Welcome to the dynamic world of infrastructure development in Bali!
As Indonesia’s premier tourist destination, Bali is not only about serene beaches and vibrant culture but also a burgeoning hub for civil engineering and construction.
This blog explores the substantial investment opportunity in setting up a multinational company for road construction under the KBLI Code 42101.
The scope includes the development, maintenance, and reconstruction of roads—ranging from major highways to smaller paths—as well as toll roads and airport runways.
It covers essential activities such as the construction and maintenance of retaining walls and container storage yards.
Dive into how Bali is paving the way for substantial infrastructure advancements and why this creates a golden opportunity for investors and companies worldwide.
Overview
KBLI Code 42101 covers businesses engaged in the construction, maintenance, and reconstruction of road buildings (highways, medium, and small roads), freeways roads, airfield roads (runways, taxiways, and parking areas), and container storage yards.
It also includes supporting activities such as the construction and maintenance of road retaining walls and fences, but excludes elevated roads.
Legal Basis
The activities under KBLI Code 42101 are regulated by the Regulation of the Minister of Public Works and Housing of the Republic of Indonesia Number 6 of 2021, providing the legal framework for these construction activities.
Type of License
According to BKPM Regulation No. 4 of 2021, Article 12, exemptions from minimum investment requirements apply to foreign direct investments (FDIs) exceeding IDR 10 billion (excluding land and building costs) per five-digit KBLI code per project location.
This includes construction services, with specific conditions outlined for different types of construction service activities.
Coverage of Service
This code encompasses a broad range of construction services including road building, maintenance, demolition, and reconstruction, along with the construction of toll roads and airport runways, plus related supporting activities like maintenance and improvement of road and bridge constructions.
Business Scale, Land Area, and Risk Level
The business under KBLI Code 42101 is categorized as a large-scale operation with a high to medium risk level.
The specific area for land usage isn’t regulated, allowing flexibility in choosing the project location based on strategic and operational needs.
Authorities Granting Licenses
Licenses for businesses operating under KBLI Code 42101 are granted by the Ministry or Head of the Agency.
This centralizes the approval process at a higher level of government authority, ensuring that only qualified businesses can operate in this sector.
Requirements and Obligations for Business Licensing
Businesses must meet specific standards to obtain a license, such as demonstrating the capability of the construction service company through a Standard Certificate.
They are also obliged to report annual business activities and adhere to various standards including quality of materials and equipment, occupational safety and health, construction procedures, and environmental management.
These regulations ensure that operations not only comply with legal requirements but also uphold safety, sustainability, and quality in construction practices.
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Frequently Asked Questions
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What types of road construction projects are covered under KBLI Code 42101?
KBLI Code 42101 covers the construction, maintenance, and reconstruction of various types of roads, including highways, medium and small roads, freeways, toll roads, and airfield roads such as runways, taxiways, and parking areas.
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What strategic advantages does Bali offer for multinational road construction companies?
Bali offers a dynamic market due to its status as a top tourist destination, necessitating robust infrastructure development. The region provides significant opportunities for growth in civil engineering and construction sectors.
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Can foreign investors fully own a road construction company in Bali under KBLI Code 42101?
Foreign investors can own up to 67% of a non-ASEAN based company and up to 70% if it's ASEAN-based, subject to regulations aimed at promoting local participation and expertise in the industry.
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What opportunities does the expansion of toll roads and airport runways in Bali present to investors?
Expanding toll roads and airport runways opens up significant opportunities for enhancing transportation infrastructure, crucial for supporting Bali’s growing tourism and commercial activities, thus offering lucrative returns for investors.
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Are there any exemptions from minimum investment requirements for foreign direct investments in this sector?
Yes, according to BKPM Regulation No. 4 of 2021, Article 12, exemptions from minimum investment requirements apply to foreign direct investments exceeding IDR 10 billion (excluding land and building costs) per five-digit KBLI code per project location.
Contact Us for Setting Up a Multinational Company for Road Construction in Bali.
