Investor’s Guide in Bali and Lombok - 12 Winning Strategies Every Foreign Entrepreneur Must Know

Building your business in paradise comes with incredible opportunities, and complex regulations. The Smart Investor’s Guide in Bali and Lombok gives you a complete roadmap to invest wisely, protect your assets, and maximize long-term returns in two of Indonesia’s most promising regions. Whether you’re expanding your portfolio or launching your first venture, this guide reveals the essentials every foreign investor must know to thrive in Bali and Lombok’s evolving economic landscape.

Why Bali & Lombok Now?

Indonesia’s investment landscape is entering a new era of opportunity, especially in Bali and Lombok. These islands are not just world-class tourism destinations but rising hubs for sustainable development, digital entrepreneurship, and resort-driven real estate. According to BKPM data, Bali remains one of the top five provinces attracting foreign direct investment (FDI), while Lombok continues to gain momentum through the Mandalika Special Economic Zone (SEZ), supported by government incentives and upgraded infrastructure.

As the economy rebounds post-pandemic, new hospitality concepts, eco-resorts, and property projects are reshaping investor confidence. That’s why this Investor’s Guide in Bali and Lombok was designed, to walk you through the practical steps of doing business in paradise: from legal set-up, land ownership rules, permits, HR and recruitment strategies, tax planning, to risk mitigation and sustainable investment principles.

Whether you’re a foreign investor seeking long-term residency through capital investment, a hospitality developer expanding your brand, or an entrepreneur exploring regional opportunities, this Investor’s Guide in Bali and Lombok will help you navigate Indonesia’s dynamic business framework with clarity and confidence.

The Legal Structures & How to Incorporate (PT PMA vs Local PT)

Setting up the right legal entity is the first critical decision for any foreign investor entering Indonesia’s market. In this Investor’s Guide in Bali and Lombok, understanding the difference between a PT PMA (foreign-owned limited liability company) and a local PT (domestically owned entity) is essential for compliance, control, and scalability.

A PT PMA allows foreign investors to legally own shares in Indonesian companies, operate under their own brand, and engage in activities permitted by the Investment Coordinating Board (BKPM). However, it comes with a minimum paid-up capital requirement, typically IDR 10 billion, as updated in BKPM Regulation No. 5 of 2025, and must align with the selected KBLI (business classification) codes that define its scope of business.

A local PT, on the other hand, is suitable for smaller-scale operations or when foreign ownership restrictions apply. Many investors in Bali and Lombok choose to collaborate with local partners or establish a nominee structure (with caution) to navigate ownership limits in certain sectors, such as tourism accommodations or retail services.

Here’s a quick incorporation roadmap for your reference in this Investor’s Guide in Bali and Lombok:

1. Draft and notarize your company deed of establishment.
2. Register through OSS (Online Single Submission) to obtain your NIB (Business Identification Number) and operational license.
3. Report your investment realization and compliance documents to BKPM.
4. Prepare periodic updates, including tax and employment reporting, to maintain your company’s good standing.

For foreign investors, choosing between a PT PMA and local PT isn’t just about ownership, it’s about strategic alignment with your long-term business goals, industry regulations, and expansion plans.

Land, Property & Zoning — Real Risks and Legal Workarounds

For any foreign investor, navigating Indonesia’s complex land ownership framework is one of the most important, and riskiest steps. In this Investor’s Guide in Bali and Lombok, understanding the different land titles and their limitations can protect your investment from costly legal disputes.

Indonesia recognizes several forms of land ownership:

• Hak Milik (Freehold Right), available only to Indonesian citizens.
• Hak Pakai (Right to Use), available for foreign individuals or entities, usually for up to 30 years, renewable.
• Hak Sewa (Leasehold), a practical and common approach for foreign investors, especially in Bali’s tourism zones.
• Hak Guna Bangunan (Right to Build), allows construction on leased land, typically used by PT PMA companies.

In this Investor’s Guide in Bali and Lombok, lease agreements are often structured under Hak Sewa or Hak Guna Bangunan, but investors must remain cautious about nominee arrangements, where land is held under a local’s name. Though common in practice, these structures pose legal risks if not properly documented or notarized.

