred to in this decree as a national company shall be an Indonesian corporate body not under the foreign investment scheme.

Article 2

The representative of a foreign trading company in In-donesia as meant in Article 1 may work as a selling agent and/or manufactures agent and/or buying agent.

CHAPTER II THE ACTIVITIES OF THE REPRESENTATIVE OF A FOREIGN TRADING COMPANY

Article 3

1.

The representative of a foreign trading company working as a selling agent and/or manufacturer agent : a. Is allowed to introduce and promote the goods produced by foreign company or group of foreign companies abroad appointing him/her and to give information or directives on the use of import of the goods to domestic companies/consumers in Indonesia; b. Is allowed to conduct a market survey and control domestic sale in marketing the goods produced by the foreign company or group of foreign companies abroad appointing him/her; c. Is not allowed to do trade and conduct trade transactions from the initial to settlement stages, for instance by submitting tenders, signing contracts, setting claims and the like.

2.

The representative of foreign trading company as a selling agent is allowed to: a. Conduct a market survey for the goods needed by the foreign company or group of foreign companies abroad appointing him/her and connect the foreign company or group of foreign companies abroad with domestic companies and give information and directives on terms of the export of goods to domestic companies b. Concluded contracts for and under the name of his/her company with domestic companies for the export of goods.

Article 4

1.	The import of goods from the representative of a foreign trading company as a selling agent and/or manufacturer agent shall be done by a national company.
2.	The representative office of a foreign trading company may appoint a national company as its agent for the products it promotes.
3.	The appointment of the agent as meant in paragraph (2) shall be done with approval from the foreign company or group of foreign companies in the capacity as the producer or plant producing goods abroad.

Article 5

1.	The representative of foreign trading company may have one head office of representative of the foreign trading company in one of provincial capitals.
2.	The representative of foreign trading company, with the approval from the foreign company or group of foreign companies abroad, may open branch offices in all provincial capitals outside the province where the head office is located,
3.	The head of the representative office of a foreign trading company, with the approval from the foreign company or the group of foreign companies abroad, may employ an Indonesian citizen or foreign citizen as the assistant to the head office of representative of the foreign trading company or the assistant to the branch office of representative of the foreign trading company.

CHAPTER III

OBLIGATION

Article 6

1.	The head office of the representative of foreign trading company and the branch office of the representative of foreign trading company shall hold a business permit of representative of foreign trading company issued by the Director General of Domestic Trade.
2.	The business permit of the head office of representative of foreign trading company shall begin to take effect on the date of issuance as long as the letter of appointment from the foreign company or group of foreign companies abroad appointing him/her is still valid.

Article 7

1.

Any head office of representative of foreign trading company shall submit 3 periodic report once every six months to the Director General of Domestic Trade using the Specimen attached (Attachment), about : a. Its business activities, including those of the branch office of representative of foreign trading company; b. Workers both Indonesian citizens and foreign citizens its employs; c. Education and training course aimed at improving the technical know how of Indonesian workers it employs.

2.

Any head office of representative of foreign trading company shall report any succession of head of the head Office, head of the branch office, assistant to the head of the head office and the head of the branch office as well as any change in the name and address of the head office and the branch office in Indonesia and the head office of the foreign company or group of foreign company.

Article 8

Any foreign citizen working for the representative office of foreign trading company shall employ at least 3 (three) experts and/or administrative officers of Indonesian nationality.

Article 9

1.	The use of foreign citizen(s) at the representative office of a foreign trading company shall hold an expatriate's working permit (IKTA) issued by the Minister of Manpower based on the recommendations from the Director General of Domestic Trade.
2.	The foreign citizen(s) working for the representative office of foreign trading company shall hold a university degree or its equivalent, and have working experience for at least 3 (three) years in their respective field of task.

CHAPTER IV

REQUIREMENT

Article 10

1.

