Indonesia Construction Business Entry Guide

(From Company Establishment to SBU Certification)

1. Entry Forms for Foreign Construction Companies in Indonesia

Foreign construction companies looking to enter the Indonesia construction market can choose among three main legal structures: PMA company, BUJKA representative office, and PMDN local company.

1) Foreign Investment Company (PMA)A PMA is classified as a foreign investment company when foreign ownership is 1% or more. Establishing a PMA allows a company to operate construction activities independently in Indonesia.

• Minimum paid-up capital: IDR 10 billion

• Requires registration with BKPM (Investment Coordinating Board)

• A local partner’s minority shareholding may be required for regulatory and operational reasons.

  
  

2) Foreign Construction Representative Office (BUJKA)A BUJKA functions as a representative office of a foreign construction firm. It cannot execute projects independently and must partner with a local construction company through a Joint Operation (JO/KSO). This form is often used for EPC and large-scale infrastructure projects.

3) Local Company (PMDN)A PMDN is 100% locally owned by Indonesian nationals. It usually collaborates with BUJKA entities to form JOs for construction project implementation.

2. Construction Business Classification (KBLI and Subclassification)

Under Indonesian law, construction activities are classified by KBLI codes (Standard Industrial Classification). Choosing the right subclassification determines your license type, SBU scope, and project eligibility.

Integrated Construction (EPC) — covers Engineering, Procurement, and Construction; codes include 41011 (Building) and 42911 (Civil Works).Construction Services — for specialized works such as mechanical, electrical, or power plant installation; codes include GT003, GT008, and ST001–ST010.Construction Consultancy — includes design, supervision, and project management under 71102 (Engineering Services).

👉 Choosing the right KBLI ensures compliance and successful SBU registration with LPJK.

3. SBU (Sertifikat Badan Usaha – Construction Business Certificate)

To operate legally, every construction company must obtain an SBU certificate from LSBU (Accredited Institution) under the Ministry of Public Works and Housing (PUPR) and LPJK.

Steps to Obtain an SBU:

1) Register the company (PMA or BUJKA) and get NIB via the OSS system.

2) Apply to LSBU for the selected KBLI/subclassification.

3) Prepare documents: incorporation deed, NIB, NPWP, office lease, capital proof, SKK-qualified professionals, and equipment documents.

4) LSBU assessment (document review and site verification if required).

5) Receive the SBU, valid for 3 years (renewable).

💡 A valid SBU is required for public tenders and government infrastructure contracts.

4. Sertifikat Standar under OSS-RBA

Under Indonesia’s OSS-RBA (Online Single Submission Risk-Based Approach), construction companies classified as medium- or high-risk must obtain a Sertifikat Standar (Standard Certificate).It confirms that the company meets professional and technical competence standards, and is essential for EPC contractors and foreign construction companies.

5. Joint Operation (JO/KSO) Rules for BUJKA

A BUJKA representative office cannot act independently.It must establish a Joint Operation (JO/KSO) with a local construction firm holding an equivalent SBU license.

1) The JO agreement must be notarized and registered with the Tax Office.

2) The JO is treated as a separate taxable entity obligated to file Final Tax, VAT, Withholding, and Income Tax reports.

💡 JO registration is a critical compliance step for foreign contractors in Indonesia.

6. Summary of Steps

1) Choose legal structure (PMA or BUJKA)

2) Reserve company name and complete notarial registration (AHU)

3) Obtain NPWP and NIB

4) Select KBLI and subclassification

5) Prepare SKK-certified staff and equipment list

6) Apply for SBU through LSBU/LPJK

7) Obtain Sertifikat Standar

8) Register Joint Operation (JO) if required

7. Conclusion: Build Your Business on a Strong Foundation

Entering the Indonesian construction industry requires:

1) legal establishment (PMA/BUJKA),

2) proper KBLI selection,

3) obtaining SBU and Sertifikat Standar, and

4) compliance with JO regulations.

By preparing these systematically, foreign contractors can establish a legally compliant and competitive presence in Indonesia’s booming construction and infrastructure market.

INi Consulting specializes in assisting foreign investors and contractors with every step — from PMA setup and BUJKA licensing to SBU and OSS-RBA compliance.With our proven experience, we help your company obtain construction licenses efficiently and succeed in the Indonesian market.

📞 Contact INi Consulting for professional support with your Indonesia construction license process.🌐 Visit www.iniconsultingfirm.com for more information.