Recent Bali Provincial Regulations, particularly those tied to land zoning and tourist levies (Peraturan Daerah Provinsi Bali No. 6/2023), reinforce the importance of compliance with spatial and environmental zoning rules (RTRW). Non-compliance has led to several high-profile business closures, showing how serious authorities are about sustainable land use.

Before signing any agreement, investors should conduct full due diligence, including:

• Title verification through BPN (National Land Agency) records.
• Land mapping and zoning confirmation.
• Notary validation of contracts.
• Social and environmental risk assessments to prevent future disputes.

A proactive legal review can save investors from long-term issues. This Investor’s Guide in Bali and Lombok emphasizes that legal due diligence isn’t an optional step, it’s your insurance against uncertainty in Indonesia’s fast-growing property market.

Licensing & Permits: OSS, NIB, TDUP (for Tourism), IMB, and Local Approvals

One of the most critical parts of this Investor’s Guide in Bali and Lombok is understanding Indonesia’s layered licensing ecosystem. The country has significantly simplified its business registration through the Online Single Submission Risk-Based Approach (OSS RBA) system, designed to align licensing with risk classification and business activity codes (KBLI).

The process starts with securing a Nomor Induk Berusaha (NIB), your official business identification number through the OSS portal. The NIB functions as both your company ID and import/export license, and is accompanied by a Standard Certificate if your sector requires operational compliance. For those entering hospitality and tourism, a TDUP (Tanda Daftar Usaha Pariwisata) is mandatory, authorizing operations such as hotels, beach clubs, and tour agencies.

In addition, investors must handle construction and operational permits:

• IMB (Building Permit) or its updated version, PBG (Persetujuan Bangunan Gedung), needed before construction.
• SLF (Certificate of Building Worthiness), required before commercial operation.
• Environmental permits (AMDAL/UKL-UPL), depending on project scale.

However, this Investor’s Guide in Bali and Lombok notes that actual implementation can differ across regencies. For example, Lombok Tengah may apply stricter coastal zoning rules near Mandalika SEZ, while Badung Regency (covering Seminyak, Canggu, and Uluwatu) enforces additional hospitality levies and signage approvals through the Dinas Pariwisata (Tourism Office). These variations often surprise new investors and can delay project timelines if not managed early.

Here’s a simplified licensing checklist for common industries:

• Hospitality (Hotels, Villas): NIB, TDUP, PBG/SLF, Environmental Permits, Fire Safety Certificate, Regional Business Tax ID.
• F&B / Beach Clubs: NIB, TDUP, Alcohol Serving License, Noise Permit, Environmental and Waste Management Permit.
• Tour Operators / Travel Agencies: NIB, TDUP, Insurance Coverage, Local Office Registration, Employee Compliance.

Investors should verify requirements through the OSS RBA portal and cross-check with the Ministry of Tourism and Creative Economy (Kemenparekraf) for tourism-specific updates.

In this Investor’s Guide in Bali and Lombok, one key takeaway is that proper licensing is not just about compliance, it builds credibility with local partners, authorities, and customers, ensuring smooth business operations from day one.

Tax, Accounting & Incentives

Under the New Regulation for PT PMA, understanding Indonesia’s tax framework is more crucial than ever for maintaining compliance and optimizing corporate performance. Every foreign-owned company must be aware of key obligations such as Corporate Income Tax (CIT), Value Added Tax (VAT), and Withholding Tax (WHT), all of which directly influence operational costs and profitability.

The New Regulation for PT PMA also aligns reporting and compliance processes with the CoreTax system, a digital platform developed by the Directorate General of Taxes (DGT). CoreTax aims to streamline e-filing, payment, and audit processes, reducing manual errors while improving transparency. For multinational investors, this update reinforces the importance of transfer pricing documentation, particularly for intercompany transactions. Proper arm’s-length pricing and contemporaneous documentation are essential to avoid penalties and maintain credibility during audits.

Investors establishing businesses in special regions such as the Mandalika Special Economic Zone (SEZ) or other priority areas in Lombok can benefit from regional tax incentives under BKPM and Ministry of Finance coordination. These may include corporate income tax reductions, import duty exemptions, and accelerated depreciation schemes, among others. Companies are encouraged to consult BKPM representatives directly to verify which incentives apply to their industry, scale, and location.

