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Business Permits & Incorporation for Foreigners in Lombok

Good to know

Good to Know

  • Indonesia cut the minimum paid-up capital for a foreign-owned company (PT PMA) by 75% — from IDR 10 billion to IDR 2.5 billion — effective October 2, 2025, making incorporation meaningfully cheaper than older articles suggest; double-check any advisor quote is using the post-October-2025 figures.
  • The IDR 2.5 billion you deposit is separate from the IDR 10 billion 'total investment plan' you declare per business activity (KBLI code) — the second figure is a forward-looking commitment tracked via quarterly reports, not cash you hand over upfront.
  • Lombok's Mandalika Special Economic Zone may offer reduced or waived capital thresholds for qualifying businesses located inside the zone — worth checking directly with BKPM/OSS if your planned business site falls within Mandalika.
  • Using a local nominee to get around foreign-ownership or capital rules is illegal and the arrangement itself is legally void — it will not protect you and can expose both sides to criminal liability.
  • The whole registration process (notary deed, tax ID, NIB) can be done remotely via Power of Attorney without needing to fly to Indonesia, though opening the actual corporate bank account and depositing capital typically still requires local coordination.
  • There is no legal path for a foreigner to freelance or run a sole proprietorship in Indonesia under their own name — any paid work delivered to Indonesian or foreign clients while based in Lombok technically requires either a PT PMA or a compliant employment/remote-work visa arrangement, not just a tourist or social visa.
  • The PT PMA route is a serious commitment, not a lightweight freelancer registration: it requires a substantial capital plan (around IDR 10 billion, roughly USD 550,000, though only a fraction needs to be paid up front) and ongoing monthly/annual tax filings even before the business turns a profit.
  • As of 2026, small PT PMAs no longer get access to Indonesia's simplified 0.5% small-business tax rate — they are taxed under the full standard corporate system from their very first year, which raises the compliance bar for small nomad-run ventures.
  • Using a local nominee to avoid forming a company is common but legally precarious in practice — the arrangement is not reliably enforceable, so it's worth getting a licensed notary/tax consultant's advice before assuming it's a safe shortcut.

Corporate Income Tax

Standard Rate
22 percent flat on net taxable income, applying equally to PT PMA (foreign-owned) and domestically owned PT companies alike — Indonesia does not charge foreign-owned companies a different headline corporate rate.
Listed Company Reduced Rate
A company (including a foreign-owned one) that meets stock-exchange listing conditions — at least 40% of shares publicly traded and at least 300 shareholders each holding under 5% — can qualify for a reduced 19% rate; not realistic for a small nomad-run business.
Small Business 0.5 Percent Scheme Now Excluded
Under new 2026 regulation (PP No. 20/2026), the simplified 0.5% final tax scheme for small businesses under IDR 4.8 billion turnover is no longer available to PT PMA or regular multi-shareholder PT structures — they must file under the standard corporate tax system from day one regardless of how small the business is.
Basis
Tax is charged on net taxable income (revenue minus allowable deductible expenses), not on gross turnover, and a PT PMA is taxed on its worldwide income as an Indonesian tax resident from the day it is incorporated.
Small Company Partial Relief
Companies with annual revenue below IDR 50 billion may still benefit from a reduced effective rate (starting around 11 percent) on a portion of taxable income under Article 31E, depending on profit margins and overall tax position.

Amounts Reference

Article 31e Revenue Ceiling
IDR 50,000,000,000
Small Business VAT Registration Threshold
IDR 4,800,000,000

Structure Options For Foreigners

PT Pma Foreign Owned Company

Summary
The PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the only formal legal vehicle through which a foreigner can own and operate a business in Indonesia, sign contracts, invoice clients, hire staff, hold a company bank account, and hold registered land rights (HGB/Hak Pakai) rather than freehold.
Legal Status
Fully legal and regulated
Ownership Threshold
Any company with even a small percentage of foreign share ownership is classified as a PT PMA and is regulated under the foreign-investment framework, not the domestic company rules.
Typical Use In Lombok
Foreign investors in Lombok most commonly use a PT PMA to hold land via HGB (Right-to-Build) for tourism, villa/hospitality, and property-development projects, since freehold (Hak Milik) is reserved for Indonesian citizens.
Structural Requirements
At least two shareholders, one resident director, and one commissioner; the business must fall under a KBLI classification open to the intended level of foreign ownership (some sectors are 100% open, others capped or closed under Indonesia's investment negative/positive list).
Lombok Specific Minimum Capital
IDR 10,500,000,000

Minimum Capital

Minimum Paid Up Capital
IDR 2,500,000,000
Authorized Investment Plan
IDR 10,000,000,000
Note Lombok Specific Figure
One Lombok-based company-formation firm cites a higher minimum capital requirement specifically for setting up a PT PMA in Lombok, excluding land and building values.

