Basic Knowledge of Representative Office vs PT PMA for Foreign Construction Companies in Indonesia

Indonesia’s construction sector continues to be one of the most attractive markets in Southeast Asia, driven by government infrastructure projects, urban development, and private investment. Foreign construction companies, from engineering consultancies to large contractors, see Indonesia as a key market for expansion.

Yet, one of the first and most important decisions is choosing the right business structure. Should a foreign contractor establish a PT PMA (foreign-owned limited liability company) or operate through a Representative Office under the BUJKA license?

This article compares the two options, highlighting differences in legal standing, capital requirements, scope of work, and compliance obligations, including helping foreign construction companies make informed decisions.

PT PMA for Construction Business

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the standard legal entity for foreign-owned companies in Indonesia.

Key Features of PT PMA

• Ownership: Allows foreign shareholders, subject to sectoral restrictions in the Positive Investment List.
• Capital Requirement: Requires a minimum investment plan of IDR 10 billion (~USD 750,000), with 10billion paid up capital gradually to be injected.
• Scope of Work: Can operate independently across multiple construction services, depending on KBLI classification.
• Compliance: Subject to Indonesian corporate law, tax obligations, and labor regulations.

PT PMA is Suitable For

• Investors with long-term plans.
• Companies seeking full control of operations.
• Firms that want to diversify beyond construction (e.g., property development, design services).

Representative Office for Construction Business (BUJKA)

For many contractors, setting up a PT PMA can be financially demanding. An alternative is to establish a Representative Office for Foreign Construction Services and obtain a construction business license or BUJKA (Badan Usaha Jasa Konstruksi Asing).

Key Features of Representative Office

• Nature: A BUJKA is a representative office, not a full company. It represents the foreign parent firm.
• Legal Basis: Governed by Indonesia’s Construction Services Law and the OSS-RBA risk-based licensing system under Government Regulation No. 28/2025.
• Risk Classification: BUJKA falls under medium-high risk KBLI classification, requiring a Business Identification Number (NIB) plus a Standard Certificate before operating.
• Scope of Work: Restricted to large-scale, complex, high-value projects and must operate through a Joint Operation (JO) with a licensed national construction company (BUJKN).

Representative Office is Suitable For

• Contractors focusing on mega-projects.
• Companies want market entry without the high capital requirement of PT PMA.
• Firms are testing the Indonesian market before committing to full incorporation.

Key Differences Between PT PMA and Representative Office with BUJKA

This comparison shows that PT PMA offers independence and flexibility, while BUJKA provides a lower-barrier entry point but with restrictions.

Establish PT PMA (foreign construction company) if:

• You plan a long-term, multi-sector presence in Indonesia.
• You want full control of operations, staffing, and revenue.
• You have sufficient capital to meet the IDR 10 billion requirement.

Establish a Representative Office with BUJKA if:

• You aim to handle large, complex projects without heavy capital investment.
• You want to test the market before committing to PT PMA.
• You are willing to collaborate with local partners in joint operations.

Hybrid Approach

Some contractors begin with BUJKA to access high-value projects and build local networks, then transition to a PT PMA for long-term operations. This staged approach reduces risk and financial burden.

Best Practices for Decision-Making

The choice of company format can be tailored to your needs in order to optimize resources and costs, while still being able to run a construction business that complies with Indonesian regulations. Here are some best practices that can be used as a reference before deciding to establish a PT PMA or Representative Office with a BUJKA.

• Conduct a Market Study – Assess project opportunities, capital requirements, and sectoral restrictions before choosing.
• Review KBLI Classifications – Ensure the chosen structure aligns with risk-based licensing under GR No. 28/2025.
• Build Strong Local Partnerships – Whether as BUJKN partners or joint venture allies, reliable local connections are critical.
• Seek Professional Guidance – Navigating licensing and compliance is complex. Experienced advisors help avoid costly mistakes.

👉 Business Hub Asia supports foreign construction firms in evaluating the right legal structure, securing BUJKA or PT PMA licenses, and ensuring compliance for successful market entry.

Deciding between a PT PMA and a BUJKA Representative Office is a pivotal step for foreign construction companies in Indonesia. PT PMA offers independence and scalability but requires significant capital. BUJKA, on the other hand, provides an accessible pathway for large projects under a joint operation framework.

The choice depends on your investment goals, financial resources, and project pipeline. For many, BUJKA serves as a smart entry point, while PT PMA ensures long-term stability.

📞 Partner with Business Hub Asia to analyze your options and secure the right structure for your construction business in Indonesia. Contact us today for a free consultation.