In practice, smart tax planning begins with accurate bookkeeping, structured invoicing, and timely submissions. Businesses under the New Regulation for PT PMA must ensure monthly VAT reports, annual income tax filings, and financial statements are aligned to avoid administrative sanctions. Citing references such as the BKPM Investment Guide and recent CoreTax implementation summaries can provide up-to-date insights into maintaining compliant and efficient tax operations in Indonesia.

HR, Visas & Hiring Local Talent

Under the New Regulation for PT PMA, building a compliant and capable workforce in Indonesia requires a clear understanding of both immigration and manpower laws. Foreign investors must balance the hiring of local professionals with expatriate specialists, ensuring all recruitment practices align with national labor standards.

For companies employing foreign nationals, three key documents are essential: the RPTKA (Foreign Manpower Utilization Plan), the IMTA (Work Permit), and the KITAS (Limited Stay Permit). The RPTKA is approved by the Ministry of Manpower and outlines positions eligible for foreign workers, while the IMTA and KITAS are issued by the Directorate General of Immigration, granting legal authorization to live and work in Indonesia. The New Regulation for PT PMA streamlines these permits through the Online Single Submission (OSS) system, allowing investors to manage visa and employment compliance more efficiently.

At the same time, the regulation emphasizes the importance of local talent development. PT PMA entities are encouraged to prioritize Indonesian nationals whenever possible and to implement knowledge transfer programs that enhance domestic workforce capabilities. Employers must also register employees under BPJS Ketenagakerjaan (employment benefits) and BPJS Kesehatan (healthcare insurance), ensuring compliance with Indonesia’s social security obligations.

Salary benchmarks vary by region and role, but in areas like Bali and Lombok, the hospitality, legal, and professional services sectors generally offer competitive packages aligned with regional minimum wages and local market expectations.

Beyond compliance, success in Indonesia’s labor market depends on understanding cultural fit and onboarding practices. Respect for hierarchy, teamwork, and open communication can greatly improve retention and workplace harmony.

With insights from the Directorate General of Immigration, the Ministry of Manpower, and local HR trend reports, foreign companies can establish HR strategies that are both compliant and culturally aligned. Supported by the New Regulation for PT PMA, this integrated approach allows businesses to attract top talent, maintain regulatory integrity, and build sustainable operations in Indonesia.

Sector Spotlight — Hospitality, Real Estate, and Creative Tourism

Indonesia’s hospitality and real estate sectors continue to attract strong foreign investor interest, particularly in Bali, Lombok, and Sumbawa. Under the New Regulation for PT PMA, investors in these industries are required to conduct deeper feasibility and compliance assessments before commencing operations. For beach clubs, boutique resorts, or villa management companies, validating hospitality demand and occupancy assumptions is critical. Seasonal variations, changing tourist demographics, and evolving digital booking trends must all be factored into your market entry strategy.

The New Regulation for PT PMA also emphasizes transparent licensing and ownership structures. Investors must ensure all operational permits, such as location permits, environmental approvals, and building utilization certificates (SLF) are properly aligned. For villas and hospitality properties, zoning validation and collaboration with local communities (Banjar or Desa Adat) are crucial to maintain goodwill and operational stability.

In terms of profitability, realistic ROI drivers depend on long-term sustainability rather than short-term occupancy spikes. Key pitfalls include overestimating peak season performance, neglecting community relations, or misunderstanding the tax implications of rental income and management fees. The most successful investors build resilience by integrating local partnerships and diversifying income streams, such as event hosting, wellness programs, or creative workshops.

The creative tourism movement, endorsed by the Ministry of Tourism, encourages hospitality ventures to go beyond traditional accommodation models. Blending cultural authenticity, art collaborations, and community integration not only attracts experience-driven travelers but also enhances brand reputation.

By aligning investment planning and compliance with the New Regulation for PT PMA, and drawing from local case studies and insights from Indonesia Travel, investors can unlock the full potential of Indonesia’s hospitality and creative tourism economy, sustainably and strategically.

Financing, Banking & Repatriation of Profits

Under the New Regulation for PT PMA, managing financial flows both inbound and outbound, is a core requirement for compliance and investor confidence. Every foreign-owned company in Indonesia must establish a local corporate bank account under its registered entity to process capital injections, operational expenses, and tax obligations. This ensures transparency and alignment with Bank Indonesia’s (BI) regulations on foreign exchange and capital inflows.

