Indonesia is a growing hub for infrastructure and construction projects, making it an attractive market for foreign construction service providers. One of the key mechanisms for foreign companies to participate in this sector is through the establishment of a Representative Office of a Foreign Construction Service Business Entity, known as BUJKA. This representative office enables foreign construction firms to function under the regulations established by the Indonesian authorities.
Also read: Indonesia Construction Industry: Outlook and Opportunities
What is a BUJKA?
A BUJKA (Badan Usaha Jasa Konstruksi Asing) is a foreign legal entity that can establish a representative office in Indonesia’s construction sector under Government Regulation No. 5 of 2021. This regulation enables foreign construction companies to carry out various construction-related activities within the country, including:
- Construction consultancy services
- Construction works
- Integrated construction works
These activities are permitted provided the foreign entity meets Indonesia’s strict regulatory qualifications and approvals.
Also read: What is KPPA in Indonesia and How to Open One
BUJKA Classification and Services
BUJKA representative offices can engage in both general and specialized construction services, depending on their qualifications and business scope.
General Construction Services
- Construction Consultancy Services: Architecture, engineering, landscape architecture, regional planning, and integrated engineering.
- Construction Works: Buildings and civil buildings.
- Integrated Construction Works: Construction of buildings and civil buildings.
Specialized Construction Services
- Construction Consultancy Services: Scientific and technical consultancy, technical testing, and analysis.
- Construction Works: Preparation, special construction, prefabricated construction, equipment rental, installation, and building completion.
Also read: The Limitations of Representative Office in Indonesia
Qualification Requirements for BUJKA
To operate in Indonesia, a BUJKA representative office must meet several financial, technical, and manpower-related requirements based on their classification. These requirements include:
General Classification
- Construction Consultancy Services: A minimum annual revenue of IDR 10 billion and at least five key equipment items per sub-classification are required.
- Construction Works: Minimum annual sales of IDR 2 billion and ownership of at least 5 main equipment pieces per sub-classification.
- Integrated Construction Works: Minimum annual sales of IDR 100 billion and possession of assets worth at least IDR 35 billion.
Specialized Classification
- Construction Consultancy Services: Must possess assets worth at least IDR 1 billion.
- Construction Works: Must have assets worth at least IDR 10 billion and a minimum of 5 main equipment pieces per sub-classification.
The senior executive in charge of a BUJKA’s technical operations must be an Indonesian citizen, while the head of the representative office responsible for overall operations and the technology transfer process may be a foreign citizen.
Also read: The Types of Representative Offices in Indonesia
Certification and Compliance
To ensure compliance, a BUJKA representative office must undergo a feasibility assessment based on its financial capacity, equipment availability, and the qualifications of its construction manpower. The assessment results determine the issuance of the Construction Business Entity Certificate (SBU) and Work Competency Certificates (SKK). These certifications are crucial for the legal operation of BUJKA in Indonesia and are managed through the OSS (Online Single Submission) Agency.
While Indonesia presents a lucrative market for foreign construction companies, establishing a BUJKA representative office requires meeting stringent legal and regulatory requirements. Foreign businesses need to ensure that they comply with all legal procedures, including obtaining the necessary certifications and approvals.
Also read: Set Up Representative Office in Indonesia: 2024 Complete Guide
If you are a foreign company looking to enter Indonesia’s construction market, it is critical to stay compliant with local regulations to ensure smooth business operations and avoid legal complications.
Consider leveraging professional services like InvestinAsia to help you set up a representative office in Indonesia. We offer expert guidance and assistance, ensuring a smooth and efficient establishment of your representative office in Indonesia.
Looking to set up a representative office in Indonesia? Chat with our experts now.
