Taking the latest regulation as reference, Omnibus Law, Article 109 (3) states that a Company is required to have authorized capital, the amount of this capital is determined based on the decision of the company founder and accordingly, at least 25% of the authorized capital must be fully issued and paid-up. This regulation amend some parts of its preceding law, namely Law Number 40 of 2007 on Limited Liability Companies (“Law 40/2007”).
‘Paid Up Capital’ means any amount (even if the capital concerned hasn’t been paid in full) of money that has already been paid by investors in exchange for shares of stock, when the amount of issued share capital has already been fully paid, the ‘Paid Up Capital’ has become ‘Paid Up Share Capital’. Meanwhile, ‘Issued Capital’ means the value of shares the company can actually issue to potential investors, the total amount of shares that have been given to shareholders will then be called ‘Issued Share Capital’.
Note: The fully issued and paid-up capital is proven by a valid deposit receipt and any subsequent issue of shares that are performed each time (to increase issued capital) that must be fully paid-up.
Article 36 (1) of Law 40/2007 states, “A Company is prohibited from issuing shares to be owned by itself or to be owned by another company whose shares are directly or indirectly owned by the Company.” This excludes, however, in situations where ownership of shares are acquired from transfer due to law, grant, or bequest. On acquiring shares through mentioned means, the shares concerned must be transferred to another party (not prohibited from owning shares in the Company) within a period of 1 year after the date of acquisition.
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]]>First and foremost, each company is required to have ‘Authorized Capital’. The amount of authorized capital of the company is determined based on the decision of the company founder. Through owning a certain amount of Authorized Capital, it as well determines the total number of shares that can be issued by the LLC. Whilst, the numbers of shares used as Authorized Capital is called ‘Article of Assosciation’, this is the “pure face value” of the company’s share capital.
That said, whenever an LLC decides to whether ‘Increase’ or “Reduce’ their Authorized Capital, it will effect the total number of shares that LLC can issue.
Article 41 (1) of Law Number 40 of 2007 on Limited Liabiliy Company (“Law 40/2007”) states that an ‘Increase’ of capital is made by the approval of the General Meeting of Shareholders (“RUPS”) consensus. RUPS has the capacity to delegate the authority to approve the implementation of RUPS resolution to the Board of Commissioners, for a maximum period of 1 (one) year and maybe withdrawn at any time by them as well.
As said previously, only through the RUPS that the decision for increasing capital can occur. They do this through the process of resolution to increase the authorized capital that is adopted with due regard to quorum requirements and number of assenting votes for an amendment to the articles of association. The quorum mentioned means an attendance quorum must be more than ½ (one-half) of the total number of shares with voting rights and approved by more than ½ (one-half) of the total number of votes casted, unless a greater number is stipulated under the articles of association. Only after, such procedures and resolution has been achieved then the company must notify such changes to the ministry related to be recorded in the Company Registry.
A ‘Reduction in Capital’ is an amendment to the articles of association that must secure an approval from the Minister. The approval from the Minister shall be granted if:
Similar to the process of “Increase of Capital’, the reduction in capital must as well followed through the resolution of company’s RUPS. However, as additional requirement for the implementation procedure of the reduction in capital, the Board of Directors must notify the resolution to all creditors by way of announcing it in 1 Newspaper or more within a maximum period of 7 days from the date of the RUPS resolution.
A RUPS resolution on the reduction in the issued and paid-up capital is carried out by withdrawing shares or decreasing the par value of shares. The withdrawal of shares is carried out toward shares that has been bought back by the Company or shares classified as revocable shares. The reduction of par value of shares without buyback must be conducted in proportional manner toward all shares of each classification of shares. The proportional manner in reduction of par value of shares without buyback may be exempted with the approval of all shareholders whose par value of their shares has been reduced.
