Foreign Construction Company (BUJKA)

There are three (3) types of representative office in Indonesia based on Article 21 Regulation of Head of Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM) Number 15 of 2015 Concerning Guideline and Procedure for Licensing and Non-Licensing Investment (“BKPM Regulation No.15/2015”) as follows:

1. Representative Office of Foreign Company (KPPA).
2. Representative Office of Foreign Trade Company (KP3A).
3. Representative Office of Foreign Construction Services Enterprises (BUJKA).

Foreign investors aiming to expand their construction business to Indonesia have two options – set up a limited liability company (PT PMA) or a representative office for their foreign construction company (BUJKA).

Reason to choose BUJKA?

Representative offices are not equal to limited liability companies. However, many foreign companies choose for a BUJKA instead of setting up a limited liability construction company (PT PMA) in Indonesia mainly because it does not require any local shareholders.

Once a BUJKA is set up, it can participate in tenders and collect information about construction projects all over Indonesia. Even though you don’t need to have local shareholders when setting up a BUJKA, you are required to have a local construction company as your partner by the time the project is being delivered.

Therefore, a BUJKA is best suitable for larger foreign construction companies since they are only allowed to engage in large-scale construction projects while small size projects are reserved for local construction companies.

Both entities are eligible to do business and receive income in Indonesia. The main difference in terms of doing business is that due to BUJKA is not eligible to obtain business license for construction service, hence the entity can not perform any construction work without signing a Joint-Operation Agreement with a local company that has the licenses. While a PT PMA is eligible to do the construction work in Indonesia without any involvement of local company.

Steps for Establishing BUJKA in Indonesia

After you have a broad understanding of BUJKA, now you must know the steps that must be taken to register your construction company. Following are the steps to build BUJKA in Indonesia:

1. Obtain a certificate of expertise (SKA)
2. Obtain construction association membership
3. SBU Certificate from LPJK
4. BUJKA permit from BKPM
5. Domicile Permit
6. Taxpayer Identification Number (NPWP)
7. Business Establishment Permit (SIUJK)
8. Company Registration Number (TDP)

Licenses for BUJKA representative offices are valid for 3 years and can be extended based on existing regulations. After obtaining a license, BUJKA’s representative office is expected to carry out complex, high-risk, or high-tech construction projects in Indonesia (Ministry of Public Works Regulation No.10 / 2014 Article 12).

Because of the special nature of this company, the requirements for the establishment of representative offices in Indonesia are also different. Therefore, you really need legal and professional guidance.

Indo-Ned Consultancy will help you to complete all steps in obtaining the documents needed to establish a foreign construction services representative office in Indonesia. Contact us for further assistance.

Disclaimer:

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.