177x Filetype PDF File size 0.94 MB Source: lawghp.com
MAJOR CHANGES IN CONSTRUCTION SECTOR UNDER OMNIBUS LAW AND ITS IMPLEMENTING REGULATIONS In November 2020, the Government of Republic of Indonesian has enacted Law No. 11 of 2020 on Job Creation (“Omnibus Law”). The Omnibus Law amended previous laws and regulations with the main purpose of the Omnibus Law is essentially to streamline the licensing requirements and ultimately attract more investment. The further implement the Omnibus Law, the GOI has issued series of regulations in the form of Governement Regulations, Presidential Regulations, and Ministry Regulations (“Implementing Regulations”). Omnibus Law and Implementing Regulations introduce several changes to the previous laws and regulations in the field of construction. We set out below a summary of the several major changes in the construction sector introduced under the Omnibus Law and the Implementing Regulations; No. Issues Previous laws and regulations Omnibus Law & Implementing Regulations 1. Licensing Construction Limited Liability Company Construction Limited Liability Company Requirement A company is required to be registered at IUJK is no longer required for the provision the Online Single Submission system of construction service in Indonesia. mantained by Investment Coordinating Board (“OSS”) and obtain a Business The NIB will now serve as the business Identification Number (Nomor Induk license for the construction company Berusaha – “NIB”). engaging in construction services in Indonesia. In addition to the NIB, the company is required to obtain business license in the However, in addition to the NIB, form of an Indonesian Construction construction company will still be required Business Lisence (Izin Usaha Jasa to obtain certification in the form of SBU as Konstruksi - ‘IUJK”). The IUJK will only be the commercial license. in effect once the company has obtained a Business Entity Certificate (Sertifikat Badan For foreing investment company, the Usaha – “SBU”). shareholding requirements such as foreign shareholding limitation and minimum For foreign investment company, the local criteria of local and foreign shareholders and foreign shareholders are subject to are still applicable. certain requirements such as foreign shareholding limitation and minimum criteria of local and foreign shareholders. World Trade Center 3, level 27 Jl.Jend.Sudirman Kav.29-31,Jakarta Indonesia 12920 No. Issues Previous laws and regulations Omnibus Law & Implementing Regulations Licensing Foreign Construction Representative Foreign Construction Representative Requirement Office Office A foreign entity can engage in construction Like a construction company, BUJKA will be service in Indonesia by forming a Foreign required to obtain NIB as its business Construction Representative Office (Badan license and obtain certification in the form Usaha Jasa Konstruksi Asing – “BUJKA”). of an SBU as its commercial license. Registration of a BUJKA is done through The requirement for BUJKA to form a joint OSS system. operation as regulated under the previous laws and regulations is still applicable. Once the BUJKA is registered at the OSS system, the BUJKA is required to apply for NIB. In addition to the NIB, the BUJKA is required to obtain business license in the form of IUJK. The IUJK will only be in effect once the BUJKA has obtained the SBU. In engaging construction service in Indonesia, BUJKA is required to form a joint operation with a qualified local construction company. 2. Requirement The SBU is classified into small, medium Same as regulated under the previous laws for SBU and large scale which will be determined and regulations, under the Omnibus Law based on the following: and the Implementing Regulations, SBU are still classified in small, medium and a. net asset requirements; large scale. However, the basis for b. experience requirements; and determining the scale of the SBU is c. engineers/manpower requirements. different compared to the previous laws and regulations. Detailed requirements was provided under Construction Services Development Under Omnibus Law and its Implementing Agency (Lembaga Pengembangan Jasa Regulations, the scale of the SBU will be Konstruksi – “LPJK”) regulations. determined based on the following: a. annual sales; b. financial ability; c. availability of construction experts; and d. the ability to provide construction equipment. To date, the LPJK regulations on the detailed required for SBUs has not been issued. World Trade Center 3, level 27 Jl.Jend.Sudirman Kav.29-31,Jakarta Indonesia 12920 No. Issues Previous laws and regulations Omnibus Law & Implementing Regulations 3. Authority on The LPJK has the authority to issue SBU. The SBU is now to be issued by a the Issuance Certification Agency (Lembaga Sertifikasi of SBU Badan Usaha – “LSBU”). LSBU must obtaina certification from LPJK in order it to be able to certifiy and issue SBUs. Note LPJK is currently still in the process of accrediting LSBU. Therefore, during the transition period until LSBU has been accredited by LPJK, SBUs are still isssued by LPJK. 4. Authority All construction activity fall under the Construction activity in the field of electricity on the authority of Ministry of Public Works and is now under the authority of Ministry of issuance of Housing (“MPWH”) and is required to Energy and Mineral Resources (“MEMR”) certifications obtain IUJK and SBU. and is no longer under the authority of for MPWH. construction Consequently, the licenses required to activity in engage in the construction activity in the the field of field of electricity will be subject to MEMR’s electricty regulation. The business licenses required to engage in construction activity in the field of electricity are NIB and SBU issued by the certification agency accredited by MEMR (“Electricity SBU”). Further, under the Omnibus Law and Implementing Regulation, foreign construction entity who intends to engage in the construction activity in the field of electricity by forming a Foreign Supporting Electricity Service Provider Representative Office (Badan Usaha Jasa Penunjang Usaha Tenaga Listrik Asing – “BUJPTLA”). BUJPTLA is a new type of representative office introduced under the Omnibus Law and in general is similar to BUJKA and also subject to similar requirements of BUJKA (ie requirement to form a joint operation etc). The main difference is that BUJPTLA is under the authority of MEMR and is required to obtain Electricy SBU. World Trade Center 3, level 27 Jl.Jend.Sudirman Kav.29-31,Jakarta Indonesia 12920 Lawyers in charge Dirgantara Adi Nugroho Partner Adi is one of the newest Partner at Guido Hidayanto & Partners specializing in infrastructure and construction projects. Prior to joining Guido Hidayanto & Partners, he worked for top tier firm in Indonesia as a senior associate. He has acted for both Indonesian and foreign clients in a variety of projects and commercial transactions His experience includes representing foreign sponsors in the development of ultra super critical electric power plants in Indonesia including the preparation and negotitations of the project documents (for example EPC and O&M contracts, coal supply agreements). Adi was also extensively involved in various EPC projects for construction of commercial buildings, factories and smelters. E-Mail dirgantara.adi@lawghp.com Michelle Viandy Huang Associate E-Mail michelle.huang@lawghp.com World Trade Center 3, level 27 Jl.Jend.Sudirman Kav.29-31,Jakarta Indonesia 12920
no reviews yet
Please Login to review.