What permits/licences and other documents do parties need before starting work, during work and after completion? Are there any penalties for non-compliance?

Construction

Belgium Small Flag Belgium

In principle, for all types of construction projects as well as for certain modifications to existing buildings a building permit (or notification) is required and starting work without such a permit (or notification) is subject to administrative and criminal sanctions in all of the 3 Belgian regions.

In case of significant impact on the environment, an environmental permit is also required.

Some commercial development projects also require a so-called socio-economical permit. Such a permit will be granted only if certain conditions (i.a. impact on local employment, land use, …) are met/respected.

Oman Small Flag Oman

The consents, permits and licences are project specific, but usually the following would be required, where relevant, for both temporary construction site and permanent project facilities:

Before

  • Site/plant approval from MECA, Ministry of Regional Municipalities and Water Resources ("MRMWR") or local municipality, Public Authority for Electricity and Water (“PAEW”) and MOH.
  • Preliminary environmental permits from MECA
  • NOC for construction of building/plant from the local municipality and MECA.
  • Excavation permits from the local municipality, MECA, MOH, and the Royal Oman Police (“ROP”).
  • Approval for temporary facilities (temporary construction site) from the local municipality and MECA.
  • ROP approval of site drawings.
  • Electrical line site clearance from MOH and regional electricity distribution company.
  • Water mains site clearance from MOH and PAEW.
  • Telephone site clearance from Omantel.
  • Gas crossing excavation permits from Oman Gas Company.
  • Approval from the Ministry of Heritage if the site is a heritage site or of archaeological significance.

During

  • Permits for the transportation of heavy plant and equipment and for the transportation of hazardous waste from ROP and Roads Department.
  • Consent to open up highways or other roads for crossing.
  • Permission for the installation of sign boards from the local municipality and MECA.
  • Waste disposal consents from the local municipality and MECA.

On completion

  • Municipality permits, such as certificate of completion.
  • Electricity connection approval from the relevant electricity distribution company.
  • A fire safety certificate from the Director-General of Civil Defence.
  • Water supply connection approval from the PAEW.

In case of non-compliance with the permit terms and conditions, the permit holder may be fined, and/or the permitted activity suspended, until the conditions are satisfied.

Denmark Small Flag Denmark

Permits are generally not required in order for a contractor to perform work, but for some work (e.g. electrical work and plumbing work) an authorization is required.

The Building Act regulates the circumstances under which the employer (or the turnkey-contractor) must apply for a building permit (to start work) and an occupancy permit (needed for occupation). Permits are not required for all construction work, but the work must be executed in accordance with the building regulations, even if permits are not required.

A building permit does not include a technical verification of the project, and although a building permit has been issued, non-compliance with the act or the building regulations may still result in the refusal of an occupancy permit.

Spain Small Flag Spain

The relevant construction license has to be granted by the corresponding Town Council in order to start the construction. The documentation to be submitted is complex and huge.

Among this documentation, we can outline the following:

a) application forms by means of which the license is requested;

b) the tax liquidation applications;

c) the statement of the relevant technicians certifying that the construction fulfils all the urban planning legislative and statutory requirements;

d) the statement of the promoter saying that he has hanged the relevant notice announcing the license has been requested and the characteristics of the construction;

e) 3 copies of the technical project of constructions endorsed by the corresponding Professional Association;

f) basic study of safety and health.

Without a license, when it is compulsory to have it, it is not allowed to begin the construction. And if it begins, it can be demolished after a penalize proceeding.

Once finished, the opening or first occupation license needs to be granted, also by the relevant Town Council. Without it, there is no access to water or electricity.

Indonesia Small Flag Indonesia

There are many permits required to conduct business activities in Indonesia. If under the Construction Law, the relevant permits/licences and penalties are set out below:

No.

Permits/Licenses/Other Documents

Penalties for Non-compliance

1

Individual Business Registration Certificate (Tanda Daftar Usaha Perseorangan) for sole proprietorship business.

