Indonesia Construction Industry 2025

Construction & Infrastructure Industry in Indonesia

Indonesia's construction sector is experiencing unprecedented growth with USD 412 billion in infrastructure projects, contributing 11% to national GDP. Government-backed National Strategic Projects (PSN) create massive opportunities for foreign and local investors.

USD 412B

Total Projects Value

11%

GDP Contribution

USD 20B

Annual FDI

7.2%

Annual Growth Rate

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Why Invest in Indonesia's Construction Industry?

Indonesia offers unparalleled opportunities in construction and infrastructure development, backed by strong government initiatives and growing urbanization.

Rapid Economic Growth

Indonesia is the largest economy in Southeast Asia with consistent 5%+ GDP growth, driving massive infrastructure needs and construction demand.

Government Support

National Strategic Projects (PSN) program with USD 412 billion investment creates guaranteed opportunities for construction companies.

Growing Population

With 280 million people and rapid urbanization, demand for residential, commercial, and infrastructure construction continues to surge.

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Indonesia Construction Market Overview

The Indonesian construction industry is one of the fastest-growing sectors in Asia, driven by urbanization, infrastructure development, and government mega-projects.

Market Size: USD 91 Billion (2024)

Expected to reach USD 127 billion by 2029

Growth Rate: 7.2% CAGR

Fastest growing construction market in ASEAN

FDI: USD 20 Billion Annually

Construction sector is 2nd largest FDI recipient

Top 15 Global Market

Construction & Infrastructure Investment Sectors

Diverse opportunities across multiple construction segments

Transportation Infrastructure

USD 180B

Highways, toll roads, bridges, railways, airports, and seaports development across the archipelago

Key Projects:

Trans-Sumatra Toll Road
Jakarta-Bandung High-Speed Rail
New Capital City (IKN) Infrastructure

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Commercial Development

USD 45B

Office buildings, shopping malls, hotels, mixed-use developments in major cities

Key Projects:

Jakarta CBD Expansion
Bali Tourism Infrastructure
Industrial Parks

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Residential Construction

USD 38B

Housing projects, apartments, condominiums meeting growing urban population demands

Key Projects:

Affordable Housing Program
Luxury Residential Towers
Suburban Townships

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Energy & Utilities

USD 72B

Power plants, renewable energy facilities, transmission infrastructure, water treatment plants

Key Projects:

35,000 MW Power Program
Renewable Energy Projects
Smart Grid Development

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Healthcare Facilities

USD 12B

Hospitals, clinics, medical centers supporting expanding healthcare system

Key Projects:

Regional Hospital Network
Specialist Medical Centers
Healthcare Technology Centers

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Education Infrastructure

USD 8B

Schools, universities, vocational training centers, and research facilities

Key Projects:

University Campuses
Vocational Centers
Research & Innovation Hubs

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Government Infrastructure Programs

Major government initiatives driving construction growth

National Strategic Projects (PSN)

USD 412 Billion Investment

A comprehensive infrastructure development program encompassing transportation, energy, tourism, and urban development projects nationwide.

Key Highlights:

223 Strategic Projects across Indonesia
Guaranteed Government Backing for major projects
Fast-track Licensing for PSN contractors
Priority Funding from state banks

IKN Nusantara (New Capital City)

USD 33 Billion Megaproject

Construction of Indonesia's new capital city in East Kalimantan, creating unprecedented opportunities for construction companies and investors.

Development Phases:

Phase 1 (2022-2024): Core government buildings
Phase 2 (2025-2029): Infrastructure & utilities expansion
Phase 3 (2030-2045): Full city development
Target: 1.5 million residents by 2045

Foreign Investment Welcome!

The Indonesian government actively encourages foreign investment in construction and infrastructure. Start your construction business to participate in these mega-projects.

Construction Business Licensing in Indonesia

Essential certifications and licenses for construction companies

SBU (Sertifikat Badan Usaha)

Mandatory

Business Entity Certificate for construction companies - mandatory for participating in government tenders and construction projects.

SBU Classifications:

Bangunan Gedung (BG) - Building Construction
Bangunan Sipil (BS) - Civil Engineering
Instalasi (I) - Installation Works
Konstruksi Khusus (K) - Special Construction

Processing Time: 2-4 weeks Validity: 3 years (renewable) Investment: From IDR 15 million

Apply for SBU Certificate

SKK (Sertifikat Kompetensi Kerja)

Mandatory

Work Competency Certificate for construction professionals - required for technical personnel in construction companies.

