3-TYPES-OF-CONSTRUCTION-SERVICE-BUSINESS-ENTITY-IN-INDONESIA

3 TYPES OF CONSTRUCTION SERVICE BUSINESS ENTITY IN INDONESIA

By smart | May 18, 2017

These days, Indonesia is one of the emerging construction market in Southeast Asia region. This is reinforced by the Indonesian government policy on infrastructure, in which government pushes the acceleration of infrastructure project as part of development acceleration in Indonesia, then it becomes a breath of fresh air for construction service in Indonesia, for both foreign and local businesses.

Construction Service Business Entity (Badan Usaha Jasa Konstruksi/BUJK)

In the construction industry, BUJK is further distinguished by the nationality of its shareholder as follow (Article 1 Point 2-5):

  1. National BUJK, is an Indonesian legal entity entirely owned by Indonesian legal entity and/or Indonesian citizen, and commonly abbreviated as BUJKN;
  2. Foreign BUJK, is a foreign legal entity which domicile at oversea and has a representative office in Indonesia and likened to BUJKN.  This business entity is commonly abbreviated as BUJKA; and
  3. BUJKA in the framework of investment, is a Limited Liability Company incorporated in Indonesia in the framework of investments with shareholders consisting of foreign investor (institution) and local investor (institution/individual). This business entity is commonly abbreviated as BUJKA PMA.

Construction Business License (Izin Usaha Jasa Konstruksi/IUJK)

Furthermore, to carry out construction service business activity in Indonesia, BUJK is required to have IUJK issued by the authorized government and/or government agency in Indonesia, which is divided into 3 types of licenses:

  1. National IUJK

    2. National Construction Business License or National IUJK is a business license issued by Provincial Government/City Government/District Government to BUJKN based on the Regulation of the Minister Number 04/PRT/M/2011 concerning “Guidelines of requirements for Granting Business License on National Construction Service”

  2. BUJKA License

    3. Foreign Construction Service Representative Office License, or BUJKA License, is the business license issued by Indonesia Investment Coordinating Board (BKPM) to BUJKA based on the Regulation of the Minister Number 10/PRT/M/2014 concerning “Guidelines on the Requirements for the Granting of Foreign Construction Service Business Entity Representative Office License”.

  3. IUJK PMA

    4. Foreign Investment Construction Business License or IUJK PMA is business license issued by Indonesia Investment Coordinating Board (BKPM) to BUJK PMA based on Minister Regulation No. 03/PRT/M/2016 About “Technical Guidelines for Granting Foreign Investment Construction Business License”.

You may need to know that to obtain IUJK, BUJK shall have and/or submit several licenses based on classification and qualification of construction service business you may wish to establish in Indonesia. Such licenses to be owned by BUJK before applying for IUJK will be explained further in the section hereunder.

The steps in obtaining IUJK in Indonesia?
The steps in obtaining IUJK in Indonesia are:

  1. SKA (Certificate of Expertise)

    2. As BUJK may only carry out the large classification construction work, thus BUJK shall have a minimum of (2) experts with Certificate of Expertise (Serifikat Keahlian/SKA).

  2. KTA (Pendaftaran Anggota Assosiasi/Registration of Association Members)

    3. BUJK must be listed as a registered member of a certified Construction Association Registry or registered in Construction Services Development Board (LPJK).

  3. SBU (Sertifikat Badan Usaha /Corporate Certificate)

    4. Every BUJK, whether as a construction planner and construction supervision service or construction service shall own SBU.

  4. IUJK (Izin Usaha Jasa Konstruksi /Construction Business License)

    5. IUJK application can be submitted after BUJK own SBU which being issued by National LPJK or Provincial LPJK.

Important note: a construction service business entity that does not have Corporate Certificate (SBU) and Construction Business License (IUJK) is not in compliance with the requirements as a bidder/procurement of construction service within Indonesia region, as stated in Article 8 juncto Article 17 paragraph (5) of LawNumber 18 Year 1999 concerning Construction Service. Hence, the Construction Service Business Entity will not be able participate in any procurement process within Indonesia region.

HOW CAN SMART CONSULTING HELP YOU?
To ensure a smooth investment and infrastructure project operation from the legal perspective, but also still focus on maintaining your business in Indonesia and reach your revenue target, it is advised for you to find capable and trusted lawyers or legal consultants for advice and assistance in ensuring your legal compliance with prevailing laws and regulations.

SMART Consulting is an Indonesian Corporate Legal Services firm. SMART has assisted Clients in dealing with matters related to Construction and Investment Law, such as assist Client to establish many types of Foreign Construction Service Representative Office in Indonesia. We also assist Clients regarding the Compliance and Corporate Legal Services.

Contact Us Now to get your legal solution for your business goals, and still comply with the prevailing laws and regulations.

E    : info@smartcolaw.com 
H   : +62821-1234-1235
O   : +6221-80674920

Posted in ARTICLE, Doing Business In Indonesia(Company Formation)