Administrative sanction in the form of:

a)  written warning,

b)  administrative fine, and/or

c)  temporary suspension over the construction services activity.

2

Business License (Izin Usaha) for local and foreign construction services business entity.

Administrative sanction in the form of:

a)  written warning,

b)  administrative fine, and/or

c)  temporary suspension over the construction services activity.

3

Certificate of Business Entity (Sertifikat Badan Usaha) for construction services business entity.

Administrative sanction in the form of:

a)  written warning,

b)  administrative fine, and/or

c)  temporary suspension over the construction services activity.

4

Competency (Experience) Registration Certificate (Tanda Daftar Pengalaman) for medium and big scale construction services business entity.

-

5

License of Representative Office of Foreign Construction Services Business Entity (Izin Perwakilan Badan Usaha Jasa Konstruksi Asing).

-

6

Certificate of Work Competency (Sertifikat Kompetensi Kerja) for every construction employee of construction services business entity.

-

7

Employer of foreign construction services business entity must possess:

a)  Plan to Utilize Foreign Worker (Rencana Penggunaan Tenaga Kerja Asing),

b)  Permit to Employ Foreign Worker (Izin Mempekerjakan Tenaga Kerja Asing), and

c)  Certificate of Registration (Surat Tanda Registrasi).

Administrative sanction in the form of:

a)  written warning,

b)  administrative fine,

c)  temporary suspension over the construction services activity, and/or

d)  recorded in the black list.

8

Professional Expertise Registration Certificate (Tanda Daftar Pengalaman Profesional) for every construction professional.

-

Mexico Small Flag Mexico

Each State has their own regulations in order to perform construction contracts. Usual licenses and permits required, include: license for construction, use of soil (if commercial, residential use, etc.), compliance with safety regulations; environmental regulations, as well as attending labor and union provisions. Non compliance of licenses and permits may lead to closing of the construction by the authority and fines.

Colombia Small Flag Colombia

In general, depending of the type of construction projects, the requirements may vary. For example, in housing projects, the developers must obtain building permits. In these cases, permits are required for any new construction and are also typically required for alternations to existing buildings. There are as well penalties for non-compliance of these licenses, and penalties could even consist in the demolition of the project.

As for transportation infrastructure, none of those licenses are needed, but constructors must meet all of the environmental regulation mentioned above.

Once projects have ended, any type of penalty is unlikely. And though there are no there are no legal penalties for non-compliance, without prejudice to the contractual terms and, eventually, damages caused by the non-termination of a project such as environmental sanctions that may incurred.

Switzerland Small Flag Switzerland

Works can usually not be initiated before delivery and entry into force of a construction permit. During work, a complementary construction permit may be required if amendments are made to the initial construction project and, in the absence of any changes, compliance with the permit as well as with regulations for construction works apply (schedules, work during week days, no night work except if authorized, etc.) After completion of the work, delivery of an occupancy permit or certification by an architect is required. If the construction project does not comply with the construction permit, the risk is that the non-authorised part of the project has to be demolished and is further subject to fine.

Australia Small Flag Australia

Licensing requirements vary significantly between jurisdictions. All states require licences for specific trades such as electrical, gas and plumbing work.

In respect of building, New South Wales contractors require licences only for residential building work. In Tasmania and South Australia, licences are required to carry out both residential and commercial building work. Queensland has a comprehensive licencing system, which licences contractors for particular types of work subject to caps on the size of project for which the contractor is licenced. In some states, owners also need to ensure that the party they are contracting with holds the necessary licences to carry out building work.

A breach of licensing requirements is an offence, with legislation in most jurisdictions imposing fines for both individuals and corporations, and in some cases unlicensed contractors are prevented from exercising their contractual rights (i.e. recovering payment).

Norway Small Flag Norway

Most construction work requires permits from the planning and building authorities before the work can be started. The application process can be divided in two stages. Firstly, an application for a general permission must be made, following which the application for a project start-up permission (providing the right to commence work) can be made.

