Construction Representative Office (BUJKA)
Foreign investors aiming to expand their construction business to Indonesia have two options – set up a limited liability company (PT PMA) or a representative office for their foreign construction company (BUJKA)
Setting up a Construction Representative Office (BUJKA)
A construction representative office (BUJKA) is a type of Indonesian representative office for foreign construction companies working in the field of construction planning, implementation and/or supervision.
A construction representative office (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.
The functionality of a construction representative office (BUJKA) is limited to:
- Collect information regarding available construction in Indonesia and contact companies/institutions
- Work on construction projects together with a local construction company with acquiring a construction license (SIUJK)
- Take part in tenders
- Hire overseas professionals and Indonesian team of workers
- Apply for a limited stay permit for its foreign executives
- Open a bank account in Indonesia
Reason to choose BUJKA ?
Representative offices are not equal to limited liability companies. However, many foreign companies choose 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.
Therefore, 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.
Differences BUJKA Vs PT PMA :
Both entities are eligible to do business and receive income in Indonesia. The main difference in terms of doing business is that due to BUJKA is not eligible to obtain business license for construction service, hence the entity can not perform any construction work without signing a Joint-Operation Agreement with a local company that has the licenses. While a PT PMA is eligible to do the construction work in Indonesia without any involvement of local company.
Basic Requirements of a Construction Representative Office (BUJKA)
- Joint Operation: A construction representative office (BUJKA) must form a joint operation with a 100% Indonesian-owned construction company to execute projects.
- Criteria of Work: A construction representative office (BUJKA) must be classified as ‘large-scale’ and is involved in complex, high-risk, and/or highly technical construction projects.
- Permit: The permit is valid for 3 years and is extendable.
For Construction Contractor (Implementation and Integrated Constructed Services)
- Net Worth Requirements: A construction representative office (BUJKA) must have a net worth of at least IDR 50 billion or ±USD 4 million.
- Experience Requirements: A construction representative office (BUJKA) must have experience in construction work over the past 10 years with a total cumulative value of at least IDR 250 billion or ±USD 20 million or it must have been involved in a construction project with a minimum value of IDR 83.33 billion or ±USD 6.8 million in the last 10 years.
For Construction Consultant (Planning & Supervision)
- Net Worth Requirements: A construction representative office (BUJKA) must have a net worth of at least IDR 2.5 billion or ±USD 180.000.
- Experience Requirements: A construction representative office (BUJKA) must have experience in Construction Planning and Supervision Services Business for sub-qualification work with a total cumulative value of at least IDR 2.5 billion or ±USD 180.000 obtained within 10 (ten) years.
- Copy of the company’s Article of Association that has been notarized from the country of origin
- Construction Services Business License form the country of origin in accordance with Indonesian law
- Letter of recommendation from the Indonesian Embassy which states that the construction company is legally registered in the country with a good reputation.
- Copy of valid and certified construction service permit of the parent company
- Copy of equalization certificate legalized by an Institute of national level
- Letter of Appointment in regards to the Chief Representative Officer by the parent company
- Record of the latest and audited financial statements of the parent company
- Head of Representative Office documents:
i) Curriculum Vitae or CV
ii) Copy of passport for foreign citizens or copy of Personal ID (KTP) and Tax ID (NPWP) for Indonesian citizens
- Letter of domicile from building management or local official
- Power of Attorney to sign the application if being represented by another party
Steps to Register a Construction Representative Office (BUJKA)
Obtain Preliminary Licenses
In order to be able to start with BUJKA registration process, you must first get a preliminary permit which consists of 3 sub-licenses:
|Membership of Indonesian Contractors Association|
(Kartu Tanda Anggota/KTA)
|Proof of being an officially approved entity, issued by an association in relations to the applied classification in Construction Services Development Board (LPJK).|
|Certificate of Expertise|
|As BUJKA may only carry out the large classification construction work, thus BUJKA shall have 5 experts (which can either be local or foreigner) as per classification applied and proceed the certification.|
|Certificate of Business in Constructions|
(Sertifikat Badan Usaha/SBU)
|Confirmation of your classification and subclassification, whether as a construction planner and construction supervision service or construction service|
Obtain the BUJKA permit
After you have obtained all the required initial licenses you can proceed with registering your BUJKA:
|1||Review of application and issuance of government levy to be paid|
|2||Obtain BUJKA License from BKPM (Investment Coordinating Board)|
|3||Receive all other licenses such as Domicile Letter, Company Tax ID (NPWP), as well as Company Registration Certificate (TDP)|
Get a Quote to Construction Representative Office (BUJKA) Set up in Indonesia
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