Foreign investors can start a business in Lombok through a foreign-owned Indonesian company, known as a PT PMA. Your planned activities determine how much you can own, the investment required and the licenses needed to operate.
In this article, we will walk you through company setup in Lombok, including capital requirements, operating approvals, land, visas, tax and hiring.
Requirements to Start a Business in Lombok
To start a business in Lombok, you need an activity open to foreign investment, sufficient capital and premises where the business can operate. Establishing these requirements early helps you prepare the company documents and assess properties against the same business plan.
The main checks are:
| Requirement | What to establish before registering |
|---|---|
| Business activity | Which Indonesian business classifications, known as KBLI codes, cover your services or products, and whether they permit foreign ownership |
| Ownership | Whether you can own the company fully or need to meet ownership restrictions |
| Capital | The paid-up capital and planned investment required for the activities |
| Location | Whether the premises permit the intended use and have suitable land rights and infrastructure |
| Operating approvals | Which business, building, environmental and sector approvals the project needs |
For a property-based business, it is advisable to review the activity and site before paying a deposit. A building advertised as a villa, for example, may have residential approvals rather than permission to accommodate paying guests.
Business Structures for Foreign Investors in Lombok
A PT PMA is the usual structure if you want to own and operate a business in Lombok. Foreign ownership can reach 100% where the activity permits it, and a standard company has at least two shareholders, one director and one commissioner.
If you are still researching the market, a representative office may suit your plans. The main distinction is whether you need to earn revenue in Indonesia.
| Structure | Suitable use | Main limitation |
|---|---|---|
| PT PMA | Operating a business with foreign investment, earning revenue and employing staff | Must meet foreign-investment, capital and licensing requirements |
| Representative office | Market research, promotion and liaison for an overseas company | Cannot operate an ordinary revenue-generating business in Indonesia |
| Domestically owned PT | Operating a business funded and owned through domestic investment | Does not provide a route for foreign share ownership |
A domestically owned PT is therefore not an alternative if you intend to own shares in the business. Having an Indonesian partner hold shares on your behalf also creates a legal problem: Article 33 of Investment Law 25/2007 prohibits nominee shareholding agreements and declares them void.
If you plan to invest alongside an Indonesian partner, record the actual ownership through a PT PMA and check the permitted foreign shareholding for your activity. Both parties can then hold their shares within the foreign-investment framework.
Capital Requirements for a Lombok Company
A PT PMA normally needs at least IDR 2.5 billion in issued and paid-up capital per company under Ministry of Investment Regulation 5/2025. It also needs an investment plan that generally exceeds IDR 10 billion, with the calculation depending on the activity and location.
Paid-up capital is the shareholders’ contribution to the company. The investment plan covers the project’s planned investment, so the two figures should not be treated as separate amounts that must simply be added together.
| Activity | Main investment calculation |
|---|---|
| Most business activities | More than IDR 10 billion per five-digit KBLI activity and project location, excluding land and buildings |
| Short-term and long-term accommodation | Land and buildings can count toward the investment value |
| Food and beverage services | More than IDR 10 billion, excluding land and buildings, calculated using the first two KBLI digits and the regulation’s location rule |
| Property development and operation | Treatment differs between whole buildings, integrated developments and separate units |
| Businesses inside a special economic zone | Separate investment provisions apply |
For example, land and buildings can count toward an accommodation project’s investment value. However, that treatment should not be applied automatically to a company buying separate property units.
The minimum capital requirements for a PT PMA also include a 12-month retention requirement. During that period, the company can use paid-up capital to purchase assets, construct buildings and fund operations.
Your opening budget will also need to cover premises, professional fees, permits, fit-out and operating expenses. Reviewing these costs alongside the capital requirements gives you a funding plan for the actual business.
How to Register a PT PMA in Lombok
The company registration process in Indonesia establishes the legal entity before its activities and locations are registered for licensing. You can prepare premises and operating applications alongside incorporation, provided they reflect the same project.
1. Select the business activities
Choose the KBLI classifications that match what your company will offer. OSS provides KBLI 2025 classifications and conversion information for older codes.
