The City giant is forming an alliance with leading Indonesian firm Mochtar Karuwin & Komar and will be based in the capital Jakarta.
Foreign firms are forbidden to set up independent offices there and must instead align themselves with national practices.
Regional managing partner John East says the economic conditions for such an alliance are now right. "We have looked from time to time at having arrangements in Indonesia," he says.
"While we have not pursued it in the past few years because of the Asian [economic] crisis, we thought this was now a great opportunity."
The decision to open was also prompted by the increasing workload coming from the Asian market.
Says East: "The aim will be to attract and carry out Indonesian business which so far we have done from Singapore and Hong Kong although obviously clients will have the final say."
Mochtar Karuwin & Komar has a range of overseas clients including American Express and Chase Manhattan.
Senior partner Sidik Suraputra says: "We have had a strong working relationship with Clifford Chance for many years and we look forward to strengthening that relationship."
Clifford Chance will dispatch senior finance lawyer Alex Jackson to Mochtar Karuwin & Komar's office from its operation in Hanoi, Vietnam, at the end of March.
East dismisses suggestions that the political instability in the region will affect the firm.
He says: "Yes, around the fringes, there are issues of separatism and so on. But when the government first came in it was seen as an extremely positive step forward and generally speaking I think that it still true.