Foreign investors are also expected to comply with Indonesia’s foreign exchange (FX) and repatriation policies, which govern how profits can be transferred abroad. Repatriation is permitted after all corporate tax obligations are fulfilled, typically through dividends or capital returns. Proper documentation, such as audited financial statements and tax clearance letters is essential to avoid delays or penalties.

Local banking partners, particularly those experienced in servicing foreign entities, can assist PT PMA companies in handling FX conversions, import/export payments, and credit facilities. For large-scale ventures, especially in sectors like real estate, renewable energy, or infrastructure, project financing and blended finance solutions are increasingly available through development finance institutions (DFIs) and impact-oriented investors. These arrangements allow for capital structuring that balances risk and sustainability while meeting local regulatory requirements.

The New Regulation for PT PMA also reinforces transparency between investors and lenders, ensuring that all debt arrangements are reported through official channels. Understanding lender expectations, such as collateral requirements, repayment terms, and local partner guarantees can streamline financing negotiations.

According to BKPM’s guidance and Bank Indonesia’s best practices, maintaining accurate capital records, timely filings, and open communication with financial institutions is vital. Together, these measures support compliant operations and smooth repatriation of profits, allowing foreign investors to manage their Indonesian ventures with financial security and confidence.

Practical Risk Management & Community Relations

Under the New Regulation for PT PMA, risk management is no longer an afterthought, it is a legal and operational necessity for every foreign-owned business in Indonesia. Effective risk control extends beyond contracts and compliance; it involves maintaining strong relationships with local communities, ensuring environmental responsibility, and preparing for unforeseen disruptions.

For businesses operating in Bali, Lombok, and other regions, environmental and social due diligence is essential before project commencement. Investors must review land use permits, conduct impact assessments, and establish transparent communication with local councils such as the Banjar or Desa Adat. These traditional institutions play an influential role in local governance and community acceptance. Proper engagement can prevent disputes, enhance cooperation, and secure long-term stability for hospitality, real estate, and tourism ventures alike.

Insurance coverage, covering property, liability, and business interruption is equally vital. Under the New Regulation for PT PMA, companies are encouraged to implement comprehensive force majeure and contingency plans that address natural disasters, regulatory changes, or political risks. Recent examples of temporary resort closures due to compliance lapses highlight the importance of proactive planning and alignment with local authorities.

Strong community relations are not only a reputational safeguard but also a competitive advantage. When investors integrate local employment, environmental stewardship, and cultural sensitivity into their business models, they build trust and resilience that outlast short-term market fluctuations.

Drawing from local governance notes and enforcement insights reported by credible outlets such as News.com.au, one lesson stands clear: sustainable success in Indonesia requires harmony between compliance, culture, and community. Businesses that respect this balance are the ones that thrive.

Step-by-Step Launch Checklist

Launching a business in Indonesia requires careful coordination across legal, operational, and cultural dimensions. To help investors stay organized, here’s a 10-point checklist that simplifies your path from idea to operation—aligned with the New Regulation for PT PMA and current government expectations.

1. Conduct Pre-Feasibility Studies – Evaluate market demand, competition, and location viability (especially in SEZs like Mandalika or Lombok).
2. Select Business Structure – Confirm your PT PMA setup with the right share composition and capital commitment.
3. Secure Licenses & Permits – Complete OSS registration, NIB, and sector-specific approvals (BPOM, NPPBKC, or SLO).
4. Prepare Corporate Documents – Draft Articles of Association, obtain a notarial deed, and register through BKPM.
5. Arrange Tax & Accounting Systems – Register for NPWP, configure e-Faktur, and integrate with CoreTax for compliance.
6. Open a Corporate Bank Account – Choose a trusted local banking partner and comply with BI and OJK regulations.
7. Recruit Local & Expat Staff – Finalize RPTKA, IMTA, and KITAS, ensuring BPJS enrollment and local labor alignment.
8. Finalize Office or Property Lease – Ensure land legality and proper zoning under local ATR/BPN regulations.
9. Implement Risk & Insurance Plans – Secure liability, health, and asset insurance before operational launch.
10. Community Engagement & Opening Day – Communicate with local authorities and traditional councils to ensure smooth operations and community support.

This checklist helps foreign investors minimize oversights, stay compliant, and launch confidently, ensuring your new venture in Indonesia begins on a strong, sustainable foundation.