BUJKA in Indonesia is one of the options available to foreign construction service companies seeking to participate in the national construction market. Growing infrastructure development needs, combined with increasingly complex projects in terms of technology, risk, and cost, are creating opportunities for foreign companies with specialized qualifications and capabilities. However, the presence of foreign construction companies in Indonesia cannot be separated from regulations concerning business structures, certification, licensing, cooperation with national business entities, workforce requirements, technology, and project execution.
The main legal framework for this sector comes from Law No. 2 of 2017 on Construction Services, as amended, including through Law No. 6 of 2023. For business licensing in general, the government currently applies Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Business Licensing. The regulation has been in effect since June 5, 2025, and revoked Government Regulation No. 5 of 2021.
In the construction services sector, the Ministry of Public Works currently provides separate licensing services for BUJKN, BUJK PMA, and BUJKA Representative Offices. This shows that foreign construction companies entering Indonesia are subject to specific mechanisms that need to be aligned with their form of business presence and the activities they intend to carry out.
Why Is BUJKA in Indonesia Attractive to Foreign Construction Companies?
Indonesia’s growing construction needs make the national market relevant to foreign companies with specific experience and capabilities. These opportunities are particularly associated with projects requiring technical capacity, advanced technology, international experience, or the ability to manage highly complex projects.
However, Indonesian regulations do not treat foreign construction companies as business operators that can freely enter every market segment. Provisions that remain relevant to BUJKA operations stipulate that BUJKA Representative Offices and Foreign Investment Construction Business Entities, or BUJK PMA, may only provide construction services in market segments that involve high risk, advanced technology, and/or high costs.
This limitation provides a fairly clear picture of BUJKA’s position in the Indonesian market. This route is intended for foreign construction companies whose capabilities are aligned with the needs of large-scale or highly complex projects. In other words, the quality and qualifications of a foreign company are important factors to establish before discussing project opportunities.
The Ministry of Public Works currently states that a BUJKA Representative Office may only be established by a foreign construction services business entity with a large qualification and a construction services certificate from its home country. Foreign non-construction business entities and foreign individuals cannot use this route to establish a BUJKA Representative Office.
After obtaining the required licensing, a BUJKA must also establish an Operational Cooperation, or Kerja Sama Operasi (KSO), with a BUJKN whenever it carries out construction services activities in Indonesia. This means that foreign companies remain positioned within a cooperation structure involving national construction businesses.
The KSO requirement also goes beyond simply having a local partner. Minister of Public Works and Housing Regulation No. 9 of 2019 sets criteria for BUJKN entities that may become KSO partners, including being established as a limited liability company, holding a large-qualification SBU and the same type of business as the BUJKA Representative Office, and meeting the criteria for national business entities established under the regulations.
In the implementation of construction or integrated construction work, at least 50% of the value of the work cost must be carried out domestically, while at least 30% of the value of construction implementation costs must be performed by the BUJKN KSO partner. For construction consultancy services, all work must be conducted domestically, and at least 50% of the value of the work must be carried out by the BUJKN KSO partner.
From a business perspective, these provisions show that access is available to foreign companies, but it is deliberately structured around collaboration with the national industry. The technical qualifications and experience of foreign companies are combined with the capabilities of national business entities serving as project partners.
This model also makes the selection of a local partner a substantive matter. The KSO partner must meet regulatory criteria, possess a large qualification, and operate in a relevant business field. Therefore, foreign companies that identify their target projects and scope of work from the outset will find it easier to map out the cooperation structure they need.
BUJKA Requirements in Indonesia Determine Expansion Readiness
Establishing a BUJKA in Indonesia requires more than preparing the administrative documents of a foreign company. A company’s qualifications in its home country, certification, business classification, representative structure, licensing, and readiness to fulfill local obligations all need to be considered from the beginning.
To establish a BUJKA Representative Office, the foreign company must be a construction services business entity with a large qualification and hold a construction services certificate in its home country. This requirement directly limits the use of the BUJKA structure to foreign construction companies that already possess relevant capabilities and business experience.
Human resource requirements also play an important role. The BUJKA framework requires the use of more Indonesian workers than foreign workers at the expert level and requires Indonesian personnel to accompany foreign workers in management functions and foreign expert positions. BUJKA Representative Offices are also required to prioritize the use of domestic construction materials and technology and to carry out technology transfer.
One detail is particularly important to understand correctly. The Head of the Representative Office or PJBU may be a foreign national. In contrast, the Business Entity Technical Person in Charge, or PJTBU, of a BUJKA Representative Office must be an Indonesian citizen. This requirement is directly confirmed in the official licensing information provided by the Ministry of Public Works.
This distinction shows that BUJKA regulations do not merely govern who is allowed to establish an office, but also regulate how the technical capabilities and business activities of foreign companies are positioned within Indonesia’s construction services system.
Requirements concerning the use of advanced and up-to-date technology, efficiency, environmental considerations, and respect for local wisdom are also part of the BUJKA framework. Foreign companies entering through this route are expected to bring capabilities that add value to project implementation while also supporting the development of domestic capacity.
