Foreign Construction Company Representative Office (BUJKA) in Indonesia

Foreign investors aiming to expand their construction business to Indonesia have two options – set up a foreign-owned limited liability company (PT PMA), a Special Purpose Enterprise (SPE) or a representative office for their foreign construction company (BUJKA).

This article will clarify the process of setting up a representative office for a foreign construction company in Indonesia.

What is a BUJKA?

Badan Usaha Jasa Konstruksi Asing or BUJKA is a type of representative office that foreign construction firms can establish in Indonesia. Therefore, one of the prerequisites of setting up a BUJKA is to have an existing construction company outside of Indonesia.

A BUJKA is best suitable for larger foreign construction companies since they are only allowed to engage in large-scale construction projects while small size projects are reserved for local construction companies.

Representative offices are not equal to limited liability companies. However, many foreign companies opt for a BUJKA instead of setting up a limited liability construction company (PT PMA) in Indonesia. Mainly because it does not require any local shareholders.

Once a BUJKA is set up, it can participate in tenders and collect information about construction projects all over Indonesia. Even though you don’t need to have local shareholders when setting up a BUJKA, you are required to have a local construction company as your partner by the time the project is being delivered.

Differences between a BUJKA and a PT PMA

Have a look at our previous article for more detailed information about setting up a construction company in Indonesia.

Requirements for a BUJKA in Indonesia

Despite having fewer requirements than limited liability companies, BUJKAs still have some preconditions they need to comply with, as per Regulation No. 5 of 2011 of Minister of Public Works:

• Have joint operation with a 100% Indonesian-owned construction company when delivering projects
• Classified as ‘large-scale’
• Only involved in complex, high-risk, and/or highly technical construction projects

Joint operation with a local construction company

Note that one of the main prerequisites of delivering construction projects in Indonesia is that a BUJKA must have a local construction company as their partner. In other words, they can carry out construction projects only through joint operations with a local PT.

However, BUJKAs are allowed to participate in biddings already before they have a local partner for that project. Furthermore, BUJKAs can have separate partners for different projects whereas construction PT PMAs can only have one as they are considered a joint venture.

Both BUJKA and its local partner will have the same liability regarding the construction.

How to set up a construction company representative office in Indonesia

The process of setting up a representative office for your construction company in Indonesia is divided into three main stages:

#1 Decide on your Classification

#2 Obtain preliminary licenses

In order to be able to start with the BUJKA registration process, you must first get a preliminary permit which consists of 3 sub-licenses:

The total processing time of preliminary licenses can be up to 3 months. With Emerhub, however, it will take up to 3 weeks.

#2 Set up a BUJKA

After you have obtained all the required initial licenses you can proceed with registering your BUJKA:

1. Pay the government a fee of US$ 10,000 for construction service companies or US$ 5,000 for construction consulting companies
2. Obtain BUJKA license from the BKPM (Investment Coordinating Board)
3. Get a Domicile Letter from the local subdistrict
4. Tax Registration
5. Business Registry (TDP)

The total time of setting up a BUJKA is up to 1 month. Also, note that a BUJKA license is valid for three years and can be extended after that.

Setting up a Special Purpose Enterprise (SPE)/ PT

SPE is an alternative to a highly regulated PT PMA when it comes to operating a Limited Liability Company with a construction license (SIUJK). An SPE is a 100% domestic-equity Limited Liability Company (PT) formed through a set of agreements between the beneficiary (your company) and the local shareholdings.

Starting with an SPE is a preferred option for many foreign-companies as this allows them to get a construction license more quickly with fewer requirements.

How to set up PT with SIUJK

# 1 Setting up the Company

# 2 Choosing Classification

# 3 Obtain Preliminary Licenses

# 4 Processing the SIUJK

Where to start?

If you are not sure whether to enter Indonesia by setting up a representative office for your construction company or choose a limited liability construction company instead, book a consultation by filling in the form below.

We will discuss the details of your future construction business in Indonesia and assist you in finding the best solution for your business.