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picture1_Construction Pdf 83832 | Ghp Major Changes Construction Sector Under Omnibus Law And Implementing Regulations


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File: Construction Pdf 83832 | Ghp Major Changes Construction Sector Under Omnibus Law And Implementing Regulations
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 ...

icon picture PDF Filetype PDF | Posted on 13 Sep 2022 | 3 years ago
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               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
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...Major changes in construction sector under omnibus law and its implementing regulations november the government of republic indonesian has enacted no on job creation amended previous laws with main purpose is essentially to streamline licensing requirements ultimately attract more investment further implement goi issued series form governement presidential ministry introduce several field we set out below a summary introduced issues limited liability company requirement required be registered at iujk longer for provision online single submission system service indonesia mantained by coordinating board oss obtain business nib will now serve as identification number nomor induk license berusaha engaging services addition however an still lisence izin usaha jasa certification sbu konstruksi only commercial effect once obtained entity certificate sertifikat badan foreing shareholding such foreign limitation minimum local criteria shareholders are subject applicable certain world trade cent...

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