These requirements are important to assess during the planning stage because they directly affect the company’s operational model. Companies need to determine from the outset whether their technology is relevant to the market segment they are permitted to serve, how their expert workforce structure will be organized, and how KSO obligations with BUJKN partners will be applied to each project.
An understanding of licensing regulations has also become increasingly important because the business licensing regime has changed. Government Regulation No. 28 of 2025 now forms the basis for Risk-Based Business Licensing, covering licensing, OSS services, supervision, evaluation, and sanctions. The regulation confirms that business operators must obtain Business Licensing before starting and conducting their activities.
For construction services, Minister of Public Works and Housing Regulation No. 6 of 2021 is still listed as in force and governs business activity standards and products within the implementation of risk-based business licensing in the PUPR sector.
This means foreign companies entering Indonesia need to consider the general business licensing framework together with sector-specific construction regulations. Relying on outdated procedures without matching them against the regulations currently in force may result in preparations that are no longer aligned with the current licensing mechanism.
Preparing BUJKA in Indonesia With the Right Business Structure
For foreign construction companies, one of the most important steps before starting an expansion is determining the appropriate form of business presence based on the planned activities. A BUJKA Representative Office and a BUJK PMA are two different mechanisms and therefore cannot be treated as interchangeable options.
A BUJKA Representative Office is established by a foreign construction services business entity that meets the large-qualification and certification requirements of its home country. This route then requires the company to establish a KSO with a BUJKN whenever it conducts construction services activities in Indonesia.
Meanwhile, a BUJK PMA is a foreign-investment construction services business entity. The Ministry of Public Works states that a BUJKA serving as the foreign shareholder must be a construction services business entity in its home country, hold a construction services certificate that can be recognized or equated under the applicable provisions, have a large qualification, and conduct the same type of business as the domestic shareholder. The domestic shareholder must also be a BUJKN, hold a large-qualification construction SBU, and conduct the same type of business as the foreign shareholder.
This distinction becomes particularly important when a company develops its expansion strategy. An entity intended to establish a long-term business presence through foreign investment will have different requirements from a company operating through a BUJKA Representative Office and carrying out projects through a KSO.
For this reason, discussion of BUJKA should not stop at the question of how to register. The more fundamental issues are determining the business activities to be carried out, the types of projects being targeted, the required form of business presence, the certifications that must be obtained, and the relationship with national business entities.
Licensing also needs to be mapped according to the company’s actual activities. Under the Risk-Based Business Licensing system, business legality is granted based on the business activities and their level of risk. Government Regulation No. 28 of 2025 provides that Risk-Based Business Licensing includes Business Licensing, Business Licensing to Support Business Activities, norms and standards, OSS services, supervision, and sanctions.
For a BUJKA Representative Office specifically, the Ministry of Public Works currently provides an application service for a verified Standard Certificate, along with other related services, within the construction services subsector. These are handled through specialized construction-sector licensing services, meaning companies need to comply with applicable sectoral requirements rather than simply understanding the general business licensing system.
Structural readiness is also closely related to workforce requirements. When projects require engineers, project managers, specialists, or experts from outside Indonesia, immigration and employment requirements need to be prepared according to their roles within the company. At the same time, companies must ensure that obligations concerning Indonesian workers and accompanying personnel can be fulfilled as required under the BUJKA framework.
This is where local support can provide significant value to foreign companies. The challenge is not simply translating company documents from the home country, but rather matching the company’s business profile, entity structure, classification, certification, licensing, workforce structure, and project plans with Indonesia’s regulatory framework.
Bizindo can assist foreign companies seeking to establish a business presence in Indonesia through Legal Entity Setup, Representative Office, Business Licensing, and consultation on KBLI and business structures. For construction companies that need to determine whether their business presence is better suited to a Representative Office or an Indonesian entity with a foreign investment structure, mapping these requirements from the outset can help minimize structural changes at a later stage.
Once the entity and licensing are in place, the company’s needs generally expand into areas such as Accounting and Tax Reporting for financial administration and tax obligations. When operations begin to require local employees, Recruitment and Employer of Record services can support team formation and workforce administration. For foreign experts assigned to Indonesia, Immigration Services and Expat Relocation can assist with visa, residence permit, and relocation requirements.
For foreign construction companies with experience, technology, and capabilities suited to large-scale or high-technology projects, Indonesia offers a clear avenue for participation. However, that access operates within a framework governing business qualifications, market segmentation, KSO arrangements with BUJKN, workforce requirements, technology, certification, and licensing.
By understanding this structure before entering the market, companies can determine their expansion route based on their actual business needs. Whether they choose a BUJKA Representative Office, establish a BUJK PMA, or prepare another form of business presence suitable for their activities, each option carries different legal and operational implications.
Ultimately, the opportunity for BUJKA in Indonesia lies in a foreign company’s ability to bring the expertise and capabilities needed by the market while operating in accordance with the national construction framework. Proper preparation in terms of structure, licensing, certification, KSO partners, workforce, and compliance will be an important foundation before a company takes part in construction projects in Indonesia.
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