BUJKA Indonesia: Legal Entry Strategy for Construction Companies

Indonesia’s construction industry is offering significant opportunities for foreign firms. However, entering this competitive market requires the right legal strategy. One of the most effective ways for international contractors to get started is through BUJKA Indonesia.

BUJKA (Badan Usaha Jasa Konstruksi Asing) is a special designation that allows foreign construction companies to legally participate in Indonesian construction projects without forming a full subsidiary. This comprehensive guide explains how BUJKA Indonesia works and what it takes to set one up.

Inside Indonesia’s Construction Sector

The market will be valued at over USD 312 billion in 2025, with growth projected at around 5.7% annually. Transportation, housing, logistics, and renewable energy are driving this expansion.

For international firms, entering the market through BUJKA Indonesia offers a practical way to bid on projects and form legal partnerships with local companies—without setting up a full subsidiary.

Key Drivers of Growth

Indonesia’s construction growth is driven by strong public investment, urban development, and rising demand across several key industries. Here’s what’s fueling the momentum in 2025:

• Massive Infrastructure Spending: Over IDR 423 trillion allocated to public works in 2024
• Urban Growth: Expanding cities require new residential and commercial buildings
• Energy Sector Opportunities: Construction demand is rising for power plants and clean energy facilities
• Logistics and Transport Projects: Ongoing upgrades to ports, roads, and airports

How to Set Up a BUJKA Indonesia for Construction Companies

If you’re a foreign construction company looking to operate in Indonesia, setting up a BUJKA is one of the most efficient legal paths. It’s ideal for firms that want to participate in tenders, build partnerships, and explore the market with minimal upfront commitment.

General Requirements

Before applying, a foreign construction company must meet the following conditions:

• Be legally established in its home country
• Have a strong track record, including large-scale completed projects
• Be certified or registered with professional bodies related to construction (if applicable)

Step-by-Step Registration Process

Setting up a BUJKA Indonesia involves several coordinated steps, including:

• Preparing business and legal documentation
• Submitting applications through Indonesia’s OSS system
• Securing the required business and construction certifications
• Registering your office and tax ID locally

Ongoing Compliance

Once your BUJKA is active, you must maintain proper reporting, renew certifications, and ensure project partnerships meet legal requirements.

Rather than navigate this alone, many international firms rely on trusted consultants to handle registration and legal compliance from start to finish.

BUJKA Indonesia vs PT PMA: Which is Right for You?

Choosing the right legal structure is critical when entering Indonesia’s construction sector. Most foreign companies consider two main options: BUJKA or forming a PT PMA. Each has its strengths, and your choice depends on your goals, risk tolerance, and long-term plans.

Feature	BUJKA	PT PMA
Legal Entity	No (representative office)	Yes (Indonesian company)
Setup Time	Faster	Slower
Local Shareholder Required	No	Often Yes
Independent Project Execution	No (must partner via joint operations)	Yes
Ideal For	Tenders, testing market	Long-term operations
Liability	Shared in joint operations	Contained within company

If you’re unsure which route best suits your business, InCorp Indonesia (an Ascentium Company) can explain the pros and cons based on your project scope, timeline, and risk appetite.

How Construction Companies in Indonesia Should Prepare a Construction Agreement

Construction agreements in Indonesia must define commercial terms and comply with mandatory legal requirements under Law No. 2/2017 and Government Regulation 22/2020 (as amended). Contracts need to protect your interests while aligning with the Indonesian regulatory framework.

Key Legal Requirements

• Must be governed by Indonesian law
• Written in both Indonesian and English, with Indonesian prevailing
• Include mandatory clauses like scope of work, payment terms, project documents, and dispute resolution
• Reviewed by a certified contract expert if it’s an integrated service contract (e.g., EPC)

Core Contract Clauses

Make sure your construction agreement includes:

• Scope & Pricing: Clear deliverables, timeline, and unit/lump-sum breakdown
• Payment Terms: Milestones, guarantees, and delay penalties
• Force Majeure & Termination: Define unexpected events and exit terms
• Defect Liability: Set realistic repair terms and liability limits (max 10 years)
• Dispute Resolution: Use arbitration or Dispute Boards, recognized under GR 22/2020

Special Considerations for BUJKA Indonesia

• BUJKA must work through joint operations with Indonesian firms
• Clearly define responsibilities and risk-sharing in the JO agreement
• Contracts must reflect local content obligations and technology transfer efforts
• Regulatory non-compliance may lead to fines of up to 20% of the contract value

Launch Your BUJKA Indonesia Effortlessly with InCorp

Indonesia’s construction sector is layered with regulation, competition, and local nuances. For foreign construction companies, success starts with the right legal entry point.

BUJKA offers a faster, more flexible way to participate in projects, form strategic partnerships, and build a trusted presence without the long timelines or costs of establishing a full subsidiary.

InCorp Indonesia (an Ascentium Company) can assist you with registration, compliance, and contract structuring. Our specialization includes:

• BUJKA registration & licensing
• Construction contract drafting & legal support
• Local partner matching & joint operation setup
• Tender documentation & compliance guidance

Fill out the form below and position your construction company for success in Indonesia.

Frequently Asked Questions