FOREIGN REPRESENTATIVE OFFICE

Business license, certification and registration to open representative offices of foreign companies and start a construction business in Indonesia

In order to establish a representative office, the foreign construction company (“BUJKA”) shall obtain a business license called the License of Representative Office for Foreign Construction Services (Izin Perwakilan Badan Usaha Jasa Konstruksi/“IUJK”).  

Foreign Construction Representative Office in Indonesia

Andhyka CONSULTING
Construction Representative Office is a representative office established by foreign construction companies to carry out business activities in Indonesia as a construction contractor or consultant. Foreign Construction Service Business Entity (Badan Usaha Jasa Konstruksi Asing) hereinafter abbreviated as BUJKA shall be business entity incorporated under the laws of and domiciled in a foreign country, having representative offices in Indonesia, and deemed equivalent to a Limited Liability Company.  

​The Foreign Construction 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.

BUSINESS ACTIVITIES

The Foreign Construction Representative Office (BUJKA) is permitted to undertake construction services and/or engineering consulting activities, the BUJKA must form a joint operation (JO) with an Indonesian construction company (BUJK) to execute either a Government or other projects.

JOINT OPERATION
The joint operation contract shall commence as from the participation in the processes of procurement, implementation, up to and including the completion of the construction work concerned.   

CRITERIA OF WORK
BUJKA shall only be permitted to undertake construction works which have a high level of risk, use high technology and involve high costs.

VALUE OF WORK
Value of construction work for contractor at least Rp. 100.000.000.000,- (one hundred billion rupiah) and the value of construction work for consultants minimum is Rp. 10.000.000.000, - (ten billion rupiah).

"Joint Operation shall be business cooperation between a BUJKA and one or more Indonesian Construction Company (BUJK), which is temporary in nature for handling one or several construction works and it shall not constitute a new legal entity under Indonesian laws and regulations"

BUSINESS LICENSE AND PERMITS

Business licenses and permits that must be owned by a Foreign Construction Representative Office in Indonesia are as follows;
  1. Legal Status of Foreign Construction Company
    1
    Foreign company must obtain a recommendation letter from the embassy of the country of origin in Indonesia stating that the BUJKA concerned is a legally registered and reputable business entity. It is very necessary as the legal status of BUJKA in Indonesia.
  2. Letter of Domicile of Representative Office
    2
    Issued by Local Sub-District Office or Kelurahan in accordance with the office location and address of the company in Indonesia.
  3. NPWP - Tax Registration Number
    3
    Obtain a Taxpayer Identification Number (NPWP) of the BUJKA Representative Office concerned issued by the tax office in Indonesia. This is required before or after the process of certification and registration
  4. Optional; Visa and Working Permits
    4
    Additional licenses and permits if employing foreigners as the head of the Foreign Construction Representative Office or experts.

Certification and Registration of Construction Company

  1. Expertise Certificate (Sertifikat Keahlian / SKA)
    5
    Professionals, such as architects and engineers, need to have a professional certificate from the Construction Services Development Board (Lembaga Pengembangan Jasa Konstruksi/LPJK)
  2. Registration as a member of association of construction company
    6
    Foreign construction representative office (BUJKA) in Indonesia must be a member of one of the associations of the construction company that is accredited or registered in LPJKN.
  3. Business Entity Certificate (Sertifikat Badan Usaha or SBU)
    7
    SBU is given to construction companies as a construction contractor or construction consultant in accordance with the classification and qualification of construction services issued by LPJKN
  4. License of Foreign Construction Representative Office (BUJKA or IUJK)
    8
    After obtaining the SBU issued by LPJKN, BUJKA can apply for a construction services business license (IUJK) in accordance with the classification and qualifications contained in the SBU.
The period of validity of business license (IUJK) for representative office of Foreign Construction Company (BUJKA) is the appropriate period of validity of Business Entity Certificate (SBU), and a maximum of 3 (three) years from the date issued . 

Preparations and step by step guide to set up a Foreign Construction Representative Office in Indonesia