May

11

Establishing a Power Station Operation and Maintenance (“O&M”) Service Business in Indonesia

To conduct O&M Service for Power Station business, the company should obtain an Electric Power Supporting Services Business License (Izin Usaha Jasa Penunjang Tenaga Listrik – IUJPTL). The requirement by law in Indonesia to get the IUJPTL is regulated under Article 31 paragraph 1 letter (d) and (e) of Government Regulation in Indonesia Number 25 of 2021 regarding the Implementation of Energy and Mineral Resources (“PP 25/2021”).

According to the PP 25/2021, a state-owned enterprise, regional-owned enterprises, private enterprises, public service agencies, and cooperatives may engage in the electric power support services business upon obtaining :

  1. (i) an Electric Power Support Service business license; and
  2. (ii) a Business Entity Certificate for the electric power support services business.

Private enterprises that provide electric power support services can be in the form of:

  1. a legal entity established under the prevailing laws;
  2. a non-legal entity that has been registered with the MOLHR; or
  3. a foreign representative office established by a foreign entity or foreign individual that provides electric power support services.

The electric power support services business consists of:

  1. consultancy in the field of electric power installation;
  2. construction and installation work for an electric power installation;
  3. inspection and testing of an electric power installation;
  4. operation of the electric power installation;
  5. maintenance of electric power installation;
  6. research and development;
  7. education and training;
  8. electric power utility and equipment testing laboratories;
  9. electric power user and equipment certification;
  10. electric power engineering personnel competency certification;
  11. electric power support service business entity certification; and
  12. other service businesses directly related to the provision of electric power.

General requirements that apply to Foreign Representative Offices for electric power support service businesses in Indonesia

A foreign representative office can only obtain a business license for an electric power support services business in the following areas:

  1. consultancy in the field of Electric Power Installations;
  2. the construction and installation of Electric Power Installations; and
  3. the maintenance of Electric Power Installations.

GR 25/2021 restricts foreign representative offices to working on high-cost electric power support services that satisfy the following requirements:

  1. The construction and installation work for an electric power installation must have a value of at least IDR 100,000,000,000.00; and
  2. Any consultancy work in electric power installation or the maintenance of an electric power installation must have a value of at least IDR 10,000,000,000.00.
To do so, a foreign representative office must, among other things, establish a joint operation with a domestic electric power support services business entity that satisfies the following requirements:
  1. It is a limited liability company;
  2. One hundred per cent of its shares are held by individual Indonesian citizens, the Republic of Indonesia, regional governments, private companies, state-owned 2. companies, region-owned companies, or cooperatives;
  3. It must have a business entity certificate with large-scale business qualifications; and
  4. It must have a license to provide electric power support services.

How Schinder can Help

Schinder Law Firm is a leading corporate law firm in Indonesia, practicing Indonesian Company Law and Indonesian Investment Law. Our team of corporate lawyers in Indonesia and investment lawyers has forged a reputation for assisting various clients across the globe. As Indonesian business lawyers, we have extensive experience providing services in company registration, obtaining a mandatory business license and providing legal consultancy services. Following the O&M Service Business for Power Station, we have been entrusted by a dozen multinational companies to obtain all the mandatory licenses and have been appointed as a permanent legal consultant to help them deal with daily legal matters.

Author: Budhi Satya Makmur

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