Setting Up a Business in Lombok: A Guide for Foreign Investors

Lombok has become a strong option for foreign investors looking to expand in Indonesia. As Bali reaches market saturation and faces new PT PMA restrictions in some sectors, Lombok offers steady growth in tourism, infrastructure, and commercial development.

While Lombok offers a different business environment from Bali, the legal requirements for establishing a company remain important. Choose the right business structure, check the correct KBLI classification, and understand Indonesia’s licensing and compliance requirements before starting operations.

This guide explains the legal structures available to foreign investors, the PT PMA registration process, OSS RBA licensing requirements, ongoing compliance obligations, and the common mistakes to avoid when setting up a business in Lombok.

Why Is Lombok Becoming a Business Destination for Foreign Investors? 

Lombok is attracting more foreign investment in areas such as tourism, hospitality, food and beverage, property development, and professional services. Unlike Bali, which has imposed new restrictions on certain business activities, Lombok still allows foreign investment in many sectors, provided investors comply with the relevant KBLI classification and licensing rules.

The island also benefits from ongoing infrastructure development, expanding tourism, growing international connectivity, and the development of the Mandalika Special Economic Zone (SEZ). These changes are creating more business opportunities for foreign investors.

Even though Lombok has significant investment potential, foreign entrepreneurs still need to comply with Indonesia’s company setup, licensing, and regulatory requirements before starting their businesses.

What Legal Structure Should You Use?

Several business structures are available in Indonesia, each designed for different ownership arrangements and business activities. 

For foreign investors planning to operate in Indonesia, a PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the appropriate legal structure. It allows foreign individuals and entities to establish and operate a business, subject to the applicable KBLI classification and foreign ownership requirements.

A PT PMA provides limited liability protection, allows the company to open a corporate bank account, and enables it to enter into contracts with customers, suppliers, financial institutions, and government agencies. It is also the primary legal structure for foreign investors to conduct commercial activities and hire staff in Indonesia.

Why Is Choosing the Right KBLI Important? 

Before reserving a company name or preparing incorporation documents, first determine the appropriate KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) for your business activities. 

Indonesia’s standard business classification system sets the allowed level of foreign ownership, the OSS RBA risk classification, and the required licenses or permits, in addition to a Business Identification Number (NIB).

As of 2026, this classification is KBLI 2025, introduced under BPS Regulation No. 7 of 2025. It replaced KBLI 2020 in December 2025. The transition deadline for existing companies passed on 18 June 2026. 

If you are incorporating a new PT PMA now, there is no transition period. Your Articles of Association, NIB application, and OSS filing will automatically use KBLI 2025 codes from the start. If you already operate a company in Indonesia under an older code, confirm whether it was reclassified under the new system before it affects your licensing or reporting.

Selecting the wrong KBLI can cause licensing delays, amendments to your company registration, or extra administrative procedures. Confirming the appropriate KBLI before choosing your company structure, business location, and investment plan helps avoid unnecessary delays during registration.

How Much Capital Does a PT PMA Need? 

Before registering, you should understand the capital structure a PT PMA requires. Under BKPM Regulation No. 5 of 2025, the minimum paid-up capital is IDR 2.5 billion, reduced from the previous IDR 10 billion threshold, effective October 2025. This paid-up capital belongs to the company and can be used for business operations. It is not a government fee.

BKPM still requires a total investment plan of IDR 10 billion per KBLI code, excluding land and buildings. The plan does not need to be fully deployed in year one. However, you must show consistent progress through your quarterly LKPM reports.

Capital requirements and reporting obligations can affect how you structure your investment from the outset.

How Do You Register a PT PMA in Lombok? 

Follow each stage to set up your PT PMA efficiently and remain fully compliant with Indonesian regulations.

If you follow each step in order, you can expect legal entity formation from name reservation to NIB issuance to take one to two weeks. This estimate does not cover sector-specific licenses, KITAS processing for directors, or initial document preparation. These additional steps often add several weeks to your overall timeline.

Attempting OSS registration before receiving Ministry approval, or skipping steps between name reservation and OSS registration, will likely delay your project by several weeks.

What Is OSS RBA, and Why Does Your Risk Level Matter?

OSS RBA (Online Single Submission, Risk-Based Approach) is Indonesia’s centralized digital licensing platform. It classifies your company into a risk tier based on your KBLI, and that tier determines exactly what you need to legally operate.

Your NIB serves as your business identity, company registration number, and, when relevant, your import identification. For low-risk businesses, the NIB is often the only legal requirement. If you operate in hospitality, tourism, or property, you will need to secure additional licenses in addition to the NIB.

What Happens After You’re Registered?

Receiving your PT PMA approval and NIB is only the beginning of your compliance obligations. After your company is established, you must continue meeting Indonesia’s ongoing corporate, tax, and investment reporting requirements, whether or not your business has started generating revenue.

• LKPM (Quarterly Investment Activity Reports), submitted through the OSS system, including during any pre-operational or construction phase.
• Monthly tax reports for regulated activities, which vary by KBLI: PBJT for restaurants, cafes, spas, and entertainment venues; PPh 4(2) on property rentals; PPh 21 on payroll; PPh 23 on vendor and service payments. 
• Corporate Annual Income Tax Return (SPT Tahunan Badan), which must generally be filed within four months after the end of the company’s financial year.
• Director’s Annual Personal Tax Return, for directors who hold an Indonesian NPWP.
• Annual General Meeting of Shareholders (GMS). Under Minister of Law Regulation (Permenkum) No. 49 of 2025, the AGMS resolution must be notarized and uploaded to the SABH/AHU Online system every year, and companies should also ensure their beneficial ownership information remains accurate. This is no longer a routine formality. Failure to comply can result in your AHU Online account being blocked, preventing changes to your Articles of Association, directors, or capital structure.
• BPJS registration, covering eligible directors, commissioners, and employees in accordance with Indonesian employment regulations.
• Proper bookkeeping and accounting records maintained in Indonesian Rupiah and retained in accordance with Indonesian accounting and record-keeping requirements.

Failing to submit LKPM reports on time may result in administrative sanctions, including warnings and the possible suspension of your NIB, which can also affect the validity of other licenses linked to your business.

If you want the full breakdown of what a PT PMA needs to stay compliant year-round, our complete guide to PT PMA compliance covers each obligation and its deadline in detail.

What Mistakes Do Foreign Investors Most Often Make in Lombok?

Several common mistakes can delay the company registration process or create compliance issues after incorporation.

• Selecting an incorrect KBLI that does not accurately reflect the company’s intended business activities.
• Submitting incomplete or inconsistent incorporation documents, including passport copies, proof of address, or business information that does not match the proposed activities.
• Delaying OSS RBA registration after incorporation, assuming the deed of establishment alone authorizes the company to begin operating.
• Failing to comply with ongoing obligations such as LKPM reporting and annual tax filings after the company has been established.
• Beginning business operations without fully understanding the licensing requirements applicable to the company’s sector and risk classification.

Carefully planning your company structure and compliance strategy from the outset can help reduce administrative delays and avoid unnecessary legal or operational issues.

Setting Up a Business in Lombok the Right Way

Lombok offers business opportunities for foreign investors across various sectors. Establishing a company requires careful planning to ensure the appropriate KBLI, legal structure, licensing, and compliance obligations are addressed from the start.

ILA Global Consulting assists foreign investors with PT PMA incorporation, business licensing, and ongoing corporate compliance throughout Lombok, Bali, and the rest of Indonesia.

Consult with ILA Global Consulting to develop the most suitable business structure for your investment before starting your company.

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