Indonesia has its own regulation on the business qualification of construction services. This qualification made as an effort to classify construction service business based on its competence and business capability. In other words, these classification has its function to assess the capability of a Construction Service Business Entity (BUJK) in terms of technical or non technical.
For Foreign Construction Service Business Entity (BUJKA), there is a certain qualification of BUJKA that may enter into the national construction service market in Indonesia. Only BUJKA that has establish a representative office and/or in a form of Indonesian legal entity through capital cooperation with a large scale qualification National Construction Service Business Entity.
Determination on the business qualification is conducted through an assessment towards:
- Annual sales;
- Financial capability;
- Construction workers availability; and
- Capability in the provision of construction equipment
The regulation on the determination of qualification is stipulated under the Regulation of Ministry of Public Works and Public Housing Number 19/PRT/M/2014 concerning Amendment of Regulation of Ministry of Public Works Number Nomor 08/Prt/M/2011 concerning Sub-classifications and Sub-qualifications for Construction Services Businesses and Law Number 2 of 2017 concerning Construction Services.
These are the Classification of BUJKA in order to conduct a construction work in Indonesia:
A Construction Service Business Entity with large scale qualification may only carry out a Consruction Services in the market segmentation of: 1) carrying a huge risk; 2) high technology basis; and/or 3) huge cost.
Large qualification is consisting of 2 (two) sub-qualification, i.e:
LARGE SCALE BUSINESS SUB-QUALIFICATION
Based on the explanation above, only BUJKA with large scale qualification which being established in a form of legal entity and as a foreign Construction Service business representative that may conduct Construction Service business in Indonesia. This is due to provisions as mentioned in Article 23 jo. Article 33 paragraph (1) of Construction Service Law which stipulated that only Construction Service Business Entity with market segmentation that carry out a huge risk, high technology basis, and/or with a huge cost that may conduct a Construction Service in Indonesia.
Aside from those matters as mentioned above, a BUJKA of Construction Implementation and Integrated Construction Service is obliged to have a highest value of working experiences in handling a construction works in the amount of IDR83,330,000,000.- (eighty three billion three hundred thirty million rupiah) or at least having a cumulative value in the amount of IDR250,000,000,000.- (two hundred fifty billion rupiah) within the last 10 years. While a BUJKA of construction planning and construction supervision is obliged to have a working experiences with cumulative value of at least IDR2,500,000,000.- (two billion five hundred million rupiah) within the last 10 years.
How can SMART help you?
To provide legal certainty, SMART Legal Consulting will help you through legal aspects in conducting construction service business in Indonesia.
SMART Legal Consulting is a corporate legal service provider with experience in helping its client in the establishment of foreign construction service business entity. With our professionals, SMART is not only helping you with the establishment of the company, but also to help you as the foreign construction service business entity in in determining the construction service business activity in Indonesia.