Note: In the event of there are more than 1 classification of shares, then the RUPS resolution on the reduction in capital may only be adopted after firstly securing approval from all shareholders of each classification of shares whose rights are injured by the RUPS resolution on the reduction in capital in question
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]]>Taking the latest regulation as reference, Omnibus Law, Article 109 (3) states that a Company is required to have authorized capital, the amount of this capital is determined based on the decision of the company founder and accordingly, at least 25% of the authorized capital must be fully issued and paid-up. This regulation amend some parts of its preceding law, namely Law Number 40 of 2007 on Limited Liability Companies (“Law 40/2007”). According to Law 40/2007,
‘Paid Up Capital’ means any amount (even if the capital concerned hasn’t been paid in full) of money that has already been paid by investors in exchange for shares of stock, when the amount of issued share capital has already been fully paid, the ‘Paid Up Capital’ has become ‘Paid Up Share Capital’. Meanwhile, ‘Issued Capital’ means the value of shares the company can actually issue to potential investors, the total amount of shares that have been given to shareholders will then be called ‘Issued Share Capital’.
Note: The fully issued and paid-up capital is proven by a valid deposit receipt and any subsequent issue of shares that are performed each time (to increase issued capital) that must be fully paid-up.
Article 36 (1) of Law 40/2007 states, “A Company is prohibited from issuing shares to be owned by itself or to be owned by another company whose shares are directly or indirectly owned by the Company.” This excludes, however, in situations where ownership of shares are acquired from transfer due to law, grant, or bequest. On acquiring shares through mentioned means, the shares concerned must be transferred to another party (not prohibited from owning shares in the Company) within a period of 1 year after the date of acquisition.
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Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
]]>Franchise or Waralaba in Bahasa Indonesia, is a special right that is granted to individuals and/or businesses in relation to certain business systems with business characteristics that involve the promotion of goods and/or services, that have been proven successful and that may be utilized and/or used by other parties based on franchising agreements. To put simply, a franchise is a business model that offers partnership agreements as a way to tackle the rapid growth of a company in an effective and productive manner.
Just as stated above, the establishment of franchise is based on franchising agreements, which includes a set of documents consisting: Franchise Offer Prospectus and Franchise Agreement. By definition provided by the law, a Franchise Offer Prospectus is a written information from Franchisors which (at least) describe the identity, legality, activities’ history, organizational structure, financial statement, amount of the place of business, list of Franchisees, right and obligation of Franchisors and Franchisees, as well as Intellectual Property Rights of the Franchisors. A Franchise Agreement, on the other hand, consists of the written agreement between Franchisors and Franchisees or Advanced Franchisors and Advanced Franchisees.
Essentially, whether individuals or business entities are allowed to establish a Franchise. However, these subjects are further divided into four parties that might be involved in a Franchising Agreement, namely: Franchisors and Franchisees or Advanced Franchisors and Advanced Franchisees. Separately defined, Franchisors are individuals or business entities who grant the right to utilize and/or use the Franchise they owned to the Franchisees. While Franchisees are individuals or business entities who are granted the right to utilize and/or use the Franchise owned by the Franchisors. The only difference between a regular Franchisor/Franchisee and Advance Franchisor/Franchisee lies in their ability to proceed ahead with either the right by Franchisors to appoint Advanced Franchisees (for Advanced Franchisors) or the right by the Advanced Franchisors to utilize and/or use the Franchise (for Advanced Franchisees).
Additionally, these parties are divided into eight types basing on the origins of the parties involved. They are:
There are mainly six criterias that need to be fulfilled for a franchise to be deemed legitimate in the view of Indonesia’s positive law, these are:
This means a business with excellence or difference which is hard to imitate compared to other similar business, which urge consumers to always seek for such characteristic, for example management system, method of sales and services or arrangement, or method of distribution which are the special characteristics of the Franchisor.
Franchisors must have at least five years’ experience and must have ways of resolving any business issues that arise, as proven by the sustainability of a Franchisor’s business.
Inexperienced Franchisees must be able to run the business in accordance with operational and managerial guidance that is provided by the relevant Franchisor.
Support in this case relates to the sustainability and stability of the business’ operations that include: Operational guidance; Training; and Promotions.
