8 Businesses Forbidden to Use a Virtual Office in Indonesia

Virtual offices in Indonesia have been around for more years than a lot of people realise, even before the rise of the modern digital age. As technology advances, we cannot deny that virtual offices are becoming more and more popular due to the many benefits they offer – particularly for small businesses and startups.

Despite its popularity and advantages, has it ever occurred to you that there are actually several types of businesses that are forbidden to use a virtual office in Indonesia? In this article, we will tell you the eight businesses are not allowed to use a virtual office in Indonesia.

1. Construction

Although this sector is not explicitly prohibited, many requirements indicate that virtual offices are not allowed for construction businesses. This is because construction businesses need to have special business permits.

In addition to that, this industry requires huge capital, large-sized tools and equipment, and the submission of UUG (Occupancy Worthiness Permit) and the PKP (Taxable Entrepreneur Confirmation).

Considering the size of the place to store large tools and equipment, as well as the noise produced by them, the construction sector is required to have a designated physical place for storage and operation.

2. E-commerce

This may be a little surprising, but e-commerce is one of the businesses, which forbids the use of a virtual office.  E-commerce is a booming business that has shown no sign of stopping in the country, as we can see several e-commerce giants originating from Indonesia such as Tokopedia, Lazada, Bukalapak, etc.

Despite this development, the government in Indonesia does not allow online businesses to use virtual offices to prevent frauds and protect consumers.

3. Property

Property businesses also require a relatively much larger capital due to their buying and selling transactions. These transaction activities include the purchase, sales and rental of real estate, offices, apartments and condominiums, commercial buildings.

For that reason, the office locations of property companies must also be clearly specified and identified, making the use of virtual offices almost impossible.

4. Tourism

For companies related to tourism business, they must acquire a TDUP (Tanda Daftar Usaha Pariwisata) license or tourism license. Due to this requirement, a tourism company will need to have an actual office but not a virtual office. The Ministry of Tourism will need to identify your business location before you can establish your tourism company.

Companies related to tourism businesses include tour agencies, tourism food services, travel accommodation providers, etc.

5. Transportation

Conventional transportation businesses involve the receipt and delivery of goods of receivers and senders. Therefore, a transportation company needs to prove the existence of their company with clear office location. In other words, you will need office location on your own for transportation purpose as you are forbidden to use a virtual office in this case.

6. Event Organizer

Event organizing in Indonesia involves a lot of activities regarding legal regulations in the country in terms of professionalism. Due to these legal responsibilities and compliances, it is of a general consensus that event organizers in Indonesia are prohibited from using a virtual office.

7. Representative Office

For foreign companies to expand their businesses in Indonesia through the use of representative office, it is critical to keep in mind that a virtual office is not allowed. The representative office of your overseas’ parent company must be located in an office building or a commercial building in Indonesia with a specified address.

8. Businesses with Huge Capital

In addition to the fields mentioned above, if a business has an annual gross revenue of more than IDR 4.8 billion, it will have to become a PKP. Thus, a virtual office is completely out of the question.

Now, when you checked businesses that are forbidden to use a virtual office in Indonesia, you have a clear idea if your business field is entitled to register through a non-physical office. Check our workspaces located in Jakarta, Semarang and Bali and purchase a virtual office in Indonesia online.

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