Indonesia has undertaken significant regulatory reforms to simplify business administration and taxation, particularly in relation to branch offices. These reforms are reflected in Article 280 of the Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”) Regulation Number 5 of 2025 on Guidelines and Procedures for Processing Risk-Based Business Licensing and Investment Facilities through the Online Single Submission System (“BKPM Reg No. 5/2025”), and Article 9 of the Minister of Finance Regulation No. 112/PMK.03/2022 (“MoF Reg No. 112/2022”) as amended by Minister of Finance Regulation No. 136 of 2023. Both regulations demonstrate a clear policy direction toward integration, efficiency, and digitalization through the Online Single Submission (“OSS”) system and the modernization of taxpayer identification.
Under Article 280 of BKPM Reg No. 5/2025, an administrative branch office (kantor cabang administrasi) is not required to have a separate deed of establishment, including for purposes of registration and recording within the company’s Business Identification Number (Nomor Induk Berusaha or “NIB”). This provision reflects the legal characterization of a branch office as merely an extension of the parent company rather than a separate legal entity. As such, its existence is sufficiently recognized through the parent company’s registration in the OSS system, without the need for additional notarial formalities.
This approach is consistent with the broader function of the NIB as a single, integrated business identity. The NIB serves not only as proof of registration but also as a comprehensive identifier covering various administrative aspects of a business, including branch operations. By centralizing business identity within the NIB, the regulation reduces administrative burdens and facilitates a more efficient process for companies seeking to expand their operations through multiple branches across Indonesia.
Business Actors shall register their administrative branch office as referred to in paragraph (1) through the OSS System by providing, at a minimum, the following information: (a) the address of the administrative branch office; (b) Taxpayer Identification Number (Nomor Pokok Wajib Pajak or “NPWP”); (c) the person in charge of the administrative branch office; and (d) a valid and legally binding lease agreement of the office premises.
On the taxation side, Article 9 of MoF Reg No.112/2022 introduces a significant shift in how branch offices are identified for tax purposes. Previously, branch offices were assigned a separate Tax Identification Number (Nomor Pokok Wajib Pajak Cabang or “NPWP Cabang”) to administer tax obligations at different business locations. However, this system has been reformed, with NPWP Cabang remaining valid only until 30 June 2024 and subsequently replaced by the Identity Numbers of Business Premises (Nomor Identitas Tempat Kegiatan Usaha or “NITKU”) as the new tax identifier for branch offices.
The replacement of the branch NPWP (NPWP Cabang) with the NITKU marks a transition towards a more centralized and unified tax administration framework. While the core taxpayer identity remains a single NPWP, each place of business is now tracked using a NITKU, which allows for location-specific tax oversight without creating multiple taxpayer identities. In contrast to the branch NPWP, the NITKU is purely an identification number and does not bear its own tax responsibilities. All tax-related actions, such as making payments, issuing withholding tax certificates and tax invoices, and submitting returns, must be carried out using the main NPWP.
This reform aligns with the government’s broader objective of creating a unified data system, improving administrative efficiency, and enhancing regulatory oversight, while simultaneously supporting ease of doing business in Indonesia.
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This news update is prepared for general informational purposes only. The content does not constitute legal advice, a legal opinion, or counsel from IABF Law Firm. The information contained herein may not reflect the most current developments. Any quotation, distribution, or use of this information for any purpose is solely at the user’s own risk.
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Published by: IABF Law Firm
Published on: 11 April 2026