A villa operation, an independently operated restaurant and a tour business may require different classifications. Before adding codes, distinguish activities that earn their own revenue from those that simply support the main operation.
Some activities are reserved for domestic businesses or have ownership restrictions. Commercial accommodation also needs to be distinguished from an owner-occupied homestay, known as pondok wisata.
2. Agree on ownership and management
Settle the shareholders, share allocations, director and commissioner before preparing the deed. These decisions affect control, future transfers and immigration options.
If you intend to apply for an investor stay permit, assess its shareholding requirement at this stage. The company’s minimum paid-up capital does not automatically qualify each shareholder for that permit.
3. Prepare the deed and obtain company approval
A notary prepares the deed of establishment, and the Ministry of Law approves the company’s legal entity status. Tax registration follows through the Directorate General of Taxes’ systems.
Shareholders can arrange representation through an accepted power of attorney. Incorporation can therefore be coordinated remotely, although banks and later approvals may have separate attendance or verification requirements.
4. Register through OSS
The company enters its activities, investment plan and project locations in the Online Single Submission system (OSS). It then receives its business identification number, or NIB.
For low-risk activities, the NIB provides the business licensing document. Other activities require a standard certificate or license before the relevant operations can begin.
5. Open the bank account and fund the company
The company opens a bank account and deposits the required capital. Records of shareholder contributions and business expenditure support its accounts and investment reports.
At this stage, the next steps depend on the premises. An office-based business may have fewer site requirements than a project involving construction, food preparation or guest accommodation.
Business Licenses and Site Approvals in Lombok
An NIB identifies the registered business, but additional approvals depend on what it does and where it operates. Risk-based licensing follows Government Regulation 28/2025, which replaced Government Regulation 5/2021.
For a site-based business, the approval process can include:
| Requirement | What it establishes |
|---|---|
| Spatial conformity, known as KKPR | Whether the activity fits the location’s spatial rules |
| Environmental documentation or approval | How the project will address its environmental risks and impacts |
| Building approval, known as PBG | Whether the proposed construction or building changes meet the building rules |
| Certificate of functional worthiness, known as SLF | Whether the completed building is fit for its approved use |
| Risk-based business licensing | The NIB, standard certificate or license required for the activity |
| Sector and supporting approvals | Additional requirements such as tourism certification, food hygiene or product registration |
If you are taking over an existing property or business, start by reviewing the approvals already issued. Some older documents remain valid under transitional provisions, while changes to the building or activity may require further applications.
Spatial and environmental requirements
Spatial conformity establishes whether your proposed activity can take place at the site. Where an integrated detailed spatial plan is available, the OSS process can be simpler; other applications require further assessment.
Environmental requirements depend on the activity, scale, impact and location. Some projects use a statement of environmental management, while others require environmental management and monitoring documentation, known as UKL-UPL, or a full environmental impact assessment, known as AMDAL.
For coastal developments, the assessment also needs to address the location’s restrictions and environmental conditions. Project size alone does not determine the required route.
Building approval and permitted use
Before starting construction, you need building approval, known as PBG, for the proposed plans. Applications are handled through the national building-management system.
Once construction is complete, the building needs a certificate of functional worthiness, known as SLF, before use. This assesses whether the completed building is safe and suitable for its intended function.
For an existing property, review both the approvals and the permitted use before paying a deposit. A private residence does not automatically have permission to operate as commercial accommodation or a restaurant.
Tourism licensing and certification
Tourism businesses follow the standards in Tourism Regulation 6/2025. The risk level determines their OSS licensing requirements, while tourism business standards certification is a separate process.
Article 5 requires the tourism business standards certificate within one year after business licensing is verified, with exceptions for certain medium-low-risk activities. That deadline does not remove other requirements that must be met before opening.
The exact activity determines the approval list. A hotel, travel agency and dive operator should therefore be assessed separately, even though all serve tourists.
Restaurants, cafés and retail products
A restaurant preparing meals for customers follows different requirements from a manufacturer selling packaged food. Food-service businesses need to address hygiene requirements, business standards and local tax registration.