These IP rights would include registered and certified elements or elements that are in the process of being registered. The rights might consist: 1) Trademarks; 2) Copyrights; 3) Patents; 4) Licenses; and/or 5) Trade secrets.
Note: In case provisions above are not fulfilled, Individuals/Business Entities are not allowed to use Franchise’s term and/or name for their name and/or business activities.
Specification regarding Franchise Logo is disclosed in Appendix III of Regulation of the Minister of Trade Number 71 of 2009 on Organization of Franchise. A Franchise Logo that’s been registered must be placed or installed in an open and easily visible place in either, the franchise’s head office; or every of the franchise outlet. Process of obtaining a Franchise Logo includes the Franchise organizers submitting their Franchise Logo application in writing to the Director of Business Development and Distributors, which must at least contain the amount and location of outlets/places of business as the plan of distributions.
A Franchise Agreement is conducted through an ‘Offer-Acceptance’ contractual process that consists of Party A (Franchisors or Advanced Franchisors) delivering a Franchise Offering Prospectus to Party B (prospective Franchisees or prospective Advanced Franchisees) in no later than 2 (two) weeks prior to the signing of Franchise Agreement. The contents of the Franchise Agreement must adhere to the materials and/or clauses that are written in Appendix II of Regulation of the Minister of Trade Number 71 of 2009 on Organization of Franchise.
Note: Franchise Offering Prospectus must contain at least materials or clauses as written in Appendix I regarding ‘Material or Clause of Franchise Offering Prospectus’, and be written in or translated to Bahasa Indonesia. Additionally, Franchise Offering Prospectus registered by Franchisors From Abroad must be legalized by a Public Notary by enclosing a statement letter from Attaché of Trade of the Republic of Indonesia or the Indonesia Representative Office Official in the country of origin.
Prior to the process of Franchise Agreement, Franchisors or Advanced Franchisors must register their Franchise Offering Prospectus in order to draw up the main Franchise Agreement. The registration procedure for these documents are conducted through submission for application of Franchise Registration Certificate (Surat Tanda Pendaftaran Waralaba or “STPW”) via the OSS system as the Franchise Organizer would require to secure a Business License (“NIB”) in order to proceed with the registration process of obtaining the STPW.
Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
]]>Fore a more thorough explanation the topics of Business Entities and Representative Office, take a look at our previous articles concerning these topics.
Although similar, the concept of Representative Office and Foreign Business Entity is different. Representative Offices (“KPPA” or Kantor Perwakilan Perusahaan Asing) is an alternative method for foreign companies to establish their businesses in Indonesia. The functions of a representative office is limited as it cannot engage in commercial activities (profit-generating activities, issue invoices, and enter into contracts). Its main purpose is to serve as intermediary between the parent company and its clients. This is because a representative office is not a separate legal entity moreover, it acts as the extension of its parent company. Foreign Business Entity, on the other hand, Foreign Business Entities are foreign business entities that are established outside the territory of Indonesia and that carries out business and/or activities in certain sectors.
According to Regulation of the Investment Coordinating Board Number 4 of 2021 on Guidelines and Procedures For Risk-Based Business Licensing Services and Investment Facilities (“BKPM Regulation 4/2021”), Article 9 (11). There are four types of Foreign Business Entities, namely:
In accordance with BKPM Regulation 4/2021, both Representative Offices and Foreign Business Entities must comply with provisions regarding ‘Risk-Based Licensing’. Thus, in relation to its application as an entity, Foreign Business Entities are required to follow the same procedures as any other Business Actors, namely submission of application through the OSS System, therefore complying with the provisions regarding KBLI.
According to Government Regulation Number 5 of 2021 on The Organization of Risk-Based Business Licensing (“Government Regulation 5/2021”), Article 6 (3). Risk-Based business licensing consists of the following arrangements:
In relation to the requirements regarding ‘Investment Value and Capital’, for Foreign Business Entities as stated in the BKPM Regulation 4/2021, Article 13 – Foreign Business Entities are Business Actors that are categorized as ‘Foreign Investors’ under the existing provisions in Indonesia, accordingly, it should have followed the same sets of requirements of Investment Value and Capital of PT PMA. However, in accordance with mentioned regulation, “Foreign Business Entities are exempted from the provision regarding the investment value and capital as referred previously towards PT PMA’s Total Investment requirements”.
