Learn how to become a contractor in Bali and Lombok
In Bali and Lombok, tourism businesses claim fame. Property developments are in progress. Hotels, resorts, and villas can be found in every corner of the city; small or large projects are tempting to build. This has sparked interest in becoming a contractor in Bali, but many are unaware of the strict regulations and requirements within the construction industry. The specific guide will provide the main steps and peculiarities of working in these culturally and economically lively regions. Construction Market Overview The construction sector in Bali and Lombok is not just growing—it’s thriving! Despite the highly regulated nature of the construction industry, it remains one of the most promising business opportunities. Scaling from small to big industries, private or government projects, both are as much as interested to do. Start your investment journey in Indonesia the right way With so many diverse investment opportunities in Indonesia, you need to make sure you’ve got the right setup to do business here. Get help from our team of experts to register your company, navigate the real estate market and secure your visa and stay permit. Schedule a free call with us today to plan your next steps with ILA. Types of construction services. Building a resort, hotel, or even a small house requires preparation. We start by making a drawing, managing the budget, and lastly, building. This process type, known as construction, can be classified into several categories: Construction Consultation Services Construction Work Service Integrated work between construction, consultation, and work service Construction Consultation Services Companies that involve tasks such as drafting, project management, engineering, landscape design, assessment, and planning will be considered as consultants for construction companies. There is also a special consultancy that provides scientific and technical analysis. Construction Work Service This type of construction involves a combination of construction, maintenance, demolition, and reconstruction processes. Essentially, once the planning phase is completed, the construction phase begins. The contractor must align the construction with the consultants’ planned building. Integrated Construction An integrated refers to a company that performs both building and civil construction tasks, including design, engineering, and procurement, all under one roof. Many foreign companies choose this classification when they are involved in government projects. Becoming a successful contractor in Bali and Lombok requires not only expertise but also a clear understanding of the legal and cultural nuances of the local construction market. Whether you’re interested in private ventures or government collaborations, knowing the industry’s complexities is key to thriving in this competitive field. Also read: Guide to Check Company Profile Information in Indonesia Steps to Becoming a Contractor in Bali and Lombok Navigating Indonesia’s complex legal system is a key step for those looking to work as a contractor in Bali or Lombok. As a foreigner or foreign company, you cannot just simply become a contractor; you have to structure your business. Once you have understood the concept of type of construction, here are the steps you need to take. 1. Form a Foreign Construction Business Entity Construction services can be provided by an individual or a corporation. For foreign construction service providers, however, there are various restrictions on starting their firm. A foreign company offering building services that can only conduct business in Indonesia has options such as the following: BUJKA (Badan Usaha Jasa Kontruksi Asing) solely offers high-risk, high-tech, high-cost market segments, starting with consultations (engineering/design) and/or monitoring and supervision services and restricted construction services. An Indonesian national or foreigner with a proper work permit (KITAS) and the necessary certificates can lead BUJKA. BUJKA also has to coordinate a combined effort with accredited national business associations. The benefit of setting BUJKA is that you do not need to inject paid-up capital, and this can be a beneficial strategy for participating in government projects. PT PMA: Foreign Investment Company. PT PMA is limited to classification B (BIG), either for planning, major corporations, or project implementers with project values greater than 100 billion. Forming the company as a Limited Liability Company (PT), it must have a maximum foreign share ownership of 67% for non-ASEAN nations and 70% from ASEAN countries. You have to find a local partner to hold the 30%, and the local partner must have a B classification as well. 2. Getting the Right Licenses The Regulation of the Minister of Public Works and Public Housing No. 8 of 2022 outlines the procedures for fulfilling standard certificates in the construction services sector, aiming to facilitate business licensing for construction service entrepreneurs. Below is a detailed breakdown of the licenses required for Badan Usaha Jasa Konstruksi Asing (BUJKA) and Perseroan Terbatas Penanaman Modal Asing (PT PMA) as stipulated in this regulation. Badan Usaha Jasa Konstruksi Asing (BUJKA). To legally conduct business, BUJKA must establish a representative office known as Kantor Perwakilan Badan Usaha Jasa Konstruksi Asing (KP BUJKA). The licensing requirements include: Establishment of Kantor Perwakilan BUJKA: Foreign construction companies must set up a representative office in Indonesia to oversee their operations. Obtainment of Business Identification Number (NIB): Through the Online Single Submission (OSS) system, BUJKA must acquire an NIB, which serves as a unified business identity. Getting the Construction Service Business License (IUJK) wallow let BUto JKA provide Indonesian construction services. Possession of a Standard Certificate: BUJKA is obliged to have a Standard Certificate comprising: Sertifikat Badan Usaha (SBU) is a certificate attesting to the classification and qualification of the corporate body in building services. Please note that SBU will be a with the ed with the sub-classification that will be performed by the BUJKA. Sertifikat Kompetensi Kerja (SKK): Certificates for personnel, ensuring that key staff meet Indonesian competency standards. The certifneedse nebe signedo have by someone you will hire in the BUJKA. Membership in a Construction Association (KTA): BUJKA must register with a recognised construction association in Indonesia, such as the Gabungan Pelaksana Konstruksi Nasional Indonesia (GAPENSI) or other relevant associations. Membership ensures adherence to professional and ethical standards in the construction industry. PT PMA (Penanaman Modal Asing) For foreign investors aiming to establish a construction