Professional Categories:

SKA - Certificate of Expertise (Architects, Engineers)
SKT - Certificate of Skills (Technicians, Supervisors)
BNSP Certification - National Professional Certification

Processing Time: 1-2 months Validity: 3-5 years (depends on level) Investment: From IDR 3 million

Get SKK Certification

Company Registration

PT/PT PMA setup for construction business

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NIB & Business License

Online Single Submission (OSS) registration

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ISO Certification

ISO 9001, ISO 14001, ISO 45001 for construction

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SBU Classifications for Construction Companies

Choose the operating model that matches your project expertise. Each classification links to dedicated guidance on requirements and documentation.

Architecture

Concept design, permit drawings, and architectural leadership for new developments and revitalisations.

Sample Scopes:

Concept Design Permit Drawings BIM Coordination Design Supervision

Explore Sub-classification /construction-category-architecture

Architecture, Landscape & Regional Planning

Master planning, landscape design, and spatial strategy for cities, industrial estates, and tourism zones.

Sample Scopes:

Urban Master Planning Landscape Architecture Transit-Oriented Design Tourism Clusters

Explore Sub-classification /construction-category-architecture-lansekap-and-planning-wilayah

Building Construction (BG)

End-to-end delivery of residential, commercial, industrial, and public facility projects.

Sample Scopes:

High-rise Residential Commercial Towers Industrial Facilities Hospital Projects

Explore Sub-classification /construction-category-building

Civil Works (BS)

Infrastructure construction for roads, bridges, ports, dams, irrigation, and strategic national assets.

Sample Scopes:

Roads & Bridges Port Infrastructure Flood Control Rail Systems

Explore Sub-classification /construction-category-civil-works

Construction Special

Specialised construction scopes including geotechnical, marine, demolition, and high-complexity builds.

Sample Scopes:

Geotechnical Works Underwater Construction Demolition Tunnelling

Explore Sub-classification /construction-category-construction-special

Scientific & Technical Consultancy

Expert advisory covering feasibility studies, technical audits, and specialised project management.

Sample Scopes:

Feasibility Studies Technical Audits Due Diligence Project Management Office

Explore Sub-classification /construction-category-consultancy-scientific-and-technical

Engineering

Multi-disciplinary engineering design and supervision for structural, mechanical, electrical, and utility systems.

Sample Scopes:

Structural Engineering Mechanical Systems Electrical Networks Utility Modelling

Explore Sub-classification /construction-category-engineering

Integrated Engineering

Integrated engineering delivery that unites design, procurement, and supervision across complex projects.

Sample Scopes:

Integrated Design-Build Value Engineering Systems Integration Commissioning Support

Explore Sub-classification /construction-category-engineering-terpadu

Installation

Mechanical, electrical, plumbing, IT, and specialised system installations for buildings and industrial facilities.

Sample Scopes:

HVAC Systems Electrical Fit-out Fire Safety ICT Infrastructure

Explore Sub-classification /construction-category-installation

Testing & Technical Analysis

Laboratory, field testing, and monitoring services to validate material and system performance.

Sample Scopes:

Material Testing Structural Monitoring Non-Destructive Testing Calibration Services

Explore Sub-classification /construction-category-pengujian-and-analisis-technical

Building Completion & Finishing

Finishing, fit-out, and commissioning workstreams to handover buildings ready for occupation.

Sample Scopes:

Interior Fit-out Façade Finishing Commissioning As-built Documentation

Explore Sub-classification /construction-category-penyelesaian-buildings

Site Preparation

Site clearing, earthworks, soil improvements, and enabling works ahead of major construction.

Sample Scopes:

Land Clearing Earthworks Soil Stabilisation Temporary Facilities

Explore Sub-classification /construction-category-preparation

Integrated Building Construction

Design-and-build delivery for building projects where a single licence covers planning, procurement, and construction.

Sample Scopes:

Design-Build Residential Commercial Complexes Hospitality Projects Educational Facilities

Explore Sub-classification /construction-category-work-construction-integrated-buildings-buildings

Integrated Civil & Building Construction

Large-scale EPC or turnkey projects that merge civil works with structural and architectural delivery.

Sample Scopes:

EPC Infrastructure Industrial Parks Transit Hubs Smart City Developments

Explore Sub-classification /construction-category-work-construction-integrated-construction-buildings-civil

View SBU Certification Guide

How to Start a Construction Business in Indonesia

Step-by-step guide for foreign investors

Market Research & Planning

Identify your construction niche, analyze competition, and develop a comprehensive business plan for the Indonesian market.

2-4 Weeks Details

Company Registration

Establish PT PMA (Foreign Investment Company) with appropriate share structure and capital according to construction business requirements.

3-4 Weeks Details

Business Licensing (NIB)

Obtain NIB through OSS system with construction KBLI codes and secure necessary operational permits.

