We understand that Representative Offices of Foreign Construction Services Company (BUJKA), means a business entity established by law and domiciled in a foreign country, which has a representative office in Indonesia, and is equivalent to a legal entity of Limited Liability Company which is engaged in construction services (Article 1 paragraph (3) 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”)).
- LICENSES MUST BE OWNED BY BUJKA
Since BUJKA is only granted to the BUJKAs with huge qualifications. Therefore, it should be known that the BUJKA should have obtained a license which is issued by BKPM, and also several licenses which must be applied by BUJKA for conducting business in Indonesia.
The following is type of licenses that must be owned by BUJKA:
- Certificate of Expertise (Surat Keterangan Ahli/SKA);
- Register as the Member of Indonesian Construction Association;
- Certificate of Certificate of Business Entity (Sertipikat Badan Usaha/SBU);
- Representative Office Licenses;
- Domicile Permit;
- Taxpayer Registration Number (NPWP);
- Construction Business Licenses (Surat Ijin Usaha Jasa Konstruksi/SIUJK);
- Companys Registration Certificate (Tanda Daftar Perusahaan/TDP).
We understand that BUJKA is only allowed to undertake the construction works which are high risks, high-tech, and high cost, as follows:
- HIGH-RISK CONSTRUCTION WORK, means doing construction work that could endanger public safety, property, human life, and the environment;
- HIGH-TECH CONSTRUCTION WORK, means doing construction work that must use special construction method, high-tech equipment, construction equipment and require many special expert;
- HIGH COST CONSTRUCTION WORK, means doing construction work that the value of project at least IDR100,000,000,000 (one hundred billion rupiah), and conduction construction services work (planning and/or supervision) at least IDR10,000,000,000 (ten billion rupiah).
According to Article 11 of the Regulation of the Minister of Public of Works and Housing Republic Indonesia Number 10/Prt/M/2014 (“Regulation Ministry of PU No. 10/2014”), we understand that Representative Office of BUJKA could cooperate with the Domestic Construction Service Company (also known as Badan Usaha Jasa Konstruksi Nasional or BUJKN) for doing construction work as stated in the BUJKA Project Qualification (point 2 above).
However, only BUJKN who meet the following criteria can engage with the BUJKA:
- Type of BUJKN business entity is Limited Liability Company;
- Share ownership 100% (one hundred percent) by Indonesian citizen, local governments, private enterprises, state enterprise and/or local government;
- Own SBU with huge business qualifications; and
- Own Construction License (Izin Usaha Jasa Konstruksi/IUJK).
The benefit of BUJKA when join operation with BUJKN is the financial supporting. In whic, the construction work can be financed by:
- State Budget or Budget Revenue and Expenditure;
- foreign grants;
- foreign investment and domestic; and/or
- private funds in accordance with the law and regulations
(Article 12 of the Regulation of the Minister of Public of Works and Housing Republic Indonesia Number 10/Prt/M/2014).
HOW CAN SMART CONSULTING HELP YOU?
To ensure a smooth investment and business 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.
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