Starting A Business in Lombok: Why and How

Many years ago, many people did not know about Lombok. But today, Lombok is often referred to as “The Little Sister of Bali”. Therefore, because of its increasing fame and popularity, Lombok has become one of the most common choices when it comes to starting a business in Indonesia.

A huge number of tourists has been arriving in Lombok over the past few years since the launch of its new international airport in 2011. In addition, being an island east of Bali and west of Sumbawa, Lombok is one of the region’s best performers in both local and foreign investments. This is especially true for tourism and property investments, owing to its ever-increasing infrastructure and property developments.

Now, let’s take a look at the reasons you should invest in Lombok and how you should go about choosing the right type of legal entity for your business.

Starting A Business in Indonesia: Why Invest in Lombok

The earthquakes in August 2018 brought serious consequences to many tourism businesses in Lombok. However, approximately 90% of tourism operations on the islands are already back to business since then. In addition, most tourism businesses in south Lombok are open as normal just like pre-earthquake as the beaches are not very much impacted.

With so many potentials that are still available for your to take advantage of, here are the reasons you should invest in Lombok:

• Lombok has become conveniently accessible with its newly constructed international airports and other infrastructure developments
• The cheap airfares from low-budget airlines have allowed more and more visitors to come into the island, enhancing tourism investment opportunities
• Lombok has been gaining so much popularity for the past several years as “the new Bali” – for surfers, beachgoers, vacationers and of course the investors
• The investment climate is positive in Lombok with the government’s effort to boost the local revenues by attracting investors and visitors
• Many investors have already started to build hotels, bars, restaurants, salons, and resorts to cater to the increasing demands

Options to Set up a Company in Lombok

With these fascinating potentials and possibilities, Lombok is an alluring destination for individuals and companies to invest and set up a company.

Before anything, you must choose the right type of legal entity that works for your business requirements. If you haven’t had any experience in setting up a company in Indonesia, especially when you’re a foreigner, opting for professional consultation or expert assistance is highly recommended.

Basically, foreign investors often use these three types of legal entity in Lombok:

Local Limited Liability Company (PT)

• It has low minimum investment capital
• Only local nationals are eligible for its ownership
• As a foreigner to set up a PT, you will require a Special Purpose Vehicle arrangement through reliable business consultant
• No restrictions under the Negative Investment List (NIL)

Foreign-owned Limited Liability Company (PT PMA)

• Restricted under NIL with 1%-100% foreign ownership. The percentage of ownership depends on the type of business you are in
• It has better conditions if you want to do import
• You are allowed to provide work permit and business visa sponsorship under this establishment

Representative Office

• No transactions or business activities with incomes/profits are allowed
• Suitable for business promotion, market presence and market survey

PMA Scheme in Lombok

If you want to buy a property in Lombok as a foreigner for investment, you will need to purchase it under the PMA scheme that is controlled by the government in Indonesia. You must provide the following:

• Business plan
• Proof of documents for your business plan on how it can help the communities
• Proof of deposits
• Other requirements on request based on the type of your business

How Cekindo can Assist in Starting a Business in Lombok, Indonesia

With a team of specialists in business setup, Cekindo is your gateway to starting a business in Lombok. Our experienced consultants and legal practitioners can guide you through the company registration process, step-by-step.

Speak to one of our consultants today by filling in the form below.