Food and beverages supplied by medium and large businesses are already within the mandatory halal framework. Products made from non-halal ingredients follow the non-halal disclosure rules, so the menu and production process determine the appropriate route.
Packaged processed food, cosmetics and supplements require separate product checks. Registration or notification with the Indonesian Food and Drug Authority (BPOM) may be required before sale, although exemptions and different routes exist for certain foods and uses.
Starting a Business in Mandalika Special Economic Zone
If your proposed site is inside Mandalika special economic zone, the licensing route and potential incentives differ from an ordinary Lombok location. The zone covers 1,035.67 hectares in Pujut, Central Lombok, and was established under Government Regulation 52/2014.
Mandalika is developed and managed by Indonesia Tourism Development Corporation. Businesses within its designated boundaries use the zone administrator’s licensing route through OSS.
A property advertised as being near Mandalika does not automatically fall inside the zone. Confirming the boundary is therefore an early part of assessing a proposed site.
Potential facilities include:
- A corporate income tax holiday for approved investment in the zone’s main activities
- Tax allowances for investments meeting the separate conditions
- VAT and luxury goods sales tax facilities on eligible transactions
- Customs facilities for approved goods and uses
The corporate income tax holiday starts at IDR 100 billion of investment. The reduction period depends on the investment value:
| Investment value | Reduction period |
|---|---|
| IDR 100 billion to below IDR 500 billion | 10 years |
| IDR 500 billion to below IDR 1 trillion | 15 years |
| IDR 1 trillion or more | 20 years |
For a smaller project, the tax-allowance route may be relevant. Compare the available facilities with infrastructure, premises and developer terms, and confirm the admission conditions for your proposed business.
Land and Property for Foreign Investors in Lombok
Foreign individuals cannot own freehold land, known as Hak Milik, in Lombok. A PT PMA can hold certain other land rights, while leases provide a contractual route to using land or premises.
The appropriate arrangement depends on whether you are acquiring a home for personal use or securing a commercial site.
| Arrangement | How it can be used |
|---|---|
| Hak Guna Bangunan, or right to build | An Indonesian company, including a PT PMA, can hold buildings and use the land under the title’s terms |
| Hak Pakai, or right to use | Available to qualifying companies and foreign individuals under different conditions |
| Lease | Provides contractual use of land or premises for the agreed term |
For eligible land, Hak Guna Bangunan can have an initial term of up to 30 years, an extension of up to 20 years and a renewal of up to 30 years. These periods depend on the underlying land right and required approvals; an 80-year term is not granted automatically.
Foreign individuals purchasing a home must meet the immigration-document and regional minimum-price requirements. Residential ownership does not itself authorize commercial rental operations.
It is advisable to review the title, zoning, access, boundaries and existing approvals together before committing to the property. For a lease, the agreement also needs clear extension and assignment terms, including what happens if the landowner sells or dies.
Additional checks for the Gili islands
A business on a Gili island can face small-island, conservation and marine-space requirements in addition to land and business approvals. These are particularly relevant to beachfront facilities, jetties, dive operations and activities using surrounding waters.
Minister of Marine Affairs and Fisheries Regulation 13/2026 governs small-island use and replaced Regulation 10/2024. A proposed island site therefore needs a separate assessment of coastal and small-island requirements before you commit to it.
Using a Virtual Office in Lombok
If your business is office-based, a virtual office may provide a registered address where local rules permit the activity. It cannot replace the operating premises needed for a villa, restaurant, dive center or other site-based business.
Some investors incorporate while searching for premises. Once the operating site is secured, it must be added to the company’s project and licensing records as required before operations begin.
Visas and Work Permits for Foreign Owners
One common misconception among foreign founders is that owning shares in a company will automatically give them permission to live and work in Indonesia. In reality, if you plan to manage the company from Lombok, the immigration route needs to match your role and investment.
The standard E28A investor KITAS requires evidence of at least IDR 10 billion in shares in the sponsoring company. This is separate from the PT PMA’s IDR 2.5 billion minimum paid-up capital.
Another work and stay route may be appropriate if you do not meet the investor requirements. Assessing this before finalizing the shareholding can prevent a mismatch between the company structure and your intended role.
