Four things you should be aware of when hiring a contractor company
Hiring a contractor in Indonesia? Verify legal status, licensing, contract clarity, and risk allocation before starting any project.
Hiring a construction contractor in Bali requires careful preparation. Many disputes arise from inadequate due diligence or poorly drafted agreements. Here are four critical steps to protect your investment.
Verify the Company
Make sure you get copies of their company documents — company establishment deed, business license (SIUJK), and tax registration.
- Visit their office and verify it is a legitimate operation
- Inspect at least one of their ongoing or previous projects in person
- Do simple research on the internet about their company and directors
- Check if they are registered with the local construction services association
Sign a Proper Agreement
When I say proper, it means the agreement must include specific protective clauses for both parties:
- Detailed project timeline with milestones
- Payment scheme tied to construction progress
- Fines or consequences in case of default or delay
- Choice of law and dispute resolution mechanism
- Scope of work with referenced technical drawings
Never sign a vague agreement that leaves key terms undefined.
Payment Terms
Never agree to pay fifty percent upfront. An established construction company will gladly accept a twenty percent deposit and return the deposit value according to progress.
- Maximum 20% deposit at contract signing
- Subsequent payments tied to verified milestones
- Final payment (retention) held until defects liability period ends
- All payments documented with official receipts
Precise Technical Drawings
Complete your project with exact drawings and detailed specifications. This ensures you and your construction company are on the same page for project quality.
- Architectural drawings with dimensions
- Material specifications (brand, grade, quantity)
- MEP (mechanical, electrical, plumbing) plans
- Bill of quantities for cost verification
Consider hiring an independent third party: a lawyer to review agreement terms, and an architect or quantity surveyor to measure construction progress before you release further payments.