1-2 Weeks Details

SBU Certification

Apply for SBU (Business Entity Certificate) in your chosen classification to qualify for government tenders.

2-4 Weeks Details

Hire Certified Personnel

Recruit qualified staff with SKK certifications or sponsor existing team members for SKK certification.

1-3 Months Details

Bid for Projects

Start bidding for government and private construction projects. Access tender information through official channels.

Ongoing Details

Need Professional Assistance?

Our experienced team can help you navigate the entire process, from company registration to SBU certification and beyond.

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Top Construction Investment Opportunities 2025

High-potential areas for foreign investors

Regional Infrastructure

USD 120B Opportunity

Development of infrastructure in tier 2 and tier 3 cities, connecting remote areas and boosting economic growth.

Provincial road networks
Water & sanitation systems
Rural electrification projects

ROI: 15-20% annually

Smart Cities Development

USD 25B Opportunity

Integration of technology in urban development, creating sustainable and efficient cities across Indonesia.

IoT infrastructure
EV charging networks
Smart building systems

ROI: 18-25% annually

Green Construction

USD 18B Opportunity

Sustainable and environmentally-friendly construction projects aligned with Indonesia's carbon neutrality goals.

Solar-powered buildings
Rainwater harvesting systems
Green building materials

ROI: 20-28% annually + Tax incentives

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Construction Business Categories (KBLI Codes)

Official business classification codes for construction industry

Business Classifications

KBLI Categories for Construction

Explore Indonesian Standard Industrial Classification (KBLI) business categories relevant to the construction sector. View all categories

Showing 12 of 32 categories for construction

View All 32 Categories

Need Help Choosing the Right KBLI Code?

Selecting the correct KBLI code is crucial for your NIB registration and business licensing. Our experts can help you identify the most appropriate classification for your business activities.

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Need help selecting the right KBLI code for your construction business?

Browse All KBLI Codes Get Expert Advice

Frequently Asked Questions

Common questions about construction business in Indonesia

Yes, since the implementation of Omnibus Law (Law No. 11/2020), foreign investors can own 100% of construction companies in most sub-sectors. However, some specialized areas may still have ownership restrictions. We recommend consulting with our team to determine the specific requirements for your construction business category.

For PT PMA (foreign investment company) in construction sector, the minimum paid-up capital is IDR 10 billion (approximately USD 650,000). However, this may vary depending on the construction classification and scale of operations. The total investment value (including capital and operational expenses) should align with your business plan.

The SBU (Sertifikat Badan Usaha) certification process typically takes 2-4 weeks after company registration is complete. This timeline assumes all required documents are prepared correctly. Our team can help expedite the process and ensure your application meets all LPJK (Construction Services Development Board) requirements.

Yes, SBU certification is mandatory for construction companies that want to participate in government tenders and most private sector projects exceeding certain value thresholds. Without SBU, your company cannot legally bid for construction projects in Indonesia. Apply for SBU here.

Construction companies, especially those involved in government infrastructure projects or located in Special Economic Zones (SEZ), may benefit from various tax incentives including corporate income tax reduction, import duty exemptions, and VAT exemptions. Green construction projects may also qualify for additional incentives. Learn more about tax incentives.

Yes, foreign workers can be employed in construction companies, but they must obtain proper work permits (KITAS and IMTA). Certain positions are restricted to Indonesian nationals. Additionally, companies are required to have development plans for local workforce. We provide comprehensive visa and immigration services for foreign workers.

SKK (Sertifikat Kompetensi Kerja) is the general term for work competency certificates. SKA (Sertifikat Keahlian) is for professionals like engineers and architects, while SKT (Sertifikat Keterampilan) is for skilled workers and technicians. Both are required for construction companies to obtain SBU certification.

Government tenders are published on LPSE (Electronic Procurement Service) portal. Your company must be registered on LPSE and have valid SBU certification to participate. We can help you navigate the tender process and prepare competitive bids. View current tenders.

To participate in IKN projects, companies must have: 1) Valid SBU with appropriate grade, 2) Proven track record in similar projects, 3) Financial capacity meeting project requirements, 4) Environmental compliance certifications. The IKN Authority provides special provisions for both local and foreign investors.

Key compliance requirements include: maintaining valid SBU and SKK certifications, adhering to Indonesian National Standards (SNI), obtaining proper building permits, implementing occupational health and safety measures (K3), and regular reporting to relevant authorities. Our compliance consulting service helps you navigate all regulatory requirements.

Ready to Enter Indonesia's Construction Market?

Let our experienced team guide you through company registration, SBU certification, and business setup. With over 10 years of experience serving international clients, we ensure your construction business launch is smooth and compliant.

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