Foreign employees commonly need employer sponsorship, an approved foreign manpower utilization plan known as RPTKA, and the appropriate work and stay permissions.
Visitor permissions may allow meetings or investment preparation, depending on the visa. They do not provide general authorization for daily business operations or employment.
Tax and Reporting for a Lombok Company
Once the company is registered, its tax and reporting obligations continue during preparation and operation. The treatment of income depends on whether you provide services, sell goods, operate accommodation or lease property.
| Obligation | Main rule |
|---|---|
| Corporate income tax | Standard rate of 22% on taxable profit under the ordinary regime |
| Article 31E rate reduction | Resident companies with turnover up to IDR 50 billion receive a 50% rate reduction on taxable income attributable to their first IDR 4.8 billion of turnover |
| Small-business final tax | A newly registered ordinary PT PMA does not qualify for the 0.5% regime under PP 20/2026 |
| Ordinary land and building rental income | Generally subject to final income tax of 10% of gross rental income; accommodation services follow different treatment |
| VAT | Statutory rate of 12%, with an effective 11% for most non-luxury taxable supplies under the prescribed calculation |
| Local tax on food and beverage or hotel services | Collected under the relevant local rules, with a statutory rate ceiling of 10% for these categories |
| Withholding taxes | Apply to salaries and specified service, rental and overseas payments |
| Investment activity reporting, known as LKPM | Normally quarterly for PT PMAs, with filing during the first 15 days after the quarter |
| Annual corporate income tax return | Due within four months of the financial year-end, normally 30 April for a calendar-year company |
For budgeting, distinguish taxes on your company’s profit from taxes collected on customer sales. Hotel and restaurant services covered by local consumption tax generally fall outside VAT, while other activities in the same company may receive different treatment.
If your company qualifies for the Article 31E reduction, the IDR 4.8 billion threshold refers to turnover, not profit. Above that threshold, the reduced rate applies to a proportion of taxable profit.
Alongside tax filings, your company must submit investment activity reports, known as LKPM. These track investment realization, employment and business progress, so reporting can begin while you are still preparing to open, before revenue starts coming in.
Starting Your Lombok Business With Emerhub
Emerhub helps foreign investors assess their proposed activity, ownership and location before preparing company and licensing applications. Our team can support you with:
- Business-classification and foreign-ownership assessments
- PT PMA registration and capital planning
- Coordination of site checks and licensing applications
- Investor and work visa applications
- Bookkeeping, payroll, tax filings and investment reports
Once the business is operating, accounting and tax support helps keep its financial records and reporting organized.
Request a Lombok business setup assessment to discuss your planned activity, budget and proposed premises.
Frequently asked questions
Can a foreigner start a business in Lombok?
Foreign investors normally establish a PT PMA for activities open to foreign investment. Some activities permit full foreign ownership, while others have restrictions or additional conditions.
The company must also meet capital, location and operating requirements. Incorporation alone does not authorize every activity at every site.
How much capital do I need to open a villa business in Lombok?
A PT PMA normally needs at least IDR 2.5 billion in paid-up capital. Its accommodation investment plan generally must exceed IDR 10 billion per relevant activity and project location, with land and buildings included.
Different calculations apply to some property activities and special economic zone investments. Investor visa requirements also need to be assessed separately.
Can I use a virtual office for a Lombok company?
A virtual office may suit an office-based activity where the address is accepted under local rules. A villa, restaurant or other site-based operation still needs approvals for its actual premises.
If you secure operating premises after incorporation, update the project and licensing records before beginning the relevant operations.
Do I need an investor KITAS to run my company?
An investor KITAS is one route for qualifying shareholders. The standard E28A route requires at least IDR 10 billion in shares in the sponsoring company.
Another work and stay route may be appropriate depending on your role. Owning shares does not automatically authorize daily work in the business.
Can I register a Lombok company remotely?
Much of incorporation can be coordinated remotely, including representation through an accepted power of attorney. Banks, site inspections and later licensing processes may require additional attendance or verification.
Remote incorporation does not remove the need to assess the premises where the business will operate.