Welcome to our guide on setting up a PT PMA in Bali’s construction sector, specifically under KBLI Code 41011, which covers residential building construction.
This sector includes the development, maintenance, and reconstruction of residential properties such as houses, apartments, and condominiums.
It also encompasses activities carried out by real estate companies aiming to sell these properties, as well as extensive modification and renovation work.
In this blog, we’ll explore the vibrant construction industry in Bali and provide essential insights into the processes and requirements for establishing a PT PMA.
Whether you’re looking to navigate the regulations or understand the business scope within KBLI Code 41011, you’ll find the information you need to launch your construction business in Bali.
Overview
This section focuses on the scope of businesses under KBLI Code 41011, which includes the construction, maintenance, and/or rebuilding of residential buildings such as houses, temporary residences, apartments, and condominiums.
It also covers real estate companies involved in constructing residential buildings for sale, as well as renovation and modification activities.
Legal Basis
The legal framework for PT PMA in the construction sector is primarily governed by the Indonesian Minister of Public Works and Housing Regulation No. 6 of 2021.
This regulation provides guidelines on ownership structures, where non-ASEAN foreign companies can hold up to a 67% stake, and ASEAN-based companies up to 70%, as detailed in Government Regulation No. 5 of 2021 on Risk-Based Business Licensing.
Type of License
Businesses within this KBLI sector, other than those allocated for cooperatives and SMEs, can be operated by foreign investment construction service companies (BUJK), provided they meet specific capital structure requirements.
Coverage of Service
The services covered under this classification involve comprehensive construction activities including designing, building, maintaining, and demolishing residential buildings, as well as undertaking extensive renovations and reconstructions.
Business Scale, Land Area, and Risk Level
The businesses classified under this KBLI are considered large scale. The risk level is categorized as medium to high, though specific regulations on land area are not stipulated.
Authorities Granting Licenses
Licenses for operating in this sector can be issued by the Minister or the head of the relevant agency. The specific authority may vary based on the scope and scale of the business activities.
Requirements and Obligations for Business Licensing
Businesses must comply with several obligations including the Standards for Determining the Capability of Construction Service Companies.
They are required to maintain records of corporate experience, adhere to standards of quality for materials and equipment, ensure safety and health at work, and follow environmental management standards according to legislative requirements.
Social labor protection guidelines must also be upheld.
Frequently Asked Questions
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What are the key requirements for setting up a PT PMA in Indonesia’s construction industry?
The key requirements include having a minimum of two shareholders (foreign and local), a minimum capital investment, a clear business plan, and the necessary licenses and permits. It is also crucial to have a qualified team of professionals, including engineers and project managers, to oversee the construction projects.
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How does the KBLI code 41011 impact the establishment of a construction company in Bali?
The KBLI code 41011 specifically relates to the construction of buildings, which includes residential, commercial, and industrial properties. Companies operating under this code must adhere to the regulations and standards set by the Indonesian government for building construction, such as safety protocols, environmental impact assessments, and quality control measures.
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What are the advantages of setting up a foreign-owned construction company in Bali?
Bali’s thriving tourism industry and growing economy present significant opportunities for construction companies. The demand for high-quality infrastructure, resorts, and residential properties are consistently high. Additionally, the Indonesian government offers various incentives for foreign investors in the construction sector, such as tax breaks and streamlined licensing processes.
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How can a foreign-owned construction company navigate the regulations in Bali?
Partnering with local legal and business consultants who have experience in the construction industry is crucial. These experts can help the company understand and comply with the relevant regulations, obtain necessary licenses and permits, and navigate any challenges that may arise. It is also essential to stay informed about any changes in the regulatory landscape and adapt accordingly.
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What are the most important factors to consider when choosing a business location for a construction company in Bali?
The key factors include proximity to potential clients and projects, access to skilled labor, transportation infrastructure, and the availability of necessary resources and materials. It is also essential to consider the local zoning regulations and any restrictions on construction activities in specific areas.
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How can a foreign-owned construction company build a strong local network in Bali?
Building a strong local network involves establishing relationships with key stakeholders, such as local suppliers, contractors, and government officials. Participating in industry events, joining local business associations, and collaborating with established local companies can help build trust and credibility. It is also essential to engage with the local community and demonstrate a commitment to social responsibility.
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What are the most common challenges faced by foreign-owned construction companies in Bali?
Common challenges include navigating the complex regulatory environment, finding reliable local partners and suppliers, and adapting to the local business culture. Language barriers and cultural differences can also pose difficulties in communication and decision- making. Additionally, the construction industry in Bali can be competitive, requiring companies to differentiate themselves through quality, innovation, and customer service.
Contact us for assistance in establishing a PT PMA in Bali’s construction sector.
