Buying an established Lombok business can save time, but its bookings, staff and reputation may sit alongside tax exposure, a weak lease, missing licences or obligations not shown in the sales brochure. Before paying, identify exactly what is being acquired, which liabilities remain and whether operations can continue lawfully after completion.
Are you buying the company or buying the business?
An acquisition can be structured as a share purchase, an asset purchase, a lease acquisition or a combined property-and-business transaction. The label does not decide the outcome; the documents and legal position do.
| Issue | Share purchase | Asset purchase |
|---|---|---|
| Operator | Existing company continues | Buyer or a new PT PMA operates |
| Historical liabilities | Remain in the company | More selective, but still investigate |
| Licences | Check continuity and change requirements | Separate approvals may be needed |
| Employees | Same employer generally continues | Review employer transfer or replacement arrangements |
| Contracts and lease | Check change-of-control terms | Check assignment and consent |
| Due diligence | Broad company review | Substantial asset and operational review |
A share acquisition transfers ownership of the legal entity, whose history, assets, contracts, employees, licences, debts and tax exposure generally stay within it. An asset acquisition may narrow what the buyer takes, but licences, contracts, employees and lease rights do not automatically move as a package.
Start with the legal entity
Obtain the establishment deed, amendments, Ministry approvals or acknowledgements, shareholder register, director and commissioner records, capital records, registered address, tax registration, NIB and OSS profile. Confirm the beneficial owner against the real ownership chain; a filed declaration is not a substitute for verifying control.
Compare registered activities with the actual business. A company marketed as villa management may also sell accommodation, tours, transport or food and beverage services.
For a share transfer, confirm the transfer instrument, shareholder-register update, Ministry notification and any restrictions in the articles. A controlling acquisition can also involve notarial formalities, employee and public announcements, corporate approvals and creditor protections.
Can a foreign investor own this business?
Check every actual activity against current investment rules, sector restrictions, reserved activities and the relevant KBLI classification. Introducing foreign ownership into an Indonesian PT commonly requires a PMA conversion and corresponding capital, OSS and licensing updates.
Under Investment/BKPM Regulation 5/2025, the general minimum issued and paid-up capital is IDR 2.5 billion per PT unless another rule applies. The general investment threshold is more than IDR 10 billion per five-digit KBLI per project location, excluding land and buildings, but important exceptions apply. Accommodation calculations include land and buildings, while food-and-beverage activities use different aggregation rules.
Review LKPM reports, realised investment, outstanding commitments and capital evidence. The asking price is not proof that the business is compliant. A purchase from another foreigner still needs formal checks; a purchase from an Indonesian seller may require a conversion, a new PMA or a lawful joint venture. Nominee arrangements designed to bypass restrictions are prohibited.
Check KBLI, licences and the actual operator
Compare five things: registered activities, actual operations, advertising, invoices and permissions. Under the risk-based licensing framework, review the NIB, risk classification, Standard Certificates and their verification status, sector licences, supporting approvals and expiry dates.
A guesthouse that provides meals, scooter rental, airport transfers and tours may need each activity assessed separately. Establish whether the company supplies a service itself or uses a licensed third party.
Map each approval to the company, operator, activity, building and location. Then confirm what a share transfer, management change, change in activity or location change requires.
Tax problems, earnings and hidden debt
In a share deal, tax liabilities remain with the company and affect the investment even where personal liability is a different question. Request annual corporate returns, monthly filings, payment receipts, withholding records, payroll tax, rental-related tax, VAT registrations and reporting where applicable. Check audits, assessments, arrears, penalties and disputes.
Reconcile tax filings with financial statements, bank deposits, booking-platform statements, POS reports, invoices and actual sales. Do not price unexplained revenue as verified income.
Review shareholder loans separately
The company may owe money to the seller, directors, affiliates, suppliers, banks or the landlord beyond the advertised price. Record whether each balance remains, is repaid, is waived or reduces the price. A promise to settle it later leaves the economics unresolved.
Test gross margin, net profit, seasonality, receivables, payables, deposits, advance bookings, inventory, fixed assets, related-party transactions, guarantees, pledged assets and security interests. Search for employee, shareholder, supplier, tax, land and landlord disputes.
Check the property and lease separately
Identify the landowner, building owner, titleholder and lessee. They may not be the same person. Verify title, company-held rights, remaining validity, encumbrances, boundaries, legal access, zoning, commercial use, environmental requirements, PBG building approval and SLF fitness certification.
Acquiring the operating company does not cure a defective property arrangement. A share purchase does not automatically transfer a personally held lease into the company.
Do not buy a business without reading the lease
Check remaining years, renewal rights and pricing, rent increases, assignment, subletting, commercial use, construction rights, repairs, deposits, landlord termination rights and ownership of improvements at expiry. Read change-of-control provisions: landlord consent can be necessary even where the company remains the tenant.
A profitable guesthouse with only four lease years remaining and no agreed renewal price may be worth much less than its current earnings imply.
Employees and foreign management
Obtain the employee list, contracts, salaries, service dates, BPJS registrations and contributions, THR payments, leave balances, overtime records, disciplinary matters and disputes. Identify undocumented employment and calculate accrued obligations and potential termination costs before agreeing the value.
A transaction does not automatically erase service history. Continued employment, changes of employer and termination require review under applicable employment rules.