If during the work process the parties want to make changes which do not conform to the permissions already granted, an application for modification permission can be made.

When the construction work is finished, an application for a certificate of completion must be made in order to be able to use the building/project. A certificate of completion certifies that the building complies with the permits granted by the planning and building authorities.

If there is any remaining work to do before a certificate of completion can be issued, an application for a provisional permission can be made in order to be able to use the building.

Pursuant to the Planning and Building Act any entity carrying out (or allowing to be carried out) projects without the necessary permits shall be fined.

Sweden Small Flag Sweden

No general permits or licenses are required to carry on a construction business or to perform construction works in Sweden. Special authorizations may be required to perform certain types of work, such as installation of high-voltage equipment or removal of asbestos.

Pursuant to the planning and environmental legislation, several types of permits are required for construction projects, such as building and environmental permits. As part of the building permit procedures, a final certificate from the municipality is usually required before a new building can be taken into use.

Hong Kong Small Flag Hong Kong

Examples of licenses/permits that are required to be applied for before starting work are as follows:

License/permit

Who should apply

Penalties for non-compliance

Licence to conduct specified processes

Any owner of premises which is engaged in the conduct of any of the 31 specified processes under the Air Pollution Control Ordinance (Cap. 311).  

 

Examples include quarries, concrete batching plants, asphalt concrete plants, manufacturing plants that involve melting or recovery or metals.

A fine of HK$200,000 (approx. US$25,500) and imprisonment for 6 months. If the offence is continuing, a fine of HK$20,000 (approx. US$2,550) per day.

Notification of Construction Work under the Air Pollution Control (Construction Dust) Regulation (Cap. 311R)

The contractor responsible for a construction site where any notifiable work under the Air Pollution Control (Construction Dust) Regulation is proposed to be carried out.

 

Examples include demolition and construction of building and road construction work.

A fine of HK$25,000 (approx. US$3,200) on conviction for a first offence and HK$50,000 (approx. US$6,400) for a second or subsequent offence.

Construction Noise Permit (“CNP”) for general works/ prescribed construction works

Any person who intends to carry out construction activities with powered mechanical equipment during restricted hours, or carry out construction work prescribed under the Noise Control Ordinance (Cap. 400) during restricted hours in designated areas.

A fine of HK$100,000 (approx. US$12,750) on first conviction, HK$200,000

(approx. US$25,500) on second or subsequent conviction, and in any case HK$20,000 (approx. US$2,550) for each day during which the offence continues.

 

CNP for percussive piling

Any person who intends to carry out piling work at the construction site in a percussive manner.

A fine of HK$100,000 (approx. US$12,750) on first conviction, HK$200,000

(approx. US$25,500) on second or subsequent conviction, and in any case HK$20,000 (approx. US$2,550) for each day during which the offence continues.

 

Approval for establishing a construction waste disposal account under the Waste Disposal (Charges for Disposal of Construction Waste) Regulation (Cap. 354N)

 

Main contractor who undertakes construction work contract with value of HK$1 million (approx. US$127,500) or above.

 

Application shall be made within 21 days after the contract is awarded.

A fine at HK$50,000 (approx. US$6,400) and, in the case of a continuing offence, a further daily fine of HK$1,000 (approx. US$130) for each day.

United Kingdom Small Flag United Kingdom

Parties typically need planning permission; Building Regulations compliance; approval from an inspector appointed under the Building Regulations; and, if required, environmental permits. Further licences and permits may be required if works will affect public areas, such as roads.

Public bodies (and those exercising public functions, such as utilities) must follow EU public procurement directives and principles.

There are various penalties for breach or failure to comply with permissions and licences, including removal or alteration of any work for contravention of any regulation or other provision of the Building Act 1984. Sanctions for breaches of planning control include criminal prosecution punishable by fine and requiring land to be restored to the condition it was in before the unauthorised development occurred.

