The Indonesian Government, through the Ministry of Public Works, is currently intensifying its supervision of construction service business entities in Indonesia, particularly concerning the ownership of and compliance with Business Entity Certificates (Sertifikat Badan Usaha or “SBU”), Work Competency Certificates (Sertifikat Kompetensi Kerja or “SKK”), Business Identification Numbers (Nomor Induk Berusaha or “NIB”), Standard Certificates, and other construction-related licenses. This strengthened supervision forms part of the government’s broader efforts to improve governance within Indonesia’s construction services sector, ensuring that companies operate in a professional, compliant, and legally secure manner in accordance with prevailing Indonesian laws and regulations.
The increasing supervision by the Ministry of Public Works demonstrates the Indonesian Government’s commitment to strengthening compliance within the construction industry, particularly for Construction Service Business Entities (Badan Usaha Jasa Konstruksi or “BUJK”). In practice, the government is no longer focusing solely on administrative compliance, but is also examining whether the actual construction activities performed by a company align with its registered business classification, qualifications, and construction licenses. As a result, construction companies operating in Indonesia are now expected to maintain proper licensing compliance at all times in order to avoid legal and operational risks.
The Government has also introduced significant changes to Indonesia’s business licensing framework through Government Regulation No. 28 of 2025, which replaces Government Regulation No. 5 of 2021 regarding Risk-Based Business Licensing. This regulatory reform aims to improve supervision, legal certainty, investment climate, and the implementation of risk-based licensing systems across various sectors, including the construction services industry. Following the implementation of Government Regulation No. 28 of 2025, the Ministry of Public Works has intensified its educational initiatives and compliance monitoring efforts to ensure that construction business entities fully understand their obligations under Indonesian construction laws and licensing regulations.
For construction companies in Indonesia, compliance extends beyond merely obtaining an SBU. Business entities are also required to comply with all aspects of construction business licensing requirements, including maintaining valid NIBs, Standard Certificates, SKKs for construction experts and skilled workers, as well as ensuring that all operational activities remain consistent with the classifications and qualifications stated in their SBU. The government has emphasized the importance of understanding the procedures relating to SBU qualification determination, SBU service transition mechanisms following the enactment of Government Regulation No. 28 of 2025, surveillance procedures for licensed business entities, and administrative sanctions that may be imposed on companies whose SBU no longer meets applicable regulatory criteria.
The SBU itself remains one of the most important legal documents for construction service companies in Indonesia because it serves as formal recognition of a company’s business classification and qualifications. Possessing a valid SBU is a fundamental requirement for participating in government tenders, private construction projects, procurement activities, and various infrastructure development projects throughout Indonesia. Due to the stricter supervision currently being implemented by the Ministry of Public Works, authorities are increasingly verifying whether a company’s actual business activities are aligned with the classification and sub-classification listed in its SBU. Construction companies operating outside the scope of their registered SBU classifications may face administrative sanctions, project restrictions, licensing suspension, or other legal consequences under Indonesian law.
In addition to SBU compliance, the Indonesian Government is also strengthening supervision over the use of certified construction workers and experts through the mandatory use of valid Work Competency Certificates (SKK). Construction companies are required to ensure that their experts, engineers, supervisors, and skilled workers possess appropriate certifications in accordance with applicable construction regulations. The government has also increased its monitoring of the validity and proper use of SKKs, including ensuring that listed personnel are actively involved in the company’s operations and are not improperly affiliated with multiple business entities simultaneously.
With increasingly strict supervision in Indonesia’s construction sector, the Ministry of Public Works has emphasized the importance for every construction company and BUJK to ensure that all business licenses and certifications remain active, valid, and compliant before conducting any construction activities. This includes ensuring the validity of the company’s NIB, Standard Certificate, SBU, and workforce competency certifications. Compliance with construction licensing regulations in Indonesia should no longer be viewed merely as an administrative requirement, but rather as a critical aspect of legal risk management, corporate governance, and long-term business sustainability.
Construction companies operating in Indonesia are therefore strongly encouraged to conduct regular legal compliance reviews and licensing audits to ensure that all aspects of their construction business operations remain fully compliant with Indonesian laws and regulations. Preventive legal measures are increasingly important in order to minimize risks relating to project tenders, licensing restrictions, administrative sanctions, contractual disputes, and potential disruptions to ongoing construction activities.
As a law firm experienced in Indonesian investment law, business licensing, foreign investment (PMA) matters, and construction sector regulations, Schinder Law Firm provides comprehensive legal assistance for construction companies and investors operating in Indonesia. Our services include SBU registration and compliance, construction licensing review, legal due diligence, OSS and NIB compliance, regulatory advisory services, and legal assistance relating to construction projects and infrastructure development in Indonesia. For further information regarding construction licensing compliance, SBU registration, or legal assistance for construction companies in Indonesia, please contact info@schinderlawfirm.com.
Author:
Dewi Susanti