Opening a construction representative office (BUJKA) in Indonesia
A representative office is an office set up by a company overseas. Representative offices take care of their parent company’s business locally. It’s also an easy way to enter a foreign market.
In Indonesia, there is a specific representative office for construction companies called Badan Usaha Jasa Konstruksi Asing (BUJKA).
Requirements and Prerequisites for BUJKA
Only foreign “large-scale” construction companies may open a BUJKA. The process to open a BUJKA starts with applying for a preliminary permit by obtaining the following sublicenses:
- Membership of Indonesian Contractors Association (Kartu Tanda Anggota/KTA)
- Certificate of Expertise (Sertifikat Keahlian /SKA)
- Certificate of Business in Constructions (Sertifikat Badan Usaha/SBU)
After getting the preliminary permit, the parent company can proceed with setting up the BUJKA by preparing the following:
- BUJKA license, obtained from the One Single Submission (OSS))
- Tax registration
The location of the office of a BUJKA is not specified by the law. You can open a BUJKA office anywhere as long as it is in a commercial building. There is also no set minimum capital requirement for a BUJKA.
Timeline to set up BUJKA
Setting up a BUJKA involves getting some documents together. The timeline in the table below shows how long it would take to establish a BUJKA with Emerhub.
|Initial licenses of SBU, KTA, and SKA from Constructions association||1 month|
|Review of application and issuance of Government Levy to be paid||5 working days|
|Representative Office of Construction Company License/ BUJKA||3 working days|
|Tax registry||2 working days|
|TOTAL||1 month and 10 working days|
Allowed activities for BUJKA
BUJKAs can conduct typical business activities like:
- Hire foreign experts
- A BUJKA can apply for work permits for its foreign employees
- Hire Indonesian staff
- Open a local bank account
BUJKAs can also perform construction-related activities including:
- Contact companies and institutions and collect information about available construction projects in Indonesia
- Participate in tenders
The types of projects a BUJKA can work on must be complex, high-risk, and/or highly technical. Only local construction companies can work on smaller projects.
A BUJKA can work on construction projects if it has a local construction company (BUJK) as its partner. The construction company must be a limited liability company and 100% Indonesian-owned meaning it cannot have any foreign shareholders.
BUJKAs can participate in bidding even if they have not found a local partner for their prospective projects. Additionally, BUJKAs can partner up with different BUJKs for each project.