For foreign personnel, verify immigration status, authorised roles, expiry dates, RPTKA approval or an applicable exemption, and foreign-worker compensation obligations. Buying shares does not appoint a buyer as director, grant Investor ITAS or authorise unrestricted work; corporate appointment and immigration/work requirements are separate questions.
Contracts, digital assets and reputation
Review supplier, management, franchise, tour, client, loan, vehicle-lease, software and insurance agreements for assignment, change-of-control, renewal, termination, penalties and guarantees.
For digital handover, verify ownership and permitted transfer of the domain, website, email, phone numbers, social accounts, Google Business Profile, reservation system, photographs and customer database. Assess the lawful basis for data transfer before copying guest or customer records.
Airbnb says account ownership cannot be transferred between hosts. Booking.com terms discuss ownership changes, while published review guidelines allow reviews to stop displaying after a change. Confirm the relevant contract and handover process directly; do not promise that listings, ratings or reviews will transfer.
Inspect trademarks, logos and copyrighted material separately. A registered company name is not the same as trademark protection, and buying a villa business does not necessarily buy its online reputation.
Inspect assets and test the asking price
Inspect furniture, kitchen equipment, vehicles, boats, compressors, dive equipment, generators, air conditioners, pool systems and other machinery relevant to the operation. Match inventory and serial numbers to ownership evidence, maintenance records, financing and security releases.
Some displayed assets may belong to staff, suppliers or another company. Value should reflect verified earnings, lease duration, property rights, licences, staff obligations, condition of equipment, customer relationships, contracts, debts and tax exposure. Reserve working capital and replacement costs after completion.
Four Lombok acquisition examples
Three villas in Kuta
A PT PMA operates the villas, but the seller holds the land lease personally. Buying the shares does not buy that lease; establish enforceable occupancy rights and any landlord-approved assignment.
A Senggigi restaurant
An Indonesian PT owns the restaurant. Test foreign-investment eligibility and PMA conversion requirements, then review employees, tax history, lease consent and restaurant licences.
A Gili Trawangan dive centre
Verify equipment and boat ownership, instructor arrangements, lease rights, licences, customer deposits and future refund commitments.
Assets into a new PT PMA
A buyer acquires brand and equipment rather than the seller’s company. Licences, contracts, employees, customer obligations and operating rights still need separate arrangements before opening.
Red flags that should slow the deal down
- Company documents are withheld or key agreements are only verbal.
- Cash sales cannot be verified or tax returns conflict with banking records.
- Licences are described as “in process” without evidence, or KBLI does not match operations.
- Required landlord consent is missing or access depends on informal permission.
- Employment records, contracts or BPJS evidence are missing.
- Shareholder loans, guarantees or security interests are undocumented.
- The seller demands a large non-refundable deposit before review.
- Someone says legal checks are unnecessary because “everyone does it in Lombok.”
These issues warrant questions and evidence; they do not automatically prove dishonesty. They do, however, affect timing, conditions and value.
A safer order for buying an existing business
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Define what is for sale
List the company, assets, contracts, property rights, brand and liabilities included or excluded.
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Compare the available structures
Test share, asset and lease arrangements before treating a seller’s preferred structure as the only option.
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Confirm foreign-investment eligibility
Check each actual activity, ownership structure and PMA requirement.
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Conduct due diligence
Review legal, tax, financial, employment, property, licensing and commercial records.
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Allocate risk in the deal documents
Agree price, liability treatment, corrections, approvals, conditions and deposit-release arrangements before completion.
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Update records after completion
Complete company, OSS, tax, banking, operational and immigration/work updates, then review unresolved obligations.
| Area | Documents and evidence |
|---|---|
| Company | Deed, amendments, owners, directors, capital, NIB and KBLI |
| Licensing | OSS profile, certificates, sector licences, verification and site approvals |
| Financial and tax | Accounts, bank records, debts, shareholder loans, returns, payments and disputes |
| Property | Title, lease, access, zoning, building approvals and landlord consents |
| People and commercial | Employment records, BPJS, customer and supplier contracts, digital assets and IP |
Frequently asked questions
Can a foreigner buy an existing business in Indonesia?
Yes, where the actual activities and proposed investment structure satisfy applicable foreign-investment rules.
Can I buy shares in an Indonesian PT?
Potentially. Introducing foreign ownership commonly requires PMA status and corresponding corporate, capital, OSS and licensing changes.
Are assets safer than shares when buying a business?
Neither is always safer. Assets can narrow exposure, but they can make operating continuity, licences, contracts and employees more complicated.
Do I inherit company tax debts in a share purchase?
Tax debts remain with the company and affect your investment. Whether you have personal liability is a separate legal question.
Does buying shares automatically provide an Investor ITAS?
No. Investor ITAS eligibility, application and permitted activities require a separate immigration assessment.
Sources
- Company Law 40/2007: corporate liability, share transfers and acquisitions
- AHU: beneficial ownership verification and supervision
- Presidential Regulation 49/2021 on investment business fields
- Investment/BKPM Regulation 5/2025
- Investment Law 25/2007
- Government Regulation 28/2025 on risk-based licensing
- DJP: corporate financial reporting and bookkeeping
- Government Regulation 18/2021 on land rights and registration
- Ministry of Public Works: building approvals and SIMBG
- Government Regulation 35/2021 on employment and termination
- Government Regulation 34/2021 on foreign workers
- Directorate General of Immigration: E28A investor classification
- Airbnb: account transfer guidance
- Booking.com: published accommodation terms