Indonesia Is Not Only Bali: Lombok and Jakarta for a New Business
When it comes to starting a business in Indonesia, the default choice is Bali. Yet the most notable developments this year are happening in two other places: Lombok and Jakarta. Let us look at what has appeared there, which incentives are available, and why the choice of region has become a practical question rather than a matter of preference.
Lombok: The Mandalika Special Economic Zone
In Central Lombok, 20 minutes from the international airport, the Mandalika Special Economic Zone is up and running. Projects that enter the zone and meet its criteria have access to:
a tax holiday on the main line of business, followed by a reduced rate after the incentive period;
a deduction from the taxable base based on the investment amount, accelerated depreciation, and separate terms on dividend tax for foreign investors;
one-stop permit processing and a simplified procedure for foreign workers;
land rights with a possible use period of up to 80 years.
Which Sites Are Available
The available sites are offered as large clusters:
Golf Resort Community — 298 hectares;
Tanjung Aan, intended for international-class hotels — 146 hectares;
Eastern Adventure District — around 164 hectares.
Beyond hotels, the range covers glamping, themed restaurants, agritourism, spa and wellness, and tourist villages.
In essence, Lombok today offers the same tourism industry as Bali, but with fiscal incentives and available land.
Jakarta: Indonesia's International Financial Center
In July 2026, Parliament passed the law on the Indonesia International Financial Center. What it gives participants:
a corporate income tax incentive for up to 50 years;
exemptions from VAT and luxury goods tax;
a dedicated court with exclusive jurisdiction, along with arbitration;
a Golden Visa for major investors.
The center's operating site is being set up in Jakarta: the building is already prepared, and for the next 2 to 3 years the center will run from there. The government plans to build a permanent site in Bali later on, but that is a horizon of several years, and the implementing regulations are still being drafted.
Beyond the financial center, Jakarta remains the country's largest market, and no province-level restrictions on business activities for foreign companies have been announced there.
Why the Choice of Region Matters Right Now
As of this year, access to the OSS system in Bali is closed to companies with foreign participation across 18 lines of business. Among them are small hotels and rental accommodation, cafés, real estate, car and motorcycle rental, retail trade, and management consulting.
The restriction applies only to new applications: permits already issued are not revoked, and existing companies continue to operate and file LKPM reports.
So if a project is new and falls on that list, the question is not whether to drop the idea but which region to carry it out in. One point matters here: this is about genuinely relocating the project, not about registering it "on paper." Oversight of foreign companies using virtual offices has been tightened.
Get in Touch with Legal Indonesia
The choice of region affects more than taxes. It also determines whether your application clears OSS and which obligations the company takes on once registered. We work through a project on its merits: whether your line of business falls under the restrictions, which zone or program conditions apply to your case, what will need to be substantiated, and how to build a structure that works in practice and not only on paper.
Considering where to register your project in Indonesia, or already facing an OSS refusal in Bali? Contact us: we will look at your situation and propose workable options.
Director of Legal Indonesia
Patrecia Christy
