Construction Companies Registration

The Minister of Public Works Regulation No.04/PRT/M/2011 on the Guidance on the Requirements to Grant National Construction Service Business License (the “Regulation”) was recently issued, having to consist 17 Articles and 9 Appendixes.

The Regulation in essence serves as a guide to regional government in the issuing of construction service business licenses (IUJK) pursuant to Article 2, stipulating the rights and obligations of construction companies (BUJK), as well as setting the procedure to secure an IUJK.

Pursuant to Article 4(1) an IUJK will be granted by a regional government (Head of regent/Mayor) pursuant to where a BUJK is domiciled. The regional government as set in Article 4 (2) will delegate license issuance to an agency/working unit which specialize in construction services, with other agencies/working units also having the ability to grant an IUJK should a recommendation letter be given by a construction services agency/working unit (Article 4 (3)).

Set in Article 5 (2) types of application that a BUJK may submit to the appointed regional/city government agency are:

Private person which performs construction business must possess a Certificate of Expertise (SKA) and/or a Certificate of Skills (SKT), which are registered at the agency/working unit at which issued an IUJK pursuant to Article 9. Article 9 suggests that the Regulation aims to boost entrepreneurship in the construction service sector.

An IUJK is valid for 3 years from the date of issue and may be extended, having its validity in any Indonesian jurisdiction pursuant to Article 10.

A BUJK that has secured an IUJK is obliged to report any data changes over the BUJK within 14 days after the changes have been made (Article 11 (2 b)). Additionally it must submit the correct and original documents when applying for an IUJK, and also submit an annual report to the agency/working unit which issued the IUJK (Article 11 (2 c)).

Failure to comply with the obligations as set out in article 11 would make the BUJK liable to administrative sanctions including: written warnings, business license suspension, or business license revocation (Article 15 (2)).

The Regulation repeals and replaces the Minister of Housing and Regional Infrastructure Decree No.369/KPTS/M/2001 on the Guidance to Grant National Construction Business License.

The Regulation was issued on 28 March 2011 and has been in force since 4 April 2011.