licensing for construction companies in indonesia

Update on Licensing Procedures for National Construction Service Businesses in Indonesia

  • InCorp Editorial Team
  • 14 October 2019
  • 4 minutes reading time

Effective from June 13, 2019, the Minister of Public Works and Public Housing has enforced Regulation No. 08/PRT/M/2019 (or Regulation 8/2019) on Guidelines for National Construction Service Business Licensing Services. This regulation is enacted for the purpose to fulfill the requirements for standardised business licensing for construction companies in Indonesia.

Regulation 8/2019 has replaced the previous Regulation No. 04/PRT/M/2011 (Regulation 4/2011) on Requirement Guidelines for the Granting of National Construction Service Business Licenses.

Scope of Regulation 8/2019

Regulation 8/2019 addresses licensing regulations for construction service sector, especially at the regional level. This regulation covers the following items:

  1. Types of licenses
  2. Obtaining Construction Service Business Licenses IUJK (Izin Usaha Jasa Konstruksi)
  3. Obtaining Individual Registration Certificates TDUP (Tanda Daftar Usaha Perseorangan)
  4. Implementing Licenses

construction companies in indonesia

Types of Licenses

For the construction service sector in Indonesia, there are two types of applicable license: TDUP and IUJK. Both licenses have to be issued by relevant authorities through the Online Single Submission (OSS) system.

TDUP
This license is given to individuals, covering the construction service operations.

IUJK
This license is released to National Construction Service Enterprises BUJKN (Badan Usaha Jasa Konstruksi Nasional), covering the construction service operations as well.

Holders of TDUP or IUJK are able to participate in the following activities:

  • Construction works
  • Construction consultation
  • Integrated construction works (applicable for IUJK holders only)

Obtaining TDUP

By possessing a TDUP under the new regulation, TDUP will remain valid permanently for Indonesian individuals, as long as the registered services for TDUP are in operation. The following lays out the process of securing a TDUP:

1. Individuals must register via the OSS system to secure the NIB or Business Identification Numbers.

2. TDUP will only be issued when individuals upload the following items:

  • Names and KBLI codes (Indonesia Standard Industrial Classification Codes)
  • TDUP commitment statement

 

3. TDUP commitment must be fulfilled within 30 working days once the TDUP is issued through OSS.

  • For construction consultation, minimum level 8 expert work competence qualification certificates are required
  • For construction works, minimum level 5 technician work competence qualification certificates are required

 

4. Individuals submit all commitment documents. Then, these documents will be verified and validated by DPM PTSP (Investment Units and One-Stop Integrated Service) within five working days.

5. TDUP is only effective when it passes verification and validation, issued by OSS with the approval from DPM PTSP.

Obtaining IUJK

BUJKN that obtains the new IUJK will have a IUJK validity that lasts for as long as the operation is active, instead of the previous three-year validity with the extensions. The process is shown below:

1. The person in charge or PJBU (Penanggung Jawab Badan Usaha) must register via the OSS system to secure the NIB or Business Identification Numbers.

2. IUJK will only be issued when the following items are uploaded:

  • Names and KBLI codes
  • IUJK commitment statement

 

3. IUJK commitment, which is to possess the Enterprise Certificates (SBU), must be fulfilled within 30 working days once the IUJK is issued through OSS.

4. PJBU should submit all commitment documents. Then, these documents will be verified and validated by DPM PTSP within five working days.

IUJK is only effective when it passes verification and validation, issued by OSS with the approval from DPM PTSP.

Implementing Licenses

It is compulsory for TDUP and IUJK holders to perform the following activities during their construction service operations.

Holders of TDUP

  • Submit business activity reports annually
  • Operate a minimum of one construction service project within the valid period of the competence certificates

 

Holders of IUJK

  • Members of BOC and BOD, PJBU and Technical PJBU of BUJKN, should not hold similar positions in other construction service companies in Indonesia. Evidence must be shown on affidavits
  • Submit business activity reports annually
  • Organise construction services according to BUJKN market segments and related qualifications
  • Operate a minimum of one construction service project within the three-year valid period of SBU
  • Employ construction employees with competence certificates

How Cekindo can Help

Cekindo helps entrepreneurs and international businesses to set up construction companies and other companies as well in Indonesia. Our team of professional consultants and legal specialists can also assist you in applying for relevant business licenses in Indonesia.

Talk to our experts now and we will guide you further. Fill in the form below or visit one of our offices in Jakarta, Bali and Semarang.

Verified by

Hotdo Nauli

Senior Legal & Delivery Manager at InCorp Indonesia

Hotdo heads the Legal and Delivery team at InCorp Indonesia, managing Product Registration, Legal Advisory, and Business Licensing. With over 8 years of experience, she focuses on compliance and integrity, ensuring all client operations align with Indonesian laws and regulatory standards, including contract reviews and sector-specific licenses. She is also a licensed advocate and a member of the Indonesian Advocates Association (PERADI). 

Frequently Asked Questions

    A PMA company in Indonesia must obtain an NIB, which also functions as:

    • Importer Identification Number (Angka Pengenal Impor or API)
      Producer Importer Identification Number (Angka Pengenal Impor Produsen or API-P), which is required for the import of machinery and equipment, goods, and materials used in production.
      General Importer Identification Number (Angka Pengenal Impor Umum or API-U), which is required for the import of specific goods for trading purposes, is grouped under one section in the Customs Classification System.
    • Customs Identification Number (Nomor Identitas Kepabeanan or NIK), It functions as an identifying document for the applicable Customs and Excise authorities during the customs clearance process.

    Some goods may face limitations or restrictions on importation in Indonesia, potentially requiring additional approval from the Ministry of Trade. Recommendations from technical ministries like Industry or Agriculture may influence these approvals.

    According to Presidential Regulation No. 10/2021 and the amended version, all businesses are open for domestic and foreign investment with these limitations and classifications:

    • Eight businesses are closed to foreign investment and may be operated by the central government.
    • Designated business sectors or joint ventures with cooperatives (koperasi) and micro, small, and medium enterprises
    • Open businesses are subject to specific conditions, such as those that are exclusively available to 100% local investors, those with restricted foreign shareholding, and investments requiring special licenses

    Certain sectors are closed to foreign investment, including narcotics cultivation, gambling, and environmental conservation activities.

    The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location.

    To provide you with accurate pricing information for our product registration services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, don’t hesitate to contact our consultants.

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Disclaimer

The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

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