Lombok, one of Indonesia’s top tourism destinations, has become increasingly attractive to foreign investors seeking to enter the tourism, property, and lifestyle sectors. However, many of these investors face challenges—or even failure—due to a lack of understanding of the local context, culture, and regulatory environment. A frequent root cause of these issues is the mistaken assumption that doing business follows the same rules everywhere.

Indonesian Regulations for Those of Their Home Country.

One of the most fundamental errors is assuming that Indonesia’s legal and licensing systems operate similarly to those in the investor’s home country. In reality, Indonesia has a unique legal and bureaucratic framework, including the Risk-Based Online Single Submission (OSS-RBA) system, the Indonesian Standard Classification of Business Fields (KBLI), and a range of additional licenses required depending on the business’s risk level and location. Ignoring or misunderstanding these processes often results in costly delays, administrative sanctions, or even revocation of business licenses.

Overlooking Legal Procedures in Company Establishment.

Some foreign investors rush into business operations without first ensuring they have fulfilled all legal requirements—from forming a legal entity and securing licenses to complying with environmental and spatial regulations. Skipping these steps can lead to significant legal issues down the line, potentially disrupting operations or forcing business closure.

Neglecting the Role of Local Communities.

Foreign investors who fail to engage with local communities often face social resistance. In Lombok, local residents play a critical role—not just as a labor force, but as cultural stakeholders and guardians of social stability. Excluding local communities from your business operations—whether as employees, partners, or beneficiaries—can lead to emotional distance and social conflict that ultimately undermines the sustainability of the enterprise.

Disrespecting Local Wisdom and Cultural Values.

Lombok is more than a picturesque island—it is home to a deeply rooted cultural identity, complete with local customs, belief systems, and social structures that must be respected. Some investors inadvertently commit cultural transgressions, such as building in sacred areas or conducting business activities that clash with local norms. These actions not only provoke community backlash but can also trigger legal action from local authorities.

Underestimating Environmental and Spatial Licensing Requirements.

Businesses located near coastlines, in the mountains, or on conservation land often require additional permits such as Environmental Impact Assessments (AMDAL), Location Permits, and Spatial Utilization Licenses. Neglecting these requirements is not only a legal risk but can also harm local ecosystems and spark conflicts with environmentally conscious communities.

Failing to Build Trust with the Community.

Long-term business success in areas like Lombok heavily depends on local community acceptance and trust. Many foreign investors underestimate the importance of open communication, social contribution, and mutually beneficial partnerships. In reality, a business that fosters strong community relationships is more likely to thrive and enjoy broad local support.

The Solution: The Strategic Role of Legal, Business Management, and Licensing Consultants.

Given the regulatory complexity and social dynamics of investing in Lombok, engaging experienced legal, business management, and licensing consultants is not just helpful—it is a strategic necessity. A professional consultant who understands Indonesian law, OSS-RBA procedures, and local permit systems can help investors avoid bureaucratic pitfalls and legal setbacks that may obstruct business operations.
Moreover, seasoned consultants often possess deep insight into local culture and social structures, enabling them to guide investors in adopting culturally respectful approaches and building harmonious relationships with local communities. With the right guidance, the licensing process becomes faster and more efficient, the risk of social conflict is reduced, and the business is better positioned for sustainable growth.