construction companies in indonesia

Business Update: Digital Certificates for Construction Sector in Indonesia

  • InCorp Editorial Team
  • 15 May 2019
  • 3 reading time

Construction market in Indonesia is one of the most important sectors that support the economic growth in Indonesia. In real terms, the construction companies in Indonesia made the economy grow by 5.01% in 2017 and the Gross Domestic Product (GDP) by 10.38% in the same year. In 2018, this sector was worth IDR 451,337 billion (USD 32.2 billion).

To streamline the relevant business process of the ever-growing construction sector and encourage further foreign investments, Circular No. 06/SE/M/2019 (or Circular 6/2019) was recently issued by the Minister of Public Housing and Public Works of Indonesia.

This new regulation was enacted with regards to Certificates of Business Entity, Certificates of Expertise and Certificates of Work skills in Electronic Form.

This article provides the details of this business update pertaining to the digital certificates for construction sector in Indonesia. Note that all certificates must have been converted into digital certificates by 30 September 2019.

Updates via Circular 6/2019 in Indonesia

This regulation includes the administration and issuance of the following digital certificates:

  • Certificates of Business Entity (Sertifikat Badan Usaha) for construction service business entities
  • Certificates of Work Skills (Sertifikat Keterampilan Kerja) for construction manpower (qualified technicians and analysts or skilled operators)
  • Certificates of Expertise (Sertifikat Keahlian) for construction manpower (qualified experts)

 

According to the framework laid out in Circular 6/2019, the government of Indonesia will issue the digital certificates via the Indonesian Construction Information System (Sistem Informasi Konstruksi Indonesia).

This framework also addresses the following items:

  • All certificates with regards to construction sector are issued and delivered in electronic form, also referred to as digital certificates
  • Certificate conversion
  • Digital certificates requirements for issuance

Digital Certificates Issuance and Delivery

In general, the procedure of issuance and delivery of digital certificates for construction sector is as follows:

  • Applicant must submit an application along with supporting documents electronically via the Construction Service Professional Association or Construction Service Business Entity Association.
  • Upon the receipt of the application, the Construction Service Professional Association or the Construction Service Business Entity Association will then verify the dossier, whether it is complete or not.
  • When the application and documents are validated as complete, they will be submitted to the Construction Service Development Agency for further check and inspection.
  • Once the inspection is done, the Construction Service Development Agency will forward the application for Certificates of Business Entity or Certificates of Construction Manpower.
  • Personnel will be assigned to assess the application with results detailing the classification and qualification recommendations of the construction business entity or manpower.
  • If approved, the agency will issue and deliver a digital certificate.

Requirements for Digital Certificates

Applicants for digital certificates for construction service sector must meet the following requirements:

For construction business entity

  • Fill out the application with all necessary business entity details
  • Submit scanned copies of applicant’s Taxpayer Identification Number (NPWP), identity card, person-in-charge statement letter, and email address

For construction manpower

  • Fill out the application with all necessary personal details
  • Submit scanned copies of applicant’s Taxpayer Identification Number (NPWP), identity card, photo taken during the registration, email address and mobile number

How Cekindo Can Help

Construction companies in Indonesia are recommended to get in touch with us to know any latest updates related to doing business in Indonesia. We are also able to provide market insights to those who are interested in entering the Indonesian market.

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Get in touch with us.

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Frequent Asked Questions

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.