The requirements that shall be met to obtain the business permit of representative of foreign trading company are as follows : a. The letter of appointment made by the foreign company or group of foreign companies abroad shall at least contain the name of foreign citizen appointed as a representative, business line, the validity of the letter of appointment. b. The letter of statement about the foreign company or group of foreign companies abroad containing the name of company, the date of establishment, the legal status of company, the address of the head office and branch office as well as business line issued by the representative of the Republic of Indonesia in the country where the head office of the company is located, shall be equipped with the letter of statement that the concerned party will not do trade, except the activities as meant in Article 3 of this decree. c. The working program of the representative office or branch office of the representative of the foreign trading company. d. Business site permit issued by the Ministry of Home Affairs in the case the concerned regional administration. If after a maximum of 15 (fifteen) days the business site permit has not been issued, the evidence of delivery/receipt of application may serve as evidence to supplement this application for permit; e. The letter of statement on office space issued by the relevant regional office of the Ministry of Industry and Trade. f. Fiscal statement issued by the taxation agency. g. Expatriate's working permit issued by the Ministry of Manpower and stay permit issued by the Directorate General of Immigration of the Ministry of Justice, especially for foreign citizens; h. Surety which must be paid by the head of the head office and the head of the branch office : 1) Rp. 5,000,000, for foreign citizen 2) Rp. 1,000.000, for Indonesian citizen.

2.

The surety as meant in paragraph 1 letter (h) will be returned at nominal value of the surety if the representative of foreign trading company closes its business activities or is disolved, except if the concerned party violates the existing regulations and the surety is declared confiscated for the state.

Article 11

1.	The application for the business permit of representative of a foreign trading company shall be filed by the prospective head of the representative of foreign trading company to the Director General of Domestic Trade.
2.	The application for the business permit of the branch office of representative of foreign trading company shall be filed by the head of the representative office of foreign trading company to the Director General of Domestic Trade.
3.	The applications as meant in paragraph 1 and 2 shall use the application form: - Indonesian citizen. specimen as meant in attachment II; - Foreign citizen, specimen as meant in attachment III.
4.	The application forms are available at the Directorate General of Domestic Trade.

Article 12

1.	The application forms which have been filled out correctly shall be returned to the Director General of Domestic Trade no later than 1 (one) month after they are obtained;
2.	The applicants who have returned application forms and met the requireiments as meant in Article 10 letter a, b and c, shall be given a certificate of temporary approval of representative of foreign trading company using the specimen as meant in Attachment IV for Indonesian Citizens and the specimen as meant in Attachrnent V for foreign citizen;
3.	The certificate of temporary approval of representative of foreign trading company shall be valid for 3 (three) months after the date of issuance.
4.	No later than 3 (three) months after the issuance date of the certificate of temporary approval of representative of foreign trading company, the applicant shall have met the requirements as meant in letter d, e, f, g and h.
5.	The holders of certificate of temporay approval of representative of foreign trading cornpany who has met requirement as meant in paragraph 4 shall be given the business permit of the head officer of representative of foreign trading company using the specimen as meant in Attachment VI for Indonesian citizen and the specimen as meant in Attachment VII for foreign citizen.
6.	The business permit of the branch office of representative of foreign trading company shall be issued after the issuance of the business permit of the head oflfce of representative of foreign trading company using the specimen as meant in Attachment Vlll for Indonesian citizen and the specimen as meant in Attachment IX for foreign citizens.
7.	The validity of the business permit of the branch office as meant in paragraph 6 shall be adjusted to the validity of the business permit of the head office of representative of foreign trading company.

CHAPTER V

DEVELOPMENT

Article 13

The Director General of Foreign Trade shalt be responsible for developing and controlling the business activities of representatives of foreign trading companies.

CHAPTER VI

SANCTION

Article 14

The business permit of the head office of representative of foreign trading company or the branch office of representative of foreign trading company may be revoked or temporarily revoked, if the concerned party :

a.	Fails to meet obligation and/or violates the provisions of articles 3, 4, 5, 6, 7, 8, 9 and 10 of this decree;
b.	Closes or disolves the business on her/his own;
c.	Commits or is accused of committing a Criminal offence in the economic sector or is liable to criminal penalty in the economic sector.

 

CHAPTER VII

CLOSING PROVISION

Article 15

Article 16

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