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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
Lombok is experiencing a significant surge in its economy, largely driven by its booming tourism and real estate sector.
The island’s natural beauty, including its beaches and Mount Rinjani, attracts tourists from countries like Australia, Europe, and Southeast Asia. As a result, over the last few years, it has become a popular destination for business and real estate investors.
If you are looking to join in, whether by starting an accommodation business, a restaurant, or something else entirely, you must establish a local entity in Lombok. This article will walk you through the essentials, from key requirements to start a business to registration process, and important operational permits.
Legal Framework for Starting a Business in Lombok
Popular Business Entities in Lombok, Indonesia for Business Owners
When establishing a business in Lombok, choosing the right legal entity is crucial for compliance, taxation and operational flexibility. Each business entity comes with its own requirements, benefits, and restrictions.
Following are the legal entity types that are highly recommended by our experts when establishing a business in Lombok, depending on the ownership structure:
- PT PMA (Perseroan Terbatas Penanaman Modal Asing): For foreign individuals or companies looking to invest in and own a business in Indonesia. It is the most common structure because it offers 100% ownership and control as a foreigner, allowing you to participate in various sectors such as tourism, renewable energy, and real estate.
- Local PT (Perseroan Terbatas): A local PT is a limited liability company where 100% ownership is held by Indonesian individuals or companies. For local entrepreneurs and investors, registering a local PT company is the most popular option compared to other structures such as sole proprietorships, partnerships, etc.
Key Requirements for Starting a Business in Lombok
Compliance with Indonesian regulations ensures that your business operates legally, avoiding potential penalties or even business closure.
To start a company in Lombok, you need to adhere to the following requirements set by the Ministry of Law and Human Rights:
- Shareholders and Corporate Officers – A minimum of two shareholders is required for a PT PMA company, which can be individuals or corporate entities. Shareholders can also serve as directors or commissioners. The company must have at least one director responsible for managing the business and one commissioner overseeing the director’s actions.
- Minimum Capital – To start a PT PMA business in Lombok, the minimum capital requirement is at least IDR 2.5 billion (~USD 150,000). This requirement ensures that the company has sufficient financial backing to operate effectively. The uninvested capital becomes the owner’s liability.
- Commercial Address – a registered commercial address is necessary, which can be a qualified business or virtual address. However, it must comply with local zoning regulations and have a building permit (IMB) if applicable. Virtual offices can be used if a physical address is not available.
Mandatory Licenses and Permits for Businesses in Lombok
Researching and securing all required licenses is a critical step for businesses in Lombok before commencing operations. The Indonesian regulatory environment is complex, with various licenses depending on the business type and location. Here are some key examples:
- Commercial License (SIUP): Required for businesses engaged in commercial activities, ensuring compliance with trade regulations.
- Industrial License (IUI): Necessary for industrial operations, such as manufacturing, to ensure adherence to safety and environmental standards.
- Tourism License (TDUP): Especially important for Lombok, as tourism is a significant sector. This license is required for businesses like hotels, restaurants, and tour operators.
- Building Permit (IMB): Essential for any construction or renovation projects, ensuring compliance with local zoning laws and building standards.
- Environmental Permits: Required if the business has potential environmental impacts, such as factories or large-scale construction.
- Halal Certification: Mandatory for businesses dealing with food products to ensure compliance with Islamic dietary laws.
- BPOM Certification: Necessary for companies producing food, beverages, cosmetics, or pharmaceuticals to ensure product safety and compliance with health regulations.
Emerhub can guide you through the initial phase on how to start a business in Lombok. We can give you proper guidance on suitable legal entities as well as help gather all key requirements for starting your company. Furthermore, we can help secure all mandatory licenses and permits you need to legally operate in Lombok.
How to Register Your Business in Lombok
As mentioned earlier, you must register your company in order to operate legally in Indonesia and ensure compliance with local regulations.
While the registration process itself is considerably easy, it is crucial to structure the PT PMA considering your business goals, accurately prepare necessary documents, and meet the pre-requisites to ensure successful registration. Any mistakes during this process can cause unnecessary delays.
Following are the steps to legally start your business in Lombok, Indonesia:
- Business Name Reservation – choose and reserve a unique company name that complies with Indonesian naming regulations. The name must not duplicate an existing company name and should adhere to Indonesia’s language and format guidelines.
- Preparation of Deed of Establishment (Akta Penderian) – contains crucial documents including Articles of Association (AoA) and details business activities and shareholder information. This document needs to be signed by company founders and notarized.
- Application Submission to MOLHR for Business Registration – The Deed of Establishment is submitted to the MOLHR for approval. Once approved, the company is officially registered with a legal entity status.
- Secure a Tax Identification Number (NPWP) – your company must register with the local tax office to obtain a Tax Identification Number. This is necessary for tax compliance and often required for license applications
- Application for Business Registration Number (NIB) – serves as a comprehensive permit that simplifies the process of obtaining business licenses and operational permits. To apply for an NIB, you need to register through Indonesia’s OSS system.
Emerhub’s company incorporation experts will handle the entire Indonesian registration process on your behalf and help you secure necessary approvals.
We provide end-to-end support from the initial stages of the process to post-registration compliance such as applying for industry-specific permits or opening a corporate bank account.
You can request a free consultation with our experts by filling out the form below. We will discuss your needs and how we can help you start your business in Lombok.
FAQs About How to Start a Business in Lombok
Yes, you can use a virtual office for company registration in Lombok. Indonesian legislation allows the use of virtual offices under certain conditions, particularly beneficial for smaller companies, startups, or those looking to minimize overhead costs.
Here’s an overview of key regulations for hiring foreigners for your company in Lombok:
- Foreign Worker Utilization Plan (RPTKA): Employers must submit an RPTKA application detailing the position, qualifications, and justification for hiring a foreign national. This plan is crucial for obtaining approval from the Ministry of Manpower.
- Work Permit (IMTA): After RPTKA approval, employers must apply for an IMTA to authorize foreign workers to work in Indonesia.
- Limited Stay Visa Permit (KITAS): Foreign workers must register for a KITAS upon arrival in Indonesia, which grants legal residency for the duration of employment.
Position Restrictions: Certain positions are reserved for Indonesian nationals, such as administrative, clerical roles, and labor-intensive jobs.
Yes, you can register a company remotely in Lombok. The registration process can be completed without your physical presence, provided that the shareholders are able to grant a power of attorney to a representative who can sign the necessary documents on your behalf. The use of the Online Single Submission (OSS) system further facilitates remote registration by centralizing many of the necessary steps, such as obtaining a Business Identification Number (NIB) and other licenses.
Foreign investment in Lombok is primarily open in sectors related to tourism, real estate, hospitality, and eco-businesses under the Positive Investment List. Here are key sectors available for foreign investment in Lombok:
- Renewable Energy and Other Incentivized Sectors
- Tourism and Hospitality
- Real Estate
- Eco-Business and Sustainable Development
- Infrastructure and Services Supporting Tourism
Foreign companies cannot directly own freehold land in Lombok. However, you can legally acquire land by establishing a PT PMA, which allows you to obtain land use rights for up to 30 years (renewable up to 80 years). Alternatively, foreigners can enter into long-term lease agreements (leasehold) for similar durations. These legal structures enable you to securely use and develop land for business purposes such as tourism, real estate, and commercial ventures while complying with Indonesian regulations.
