Indonesia Strengthens Control Over Virtual Office (VO). Some NIBs Have Been Annulled

Indonesian authorities have tightened inspections of companies registered with virtual offices (VO).

What's Happening Right Now

BKPM has placed the use of VOs under increased scrutiny.
This week, according to information received, BKPM staff are selectively checking VO addresses and contacting virtual office providers to confirm the actual activities of companies at these addresses.
During the inspections, regulators have legitimate suspicions that some companies are inactive or fictitious—due to the lack of real activities, failure to meet investment obligations, and prolonged unjustified use of VO.
As a result of such inspections, some NIBs were automatically annulled by the system.

A key point that cannot be ignored:

A physical office is a mandatory requirement for all types of businesses, including fully online companies. The online format does not exempt the need for a real office and operational activity at the registration address.

Currently, using VO effectively becomes a high-risk decision in terms of compliance. It is important to remember: VO was initially conceived as a temporary solution, not a format “for years.”

Recommendations to Reduce Risks

Re-evaluate the use of VO

Consider VO only as a temporary measure, not a permanent working model.

If you continue to operate through VO, take the following steps

Find premises for a physical office (office / serviced office / coworking with verifiable activity).
Set realistic deadlines for transitioning to a physical address.
Change the address in the OSS and related systems to the actual physical address.
Ensure actual operational activity at the registration address.

If the company has not yet started activities and is not meeting investment obligations

Determine a launch strategy for the near future.
Begin making statutory capital contributions according to requirements.
Start fulfilling investment obligations and reflect them in reports.

Additionally (Important!)

Check the relevance of KBLI and align it with the actual business model.
Update information in OSS: address, activities, contacts.
Fulfill obligations for tax and financial reporting: submit missed reports and comply with current periods.

These steps are aimed at reducing the risk of NIB annulment, license suspension, and additional questions from regulators.

If you need help analyzing your situation, transitioning to a physical office, or aligning your structure with the requirements, you can contact our team for consultation.