Sole Proprietorship Freelancer

Summary
Foreigners cannot legally register or operate as a sole proprietor/freelancer under their own name in Indonesia (no personal CV, UD, or informal business registration route exists for a non-citizen). Foreigners doing commercial work — freelance consulting, e-commerce, cafés, villa rental, etc. — without a proper company are operating outside the law, regardless of the business's size.
Legal Status
illegal
Common Workaround And Risk
Some foreigners use a local nominee (an Indonesian who registers the business or land in their own name) to avoid setting up a PT PMA. This is a legal gray zone: nominee agreements are largely unenforceable in Indonesian courts, the nominee can legally claim ownership if the relationship breaks down, and the arrangement can expose the foreigner to immigration or tax-authority scrutiny.

Local Partnership Minority Route

Summary
Some foreign entrepreneurs partner with an Indonesian citizen who is the legal owner of a standard local PT, with the foreigner acting as manager or minority shareholder under a private profit-sharing agreement. This is cheaper and faster than a PT PMA (no large capital requirement, registration in weeks rather than months) but leaves the foreigner without direct legal ownership or control, dependent entirely on the trustworthiness of the local partner and the enforceability of the private agreement.
Legal Status
Decriminalized or tolerated

Other Recurring Tax Obligations

VAT Ppn
Once gross turnover exceeds IDR 4.8 billion in a fiscal year, a PT PMA must register as a PKP (taxable entrepreneur) and charge/report VAT, currently at an effective 11 percent rate on non-luxury goods and services; a company below the threshold may register voluntarily to credit input VAT on startup costs.
Other Taxes
Land and Building Tax (PBB) applies if the PT PMA owns land/buildings, and Documentary Stamp Duty (Bea Meterai) applies to contracts and official documents.
Annual Filing
The annual corporate income tax return must be filed by the end of the fourth month after the fiscal year closes (April 30 for a calendar-year filer).
Withholding Taxes
Monthly withholding obligations apply on employee salaries (PPh 21), payments to other domestic taxpayers (PPh 23), and payments to foreign parties such as dividends, interest, royalties, or management fees sent abroad (PPh 26, default 20 percent, sometimes reduced by a tax treaty).
Monthly Installments
Corporate tax is typically pre-paid through monthly PPh 25 installments, reconciled against actual liability at year-end.
Self Assessment System
Indonesia operates a self-assessment tax system — the company itself calculates, pays, and reports its own tax liabilities each period, with the tax office able to issue an assessment or collection notice after an audit if filings are wrong or late.
Reporting To Investment Board
Separately from tax filings, a PT PMA must submit a quarterly investment activity report (LKPM) to the OSS/investment board regardless of profitability.

Incorporation Process And Requirements

Vehicle
PT PMA (Perseroan Terbatas Penanaman Modal Asing) — the only entity type through which a foreigner can directly hold equity, sign as director, and generate revenue in Indonesia. A foreign individual cannot legally hold shares in a plain local PT (PMDN).
Overview
Lombok falls under Indonesia's national investment and company law framework — there is no separate Lombok-specific incorporation regime. A foreigner wanting to own and operate a business (rather than just visit) must set up a PT PMA (Penanaman Modal Asing), the foreign-investment limited liability company structure, registered nationally through the Online Single Submission (OSS-RBA) system run by the Ministry of Investment/BKPM.
Mandalika Sez Note
Lombok hosts the Mandalika Special Economic Zone (KEK). Businesses registering activities inside a KEK such as Mandalika may qualify for reduced or waived minimum capital requirements versus the standard national threshold, particularly for tech-based or tourism-linked start-ups — though the specific reduced figures are sector-dependent and should be verified directly with BKPM/OSS or the KEK management authority before relying on them.

Timeline

Regulated Or High Risk Sectors
8-12 weeks or more, due to extra ministry approvals (e.g. finance, education, food processing).
Low Medium Risk No Special License
Roughly 4-6 weeks for the core OSS registration steps once documents are ready; full operational setup including a working corporate bank account typically takes about 4-8 weeks in total.
Realistic End To End For A Fully Operational Company
Most estimates for a genuinely operational, licensed PT PMA (capital verified, bank account live) put the realistic timeline at roughly two to four months, with delays common from incomplete documentation or capital-verification backlogs.