To recap, Foreign Business Entities are foreign business entities that are established outside the territory of Indonesia and that carries out business and/or activities in certain sectors. It consists of four types, namely: Franchisors From Abroad; Foreign Futures Traders; Foreign Private Electronic System Organizer; and Permanent Establishment. And, it follows the provisions regarding Risk-Based Business Licensing that is regulated under the management of Ministry of Investment / Indonesia Investment Coordinating Board (BKPM). Although similar, the establishment of such entity might prove to be different with the establishment process of regular companies. We at Selaras Law Firm (SLF) provides you up-to-date information and consultation on all things related to business development and investment. Contact us through our contacts at pur Company Profile below to schedule your appointment.
Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
]]>“PEMILU” (Pemilihan Umum) or the General Election in english is held once every five years with the purpose to decide the next president & vice president as well as the next batch of politicians that will hold authority of Indonesia’s political and regulatory climate for the next period of administration. PEMILU is divided into four categories: PEMILU for the People’s Representative Council [“DPR”], PEMILU for the Regional Board [“DPD”], PEMILU for the Regional Representative Council (“DPRD”), as well as PEMILU for the next President & Vice President of Indonesia.
The process of the General Election by simultaneously selecting said four categories is done due to a factor called the “Selection Divisor Number” (Bilangan Pembagi Pemilihan or “BPP”). This number is obtained through the division of total voting result and total amount of seats available in each region to decide the total of seats received for the participants’ political party and the determination of the new members of DPR, Provincial’s DPRD, and District/City’s DPRD.
The general rules and procedures concerning the election is generally covered in the 1945 Indonesia’s Constitution (“UUD 1945”), further explained in present implementing regulations, namely Law Number 7 of 2017 on General Election (“Law 7/2017”) and Regulation of the General Election Commission Number 29 of 2019 on Technical Guidelines for the Implementation of Voting and Counting of Votes at Polling Locations in the 2009 Presidential and Vice Presidential General Elections (“Regulation of the General Election Commission 29/2019”).
Essentially, the presidential candidate for the election must conform to this set of requirements:
Note: These requirements have been summarized in accordance with the laws regulating it.
Relating to the parliament’s PEMILU rules and procedures, it is as well generally regulated within the 1945’s Indonesia’s Constitution (UUD 1945). Further defined within Law 7/2017 and Regulation of the General Election Commission Number 6 of 2009 on Changes to General Election Commission Regulation Number 34 of 2008 Concerning 2009’s Voting Letters of Candidate Members of The Council of Representative Council, Provisional Regional People’s Representatives, and District/City’s Regional People’s Representative Council As Amended By Election Commission Regulation Number 36 of 2008 (“General Election Commission Regulation 6/2009”).
First and foremost, the participants of the parliament’s election are political parties. The main requirement of a political party’s ability to join in the election is through the determination done by the General Election Commission’s (“KPU”) via its verification process. This validation process would include fulfilling these requirements:
Note: In the case of PEMILU for DPD, it is done independently. Without the affiliation of any political parties.
From possessing seats at the parliament which implies the maintenance for influence of certain political parties to representing conccuring issues related to the livelihood of the people of indonesia, whether for personal or ideological purposes. The General Election is the ultimate form of democracy. It provides for regeneration and justice for the people of Indonesia to channel their aspirations as rightful citizens of the country.
However, what is easily spoken and said proves to be more difficult in practice. In reality, corruption and greed of power runs rampant. With the rich and powerful holding the status quo, leaving scraps to the common people to fend and survive in the ever worsening economical, environmental, and societal situations. Nonetheless, change doesn’t come from the cynic and fearful. It happens through the humility and empathy of persons to keep learning and strive for the justice of all people.
Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
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According to the provisions of existing law, Drugs or narcotics distribution is defined as any narcotics delivery activities, in the context of trading, not trading, or transfer for the purposes of health service and development of science and technology. As it is, the act of narcotics distribution occurs between certain locations as well as between countries. These are called conveyance and narcotics transposition, accordingly. As such, these transits would require specific actors to take part, namely, exporters and importers.
The exports of narcotics is divided between the exports of: Pharmaceutical Precursors Production (“Pharmaceutical Precursors EP”), Registered Psychotropics (“Registered Psychotropics ET”), Registered Pharmaceutical Precursors (“Registered Pharmaceutical Precursors ET”). For narcotics exporters to conduct their business, they;d need to fulfill the main requirements of having an Export Approval Letter (“SPE”) and the corresponding special export business permits.
According to the law, holders of the certificates mentioned above must firstly notify the relevant ministry 3 (three) days prior to the scheduled exportation (pre-export notification or “PEN”). The contents of said notification include:
Just like narcotics exports, its importation requires several classifications as well. These are: Psychotropics Production Importer (“Psychotropics IP”), Pharmaceutical Precursors Production Importer (“Pharmaceutical Precursors Production IP”), Registered Psychotropics Importer (“Registered Psychotropics IT”), Registered Pharmaceutical Precursors Importer (“Registered Pharmaceutical Precursors IT”). And just as well, narcotics importers require Import Approval Letter (“SPI”) and the corresponding special import business permits to be able to conduct their business.
The capacity that’s available between Registered (IT) and Non-Registered (IP) differs in terms of its rights of production usage and commercialization. An IP type of importation allows the holder of such a certificate to conduct importation for the purpose of its own production and is prohibited to commercialize and.or transfer of narcotics. On the other hand, IT certification only allows its holder to import narcotics based on the order of scientific institutions that is directly being distributed towards such institutions. They are also prohibited to commercialize and/or transfer the narcotics mentioned.
Note: The publication and authentication of SPI and SPE in Indonesia is done through its application via the Indonesian National Single Window integrated system.
It is important to take note that in the case of Private Pharmaceutical Industry, the special business permits owned only applicable towards their own needs and capacity. This proves to be a different case when it comes to the Government’s Pharmaceutical Industry. In which, they’re allowed to conduct distribution towards other Pharmaceutical industries that hold mentioned special business permits.
This classification of narcotics imports and exports is crucial as it provides clear understanding on the roles that they take in their responsibilities to maintain the security of narcotics distribution and usage in Indonesia, as mandated in P4GN (Pencegahan dan Pemberantasan Penyalahgunaan dan Peredaran Gelap Narkotika dan Prekursor Narkotika). We at Selaras Law Firm (SLF) understand the importance of regulatory compliance and adaptability when it comes to such sensitive matters. Thus, we encourage you to contact us through our Contact Information below for consultation and/or legal services.
Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
]]>In Indonesia, the law regulating drugs are divided into several categories: Narcotics, Psychotropics, and Pharmaceutical Precursors. The definition given by Regulation of the Minister of Health Number 25 of 2023 on Narcotics, Psychotropics, and Pharmaceutical Precursors (“Regulation of the Minister of Health 25/2023”), Article 1 states that Narcotics are substances or drugs which can cause a decrease or change in consciousness, loss of taste, reduce or eliminate pain, and can cause dependence. While, Article 2 defines Pshchotropics as substances/raw materials or drugs, non-narcotics, which have psychoactive properties through selective influence on the central nervous system which causes characteristic changes in mental activity and behavior. And finally, Article 3 of the same regulation provides that Pharmaceutical Precursors means substances or starting materials or chemicals that can be used as raw/auxiliary materials for the purposes of the Pharmaceutical production process products that contain some specific substances*.
In this article, we’ll take a look at the definition of Narcotics and Psychotropics as well as it categorizations to start off in our journey to understand the law on drugs here in Indonesia.
*) Note: The substances mentioned include: ephedrine, pseudoephedrine, norephedrine/phenylpropanolamine, ergotamine, ergometrine, or potassium permanganate.