United States Small Flag United States

Permit and licensing requirements vary by state and even locality (i.e., county, city, municipality, etc.). Permits are required to ensure that construction projects satisfy local, state and federal codes and meet minimum health and safety requirements. Permits are required for any new construction and are also typically required for alternations to existing buildings. For example, any alterantion to structural, plumbing, mechanical, or electrical systems typically requires a permit. Owners are required to obtain proper permits prior to the start of construction. Owners can, however, delegate this duty to a construction manager, program manager, general contractor, design-builder or other authorized-agent.

The permit process in many U.S. jurisdictions overlaps considerably with land use regulations. Many U.S. jurisdictions have strict zoning requirements that dictate the allowable uses for commercial property. The first step in any construction project is to review applicable zoning requirements to ensure that the zoning for the project allows for the anticipated commercial use. Once land use requirements have been satisfied, most U.S. jurisdictions require a pre-plan review where the applicable building or regulatory agency reviews the anticipated development plan and identifies items that may need to be modified before final construction drawings are submitted for review and permitting. Once that process has successfully concluded, a building permit / construction permit / commercial permit is issued that allows construction to commence.

In addition to obtaining a construction permit for the project, many jurisdictions also require additional trade-specific permits. For example, additional permits may be required for mechanical, electrical and plumbing trades. Again, an owner is typically required to obtain such permits, but this duty can be delegated downstream to an authorized agent or even to a trade-specific subcontractor.

Additional permits may also be required under federal and state environmental laws. For example, the Clean Water Act requires that an owner obtain a permit for the discharge of storm water if construction will disturb one or more acres of land. If the project will require discharge of dredged materials (e.g., in connection with the construction of an in-water structure or marine wharf) a permit is required by Section 404 of the Clean Water Act. Depending upon the type of Project, permits may also be required under the Clean Air Act as part of an effort to reduce pollution.

Once a permit is issued, inspections will be required at different milestones to insure compliance with permit conditions and applicable building codes. Such inspections must be coordinated with the local permitting agency, and approval is typically required before further construction can proceed. Once the project is complete a final inspection will be required to obtain a use and occupancy permit. The project cannot be used for its intended purpose until a use and occupancy permit is awarded by the permitting agency.

Depending upon the nature of the project, additional permits may be required. For example, permits may be required from the Federal Department of Transportation and/or the local transit authority if the project will have any significant impact on federal, state or local roadways. In addition, permits will likely be required in order to tie the project into municipal sewer and water lines. Storm water prevention permits and other sedimentation and erosion control permits may also be required.

Many states and localities also require contractors to obtain contractors licenses prior to performing construction work in that locality. Some U.S. jurisdictions also require that joint ventures obtain licenses prior to contracting for work. Likewise, professional engineers and architects are required to be licensed in any state where work will be performed. A professional engineer or architect typically cannot affix his or her seal to drawings for use in a construction project unless that professional engineer is licensed in the state where the work is to be performed. It must also be noted that the specific requirements placed upon professional engineers and architects differ considerably among the various states.

Failure to obtain proper permits and licenses can have devastating consequences for the owner and the project. If a permit is not obtained, the project can be shut down by the local building authority until proper permits are approved. If work performed without a permit fails to comply with applicable building codes, the local permitting agency can order the work to be demolished. In addition, failure to comply with zoning requirements can result in substantial fines and potentially having to demolish any work that does not comply with local land use laws.

It is also imperative that appropriate licenses are obtained. In most jurisdictions, unlicensed contractors and design professional are unable to get the permits required to commence construction work. If work is commenced, however, many jurisdictions prohibit unlicensed contractors and professional engineers from enforcing claims for unpaid work performed without a license. As a result, unlicensed contractors and professional engineers have no recourse for non-payment if services are provided in a jurisdiction where a license is required. In addition, some jurisdictions, like California, prohibit an unlicensed contractor or engineer from enforcing a binding arbitration clause.

