STARTING A CONSTRUCTION BUSINESS IN INDONESIA
"Opportunities and challenges to start a construction business by setting up a new company or representative office in Indonesia"
The construction industry in Indonesia is a dynamic, competitive sector that can offer both opportunities and challenges for foreign company.
Indonesia's construction sector continues to grow at an impressive rate, supported by the government's focus on infrastructure. In order to accelerate the development of the country’s infrastructure projects, President Joko Widodo has prioritised the construction of over 6,000 km of new roads, 14 new airports, 24 ports and 15 industrial estates nationwide by 2025. Underpinning the vast construction market is an extensive government programme of 226 national strategic projects, which range from transport infrastructure (roads, railways, airports and seaports), through to dams, special economic zones and waterworks.
There are many opportunities for foreign construction companies to participate and be directly involved in the development of construction projects in Indonesia by opening a construction company or representative offices of foreign construction companies. Construction industry contributes significantly in terms of scale and share in the development process for both developed and developing countries.
Jane Doe - Another Company, LLC
Starting a construction company in Indonesia?
WE WILL SHOW YOU
The right direction to set up a construction company (PT PMA) or Foreign Construction Representative Office (BUJKA) in accordance with applicable laws and regulation in Indonesia.
The Indonesian construction industry's growth prospects by market, project type and construction activity. Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by project type of activity (new construction, repair and maintenance, refurbishment and demolition). Private sector projects may involve the development of office buildings, high-rise apartments, shopping malls, commercial and industrial building.
Implementation of the development of construction projects in Indonesia are undertaken by various parties. Parties directly involved in the development activity are the owner, consultant planners, contractors and construction management consultant. Owner is obliged to provide funding for the establishment aspects of the project. Planner Consultant is responsible for the manufacture of technical project plan, including detailed engineering design. Contractor shall carry out projects development. While supervising the implementation of project development is undertaken by Consultant for construction management.
How to start a construction business in Indonesia?
There are several things to consider before you start a construction business in Indonesia.
Think about the types of construction services your company will provide.
Choose a business structure and register or incorporate your business.
Certification, Registration and business licences and requirements apply to your type of business
This document is very important to be owned by the construction company and also to participate in the tender consisting of; 1). Expertise certificate (sertifikat keahlian or SKA), 2). Registered as a member of the association of construction companies, 3). Business Entity Certificate (SBU) and 4). Construction Services Business Licenses (IUJK). All the construction company must meet the classification and qualification requirements consist of; 1). net worth, 2). work experience, 3). engineer/experts
Opening a Construction Company or Representative Office in Indonesia
Some foreign investors at the early stage of entering the Indonesia market choose Representative Office, then later after the business starts to grow they will apply for a Foreign Direct Investment Company (FDI) status to set up Indonesian PT PMA Company.
For both options, the foreign construction company will require the participation of a local Indonesian construction company. This will either be as the local shareholder of the joint venture construction company or the local partner in a "joint operation" that must be formed following the establishment of a Representative Office.
PMA Construction Company
A PMA company is a limited liability company established under Law No 40 of 2007 on Limited Liability Companies (Company Law). A PMA construction company is a joint venture company established by a foreign investor and Indonesian company that has certain qualifications.
Foreign share ownership in a construction contractor and construction consultant is limited to 67% and the remaining 33% must be held by a local shareholder.
Foreign Construction Representative Office
Construction Representative Office (BUJKA) is a representative office established by foreign construction companies to carry out business activities in Indonesia as a construction contractor or consultant.
This type of Representative Office is only allowed to conduct projects in Indonesia through the Joint Operation with locals. This Joint Operation is only permitted to join the tender and conduct the Government projects funded by the Foreign Aid, projects in the frame of Foreign Investment and Domestic Investment as well as the projects funded by private funds.
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Eprobisnis is one of Indonesian Business Consulting and Investment Advisory Services that provides one stop services to foreign companies or individuals to be able to conducts business activities and establish the company, opening representative office of foreign company including visa and working permits for foreigners as well as company registration, certification business license for construction company and other supporting services to the oil and gas industry in Indonesia.
Why use our services
We also ensure the company and your business in accordance with regulations and laws in Indonesia, capital investment requirements, business licenses and registration of companies to grow and develop in Indonesia.