Regulation of the Minister of Health Number 30 of 2023 on Changes In the Classification of Narcotics (“Regulation of the Minister of Health 30/2023”) and Law Number 5 of 1997 on Psychotropics (“Law 5/1997”), regulate Narcotics and Psychotropics, each into three classes.
Taking reference from Regulation of the Minister of Health 30/2023, there are three narcotics classifications:
Narcotics Class I includes drugs that are prohibited from being used for general health services. However, in certain cases, the drugs classified as such can still be used in limited quantities as long as it is used for the purposes of the development of science and technology as well as for diagnostic and laboratory reagents, and after obtaining approval from the Minister on the recommendation of the Head of the Food and Drug Supervisory Agency.
The drugs classified into the Narcotics Class II category, includes medicinal properties which have a high potential of causing dependency that are ONLY used as a last resort as well as for therapy and/or for scientific development purposes. Requirements that need to be fulfilled for parties who are planning to take or distribute these drugs must have valid proof of ownership and administration of the narcotics.
The drugs consisted in Class III has the same requirements as the prior classifications. However, the drugs in this category have lesser risk of dependency in comparison with its predecessors.
Note: Take a look at contents within the Regulation of the Minister of Health 30/2023 for further details regarding the drugs and substances that are prohibited.
Taking reference from Law 5/1997, there are four psychotropics classifications:
The psychotropics in this class contain potent substances that can lead to high dependency. Hence it can ONLY be used for general health services and scientific means and cannot be used for therapy purposes.
Psychotropics in this category contain strong substances which can lead to dependancy, however, these drugs just as well, include substantial medicinal properties and is often used in therapeutic and/or scientific purposes.
Psychotropics in this category contain intermediate substances which can lead to dependancy. It is allowed to be used as therapeutic and/or scientific purposes.
The psychotropics in this classification contains small amounts of substances which can lead to dependency, but also containing substantial medicinal properties. Hence it is used widely for the purposes of therapy and/or scientific means.
This article covers the general basis that you’d need to know when diving deep into the drugs regulatory system in Indonesia. Stay tune to our social media and website to get your next update regarding this issue!
Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
]]>Representative office of Foreign Construction Service Business Entity (Badan Usaha Jasa Konstruksi Asing or ‘BUJKA’) is a Business Field that is established under the Foreign Construction Service Entity’s country of origin and is equalized within the status of other LLCs that work in the construction service business field. For a BUJKA to be established, the enterprise must own Business Entity Certificate (Sertifikat Badan Usaha or “SBU”), this certificate is published under the authority of the national-level of the Board of Management Development Institutions’ National Construction Services (“LPJK”). The activities and legislative process of the construction industry here in Indonesia is run by LPJK. While the execution for BUJKA’s SBU as proof is authorized under the Director of Registration and Legal Affairs of the National LPJK Implementing Agency.
As a continuance of our previous article ‘Representative Office: Details Please’. In this article, we’ll take a look at the LPJK Regulation 1/2015 on Foreign Construction Service Registration to base our explanation on BUJKA.
BUJKA’s services include: Construction Planning and Supervision Services Business, Construction Implementation Services Business and Integrated Construction Services Business. These services are divided into several classifications where each requires its own certifications. These include:
With the classifications, consisting of:
The ‘Architectural Plan’ classification consists of further sub-classifications, which are described below:
a. Architectural Advisory and Pre-Design Services;
b. Architectural Design Services;
c. Building Maintenance and Feasibility Assessment Services;
d. Interior Design Services;
e. and Other Architectural Services.
The ‘Engineering Plan’ classification consists of further sub-classifications, which are described below:
a. Engineering Advisory and Consultancy Services;
b. Engineering Design Services for Foundation and Building Structure Construction;
c. Engineering Design Services for Water Civil Engineering Works;
d. Engineering Design Services for Transportation Civil Engineering Works;
e. Engineering Design Services for Mechanical and Electrical Work in Buildings;
f. Engineering Design Services for Industrial and Production Processes;
g. Advisory and Consultation Services Construction Engineering Services;
h. Other Engineering Design Services.