Serbia Small Flag Serbia

In order to start working/building, an investor must obtain Building Permit. Building Permit shall be issued to the Investor, by competitive authority, if the following conditions are met: (i) investor has the appropriate rights on the land (ii) design for a building permit is submitted (iii) administrative fees are paid;

Building is done based upon a Building Permit and technical documentation.

Technical documentation is drafted as: (i) general design; (ii) conceptual solution; (iii) conceptual design; (iv) design for a building permit; (v) project execution plan; (vi) As-built design of a constructed facility. Technical documentation can only be drafted by licenced engineers (civil engineers and architects). Such Licences are issued by Serbian Chamber of Engineers. Foreigners are authorised to draft technical documentation, only if there is reciprocity.

Design for Building Permit is subject to a technical control.

Documents necessary for the issuance of Building Permit are submitted electronically, and the Building Permit is issued in the same manner.

After the Building Permit is submitted, Investor must notify the authority that issued Building Permit on the start of the construction.

The Investor appoints a responsible contractor who is to manage the construction, and provides expert supervision during Construction. After the Construction is completed, Occupancy Permit shall be issued, if the building is suitable for use. Suitability is determined by technical inspection. Technical inspection can only be conducted by licenced and authorised person (natural or legal entity), which must be inscribed in the appropriate register.

The Investor must be compliant to all Law provisions. Law on planning and construction prescribes penalties for both economic offenses and misdemeanours, with the penalty range between 100.000,00 to 3.000.000,00 rsd.

Also, if the construction is not compliant, construction inspector is authorised to order termination, suspension of the works, or removal of the Building.

UAE Small Flag UAE

In order to carry out work within the UAE, companies must establish a limited liability company (an LLC) or a branch office within the UAE. Once established, the entity also has to obtain a trade licence in order to be licensed to carry out the proposed work. The corporate set-up for foreign companies wanting to bid-for or accept work can be daunting.

A building permit must be in place before the project commences, as well as a number of ‘no-objection certificates’ (usually referred to as NOCs) issued by the Civil Defence Authority (in Abu Dhabi, the General Directorate of Civil Defense in Abu Dhabi, and in Dubai, Dubai Civil Defense) and other permits concerning civil works, road access, waste management and utilities. Depending on the project, other NOCs may be required from other entities – i.e. in for an oil related project in Abu Dhabi, ADNOC (the Abu Dhabi National Oil Company) will likely be involved.

During a project, the AOR and any Engineer appointed in relation to the project would carry out inspections of each stage and any complex work. Some contracts may require that an inspection take place before further work is completed. A number of government authorities will also conduct inspections at various stages / for various works – i.e. the foundation and structure as well as the septic tanks and utilities infrastructure.

Upon completion (and, generally prior to being granted the Taking Over Certificate) all the authorities that completed stage inspections of various parts of the project will inspect and provide a final sign off. In addition, it is required that the relevant Civil Defence Authority conduct a final inspection and issue a completion certificate. A certificate permitting occupation of the building may also be required for some projects.

Germany Small Flag Germany

Non-EU citizens need a residence permit before starting work in Germany. Other permits may be needed depending on the type of work (e.g. health certificate in medical or in gastronomy professions). Penalties for non- compliance can be severe.

Austria Small Flag Austria

A building permit is required for a construction project. Where a construction project is carried out without a building permit, the public authority may order the project discontinued and may impose sanctions.

France Small Flag France

A wide variety of permits / licenses may apply to a construction project in France. In practice, a case by case verification will be necessary for each specific project to identify the permits / licenses will be required.