Governing Law

  • Investment Law No. 25 of 2007
  • Company Law No. 40 of 2007
  • Job Creation (Omnibus) Law No. 11 of 2020 / No. 6 of 2023
  • BKPM (Ministry of Investment) Regulation No. 5 of 2025 — effective 2 October 2025, replacing the 2021 rules and lowering the paid-up capital threshold

Process Steps

  • 1. Select and verify KBLI business classification code(s) against the Positive Investment List to confirm foreign-ownership eligibility for your activity (villa rental, F&B, tourism, construction, etc. each has a distinct code).
  • 2. Reserve/register the company name.
  • 3. A licensed Indonesian notary drafts the Deed of Establishment (Akta Pendirian), covering shareholders, capital structure, KBLI activities, and management — this can be executed via Power of Attorney without the founder physically traveling to Indonesia.
  • 4. The Deed is submitted to the Ministry of Law and Human Rights (Kemenkumham); once approved, the SK Kemenkumham confirms legal entity status.
  • 5. Register with the local Tax Office (KPP) to obtain the Tax ID (NPWP) and SKT.
  • 6. Apply for the Business Identification Number (NIB) through the OSS-RBA system — this is the company's core operating ID and, depending on the risk classification of the activity, may include initial licensing.
  • 7. Open a corporate bank account and deposit the IDR 2.5 billion paid-up capital; the director signs a Capital Statement Letter as proof.
  • 8. For medium-high or high-risk activities, obtain any additional sector-specific licenses/approvals before commencing operations.
  • 9. Register the company with the relevant provincial/regional government to complete regional registration.

Typical Costs

Notary Fees
IDR 10,000,000

Typical range roughly IDR 5-15 million; figure shown is the midpoint.

Not Included
The IDR 2.5 billion paid-up capital deposit is a capital requirement held by the company, not a sunk 'cost' — it remains company property, just locked up for 12 months.
Government Fees
IDR 5,000,000

For standard, non-regulated sectors, direct government/PNBP fees are typically below this amount; regulated sectors with extra licensing cost more.

Ongoing Registered Office
IDR 15,000,000

A compliant registered office (virtual or physical, depending on sector/enforcement) typically runs roughly USD 500-1,500 per year; upper end of that range shown.

Professional Service Package
IDR 90,000,000

Agencies commonly quote all-in professional/consulting packages of about USD 3,000-7,000 (equivalent shown is the midpoint) covering notary coordination, OSS-RBA filing, tax registration, and bank account facilitation.

Official Registration Portals

  • https://oss.go.id/ — Indonesia's national Online Single Submission (OSS-RBA) system, the mandatory platform for NIB and business licensing
  • https://www.bkpm.go.id/ — Ministry of Investment / Investment Coordinating Board (BKPM), which oversees PT PMA policy and investment reporting (LKPM)

Minimum Shareholders And Capital

Shareholders
Minimum of 2 shareholders (can be individuals, foreign companies, or a mix; no maximum).
Paid Up Capital
IDR 2,500,000,000

Reduced from IDR 10 billion to IDR 2.5 billion effective 2 October 2025 under BKPM Regulation No. 5/2025. This capital must be deposited into the PT PMA's Indonesian corporate bank account and, per Article 27 of that regulation, cannot be withdrawn for 12 months except for legitimate asset purchase, construction, or operating costs.

Total Investment Commitment
IDR 10,000,000,000

Separate from paid-up capital: a declared investment plan of more than IDR 10 billion per KBLI business activity, per project location, excluding land and buildings. This is not deposited upfront — it is realized progressively and monitored via quarterly LKPM reports. Each additional KBLI code you register adds another IDR 10 billion to this commitment.

Local Partner Or Sponsor Requirements

Exceptions
A minority of sectors carry foreign ownership caps or require an Indonesian partner — e.g. private broadcasting is capped near 20% foreign ownership and wholesale of alcoholic beverages near 49%; a small number of defense/security-related activities are fully closed to foreign capital. The applicable cap depends entirely on the 5-digit KBLI business classification code chosen at registration.
General Rule
No blanket local-partner mandate. Since the 2021 Positive Investment List reform, most sectors (including hospitality, F&B, tourism-related services common to Lombok) allow 100% foreign ownership through a PT PMA.
Nominee Warning
Using an Indonesian nominee to disguise foreign ownership and dodge capital/ownership rules is illegal under Article 10(1) of Investment Law No. 25 of 2007; such arrangements are void in Indonesian courts and expose both parties to criminal liability.
Director Requirement
At least one director must be an Indonesia resident (this can be a foreigner holding an Investor KITAS living in Indonesia — it does not have to be an Indonesian citizen). At least one commissioner (supervisory role) is also required and may be a foreign non-resident.
AI-generated estimateData refreshed July 2026

Sources cited for this category

These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.

  1. 1.oss.go.id
  2. 2.bkpm.go.id

More About Lombok

Data last updated July 2026 · Verify anything important.