The ‘Spatial Planning Plan’ classification consists of further sub-classifications, which are described below:
a. Urban Planning and Design Services;
b. Regional Planning Services;
d. Building and Landscape Environmental Planning and Design Services;
e. Space Utilization Development Services.
The ‘Architectural Surveillance’ classification includes: contract administration supervisory services.
The ‘Engineering Surveillance’ classification consists of further sub-classifications, which are described below:
a. Building Construction Work Supervision Services;
b. Transportation Civil Enginnering Construction Work Supervision Services;
c. Water Civil Enginnering Construction Work Supervision Services; and
d. Supervision Services for Construction Work and Installation of Industrial Processes and Facilities
The ‘Spatial Planning Surveillance’ classification includes: spatial planning supervisory and controlling services.
The ‘Engineering Surveillance’ classification consists of further sub-classifications, which are described below:
a. Geological and Geophysical Prospectus Making Services;
b. Underground Survey Services;
c. Land Surface Survey Services
d. Map Making Services
e. Composition and Purity Level Testing and Analysis Services;
f. Physical Parameter Testing and Analysis Services;
g. Mechanical and Electrical System Testing and Analysis Services; and
h. Technical Inspection Services
The ‘Other Consultation Services’ classification consists of further sub-classifications, which are described below:
a.Environmental Consultancy Services;
b. Land and Building Value Estimation Consultancy Services;
c. Project Management Services Related to Building Construction;
d. Project Management Services Related to Construction of Transportation Civil Engineering Works;
e. Project Management Services Related to Construction of Water Civil Engineering Works;
f. Project Management Services Related to Construction of Other Civil Engineering Works;
g. Project Management Services Related to Construction Work Construction Processes and Indsutrial Facilities;
h. Project Management Services Related to Construction of Traffic Control System Works;
i. Integrated Engineering Services
With the classifications, consisting of:
‘Buildings’ classification consists of further sub-classifications, which are described below:
a. Single and Couple Residential Establishment;
b. Multi Or Multiple Occupancy Establishment;
c. Warehouse and Industrial Establishment;
d. Commercial Establishment;
e. Public Entertainment Establishment;
f. Hotel, Restaurant and Other Similiar Establishment;
g. Educational Establishment;
h. Medical Establishment;
i. Other Establishments.
‘Civil Buildings’ classification consists of further sub-classifications, which are described below:
a. Waterways, Ports, Dams and Other Water Resources Infrastructure;
b.Drinking Water and Waste Water Treatment Plants and Waste Processing Buildings;
c. Highways (Except Flyovers), Roads, Railways, and Airport Runways;
d. Bridges, Flyovers, Tunnels and Subways;
e. Long Distance Drinking Water Piping;
f. Long Distance Wastewater Piping;
g.Long Distance Oil And Gas Piping;
h. Local Drinking Water Piping;
i. Local Waste Water Piping;
j. Local Oil and Gas Pipelines;
k. Stadium Buildings for Outdoor Sports; and
i. Indoor Sports Facilities Buildings and Recreational Facilities.
‘Mechanical and Electrical Installation’ classification consists of further sub-classifications, which are described below:
a. Installation of Air Conditioning, Heating and Ventilation;
b. Installation of Water Pipes (Plumbing) in Buildings and Channels;
c. Installation of Gas Pipes in Buildings;
d. Insulation in Buildings;
e. Installation of Elevators and Walking Stairs;
f. Mining And Manufacturing;
g. Thermal, Pressure, Oil, Gas, Geothermal Installations (Engineering Work);
h. Installation of Transport Equipment and Lifting Equipment;
i. Piping, Gas and Energy Installation (Engineering Work);
j. Installation of Production Facilities, Oil and Gas Storage (Engineering Works);
k. All Power Electrical Power Plant Installations;
l. Electric Power Plant Installation Maximum Power 10 MW;
m. Installation of New and Renewable Energy Power Plants;
n. Installation of High Voltage/Extra High Voltage Electric Power Transmission Networks;
o. Telecommunication and/or Telephone Transmission Network Installation;
p. Medium Voltage Electric Power Distribution Network Installation;
q. Low Voltage Electric Power Distribution Network Installation;
r. Telecommunication and/or Telephone Distribution Network Installation;
s. Control and Instrumentation System Installation;
t. Building and Factory Electrical Power Installations; and
u. Other Electrical Installations.