Among the most common permits/ licenses (this list not being exhaustive), we can quote:

  • Town planning authorizations: building permit (applicable for most construction projects), prior declaration of work for small projects involving limited works, etc. For large projects, a public inquiry may have to be carry out as a preliminary step prior to the filing of the building permit application;
  • Environmental authorizations: ICPE authorizations and other specific authorizations as the case may be;
  • Premises receiving public (Etablissements Recevant du Public or ERP): specific authorizations are necessary for projects including premises which will be opened to the public;
  • Retail: a specific authorization is required for projects involving the creation of retail surface areas exceeding certain thresholds;
  • Ile de France region (agrément pour creation de bureaux, commerces et entrepôts en Ile de France): a specific authorisation is necessary in order to create or expand offices, commercial areas or warehouse surface areas within the Ile de France region exceeding certain thresholds;
  • Residential: specific authorizations are necessary in order to change residential surface areas into another type of use (offices, hotels etc.) in certain Cities in France;
  • Work site: specific permits have to be obtained if it is necessary to occupy part of public land (such as walkways / roads) or to install a crane for the purpose of the carrying out of the works.

Non-compliance can constitute a criminal offense, subject to criminal law sanctions (fines, and in some cases, imprisonment). Other sanctions can also apply, including for instance the obligation to stop the operation of the building and/or the potential demolition of the building in some limited cases, or the impossibility to obtain a new permit to proceed with other works or to rebuild in case of a destruction of the construction for a casualty. Also, in case of a damage caused to a third party by a non-compliance, such third party can also request an indemnification from the responsible party in order to compensate such damages.

In addition to the permit/licenses, numerous declarations / statements will have to be filed within the authorities during the project by the different parties to the construction project, for the employment of workers, the start and the completion of the works, taxes, etc.

The authorization of a third party is also often necessary, depending on the specific constraints of the project (authorization of the landlord if the site is leased by the project owner, authorization from the neighbours / co-ownership, authorization of the architect of the existing building in case of a renovation project, etc.).

Greece Small Flag Greece

For the permits/licences required within the context of a construction project, please refer to Questions 2, 3b and 3c above. As regards the penalties imposed in case of non-compliance with such administrative requirements, severe sanctions apply both in administrative and criminal law. For instance, non-compliance with the environmental legislation (Art. 21 of Law 4014/2011) governing the requirements, shall lead to administrative liability, without prejudice to any other applicable civil or criminal sanctions. Likewise, as per Law 4495/2017, failure to comply with the prescribed building requirements, renders the respective construction unlawful and might incur the imposition of fines, prohibition of transfer, the issue of a demolition order, as well as criminal liability established under any applicable law.

Saudi Arabia Small Flag Saudi Arabia

Prior to construction of non-industrial projects, a permit must be obtained from the concerned municipality. Industrial projects may only be built in industrial zones which are administered by the Saudi Industrial Property Authority (Modon), or the Royal Commission for Jubail and Yanbu, or King Abdullah Economic City, each of which licences construction. In addition, for most projects environmental permits must be obtained from the General Authority of Meteorology or Environmental Protection.

Malaysia Small Flag Malaysia

The pre-requisite permits and licenses are briefly identified in question 3 above.

During the works, it may become necessary to apply for other form of permits and licenses. To give an example, the Lembaga Pembangunan Industri Pembinaan Malaysia Act 1994 (or otherwise known as the Construction Industry Development Board (“CIDB”) Act) contains a list of construction materials that must first be certified by CIDB prior to them being used for any construction works. The consequence of failing to obtain such certification may lead to a fine of up to RM500,000. Another example would be the need to apply to the local authorities if construction works are to be carried out beyond the allowable construction working hours.

Upon completion of the works, a Principal Submitting Person (must be a professional architect or engineer with a valid practicing certificate, dependent on the nature of the project) must sign a certificate called Certificate of Completion and Compliance (CCC) to confirm project completion and that all statutory requirements with regards to health and safety aspects have been met and the project is ready to be occupied with all essential utilities services connected. False certification may lead to a fine not exceeding RM250,000 or to imprisonment for a term not exceeding 10 years or to both.

Updated: October 16, 2018