‘Other Implementation Services’ classification consists of further sub-classifications, which are described below:
a. Construction and demolition equipment rental services for buildings or other civil works with operators;
b. Prefabricated Construction Assembly and Installation Services for Building Construction;
c. Services for Assembling and Installing Prefabricated Construction for Road, Bridge and Railway Construction;
d. Assembling and Installation Services for Prefabricated Construction for the Construction of Water Resources Infrastructure, Irrigation, Piers, Harbors, Rivers, Beaches and Clean Water, Waste and Garbage Processing Buildings (Incinerator)
‘Integrated Construction Services Business’ classification consists of further sub-classifications, which are described below:
a. Integrated Services for Transportation Infrastructure;
b. Integrated Services for Construction of Water Resources Infrastructure and Facilities, Water Distribution and Sanitation Works;
c. Integrated Services for Manufacturing Construction;
d. Integrated Services for Oil and Gas Facility Construction; and
e. Integrated Services for Building Construction.
Under Article 9 of the LPJK regulation, Foreign Construction Service Business is classified under the ‘Big Business’ category. Where two sub-classes exist: B2 (Big 2) set for ‘Construction Implementation Services Business and Integrated Construction Services Business’ and B (Big) for ‘Construction Planning and Supervision Services Business’. The sub-classifications of these companies are then determined based on the company’s net worth, experience, and work force.
The B2 classification which is determined for the ‘Construction Implementation Services Business and Integrated Construction Services Business’ category has several requirements. These are:
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Construction Implementation Services Business |
Integrated Construction Services Business |
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The B classification which is determined for the ‘Construction Planning and Supervision Services Business’ category has several requirements. These are:
Additionally, Permanent Experts can concur 2 sub-classifications (max.) as stated under the provisions of ‘Classifications/Sub-classifications of Work Skills Certificate (SKA) For Permanent Experts’ as regulated in Annex 2A.
Note:
For further informations regarding the requirements and procedures of BUJKA, you can contact us at Selaras Law Firm (SLF) using the contacts provided below.
Email: contact@selaraslawfirm.com
Phone: +6281558523132 (English, Arabic, Turkish), +6281510118552 (Indonesian)
Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
]]>Or so as the saying goes. It is a well-known secret when it comes to building PT PMA (Foreign Investment Company) in Indonesia, foreign investors might find themselves facing a tumultuous and taxing journey. From significant paid-up capital to having to gain certain business licensing, the journey to establishing a PT PMA could prove to be arduous.
Yet, what if, foreign investors can instead take a more steady approach for their establishment of PT PMA
A representative office is an establishment that is led by appointed representatives (whether foreign nationals or Indonesians) of a foreign company to manage said foreign company’s interests or its affiliates, and to prepare for its enactment and development to become a Foreign Investment Company (PT PMA) here in Indonesia. Nevertheless, representative offices have certain limitations. For example, a representative office is not capable of conducting commercial activities. This means, it cannot conduct profit-generating activities, issuing invoices, and entering into contracts. Foreign investors, however, can own 100% of this business entity and don’t have to contribute the same paid-up capital required by PT PMA.
According to BKPM Regulation 4/2021 on Guidelines and Procedures For The Supervision Of Risk-Based Business Licensing (“BKPM Regulation 4/2021”), there are four criterias of representative offices:
Additional Notes
Selaras is a Market Entry and Investment Consulting Firm. We provide strategic consulting for your investments and provide various services to companies, investors and individuals doing business in Indonesia. From remote hiring to setting up local operations, we can help.
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