Indonesia’s tourism industry continues to be a key driver of economic growth, attracting significant foreign investment. In 2024, the country welcomed approximately 13.9 million international visitors, reflecting a strong recovery and expansion from previous years.
Bali remained the dominant destination, drawing 6.3 million tourists, while adventure tourism in Komodo Island and Raja Ampat experienced notable growth. Eco-tourism also flourished, with a rise in demand for sustainable travel experiences. By mid-2024, tourism revenue reached approximately USD 7.46 billion, with further increases projected by year-end.
As such, Indonesia’s tourism sector presents vast opportunities for foreign investors, but entering the market requires a clear understanding of business licensing, ownership regulations, and operational compliance. With a well-defined investment strategy and adherence to regulatory framework, investors can tap into one of the most dynamic and rapidly growing tourism industries in the world.
Regulatory Landscape for Foreign Tourism Investments
Foreign investors must comply with the licensing requirements managed by the Ministry of Tourism and Creative Economy and the Indonesia Investment Coordinating Board (BKPM). In recent years, the introduction of the Risk-Based Business Licensing (OSS-RBA) system has streamlined the approval process, making it more accessible for foreign businesses.
Investment regulations vary depending on the type of tourism business. The Positive Investment List outlines the permitted levels of foreign ownership:
- Hotels and resorts: Up to 100% foreign ownership
- Travel agencies and tour operators: Up to 100% foreign ownership
- Restaurants and cafes: Up to 100% foreign ownership
- Adventure and ecotourism businesses: Open to 100% foreign investment
Tourism Business Licenses and Registration Requirements
To legally operate a tourism business in Indonesia, foreign investors must obtain the following key licenses:
Tourism Business Registration License (Tanda Daftar Usaha Pariwisata – TDUP)
This primary license is mandatory for all tourism-related enterprises, including accommodations, travel agencies, and tour operators. The TDUP ensures compliance with industry standards and government regulations.
Tourism Business Certificate (Sertifikat Usaha Pariwisata)
This operational certificate certifies that a tourism business meets Indonesia’s required service, safety, and operational standards. It is essential for obtaining final approval to commence business activities.
Both licenses fall under the OSS-RBA framework, designed to simplify registration and approvals for domestic and foreign investors.
Key Steps in Obtaining a Tourism Business License
Step 1: Develop a Business Concept and Conduct a Feasibility Study
Foreign investors must begin by defining their tourism business model, identifying their target market, and preparing a financial feasibility study. This document will help in securing regulatory approvals and attracting potential investors.
Step 2: Register a Foreign-Owned Company
The business must be established as a PT PMA (foreign-owned investment company). This process involves obtaining a Deed of Establishment, registering with the Ministry of Law and Human Rights, and securing a Business Identification Number (NIB) through the OSS-RBA system.
Step 3: Fulfill Capital and Investment Requirements
Investors must ensure they meet Indonesia’s minimum capital investment thresholds, which vary depending on the type of tourism business. Proof of financial capability is required to move forward in the licensing process.
Step 4: Prepare and Submit Licensing Documents
Applicants must compile the necessary documentation, including corporate registration papers, business feasibility studies, technical and operational proposals, and translated legal identification documents. These must be submitted through the OSS-RBA platform.
Step 5: Obtain Tourism Business Registration License (TDUP)
This essential license certifies the business as an approved tourism enterprise. The TDUP application is reviewed by relevant regulatory bodies to ensure compliance with industry standards.
Step 6: Secure the Tourism Business Certificate (Sertifikat Usaha Pariwisata)
Once the TDUP is approved, businesses must apply for a Tourism Business Certificate, which verifies adherence to Indonesia’s operational and service quality requirements.
Step 7: Final Processing and Approval
The licensing process typically takes between 14 and 60 days, depending on the business type and location. Authorities may request additional documentation or site inspections before final approval is granted.
Step 8: Start Operations and Maintain Compliance
After obtaining the necessary licenses, businesses can officially begin operations.
Financial and Investment Considerations for Tourism Businesses
Investment and capital requirements differ by sector, with hotels and resorts requiring a significantly higher minimum capital threshold compared to travel agencies or restaurants. Investors must also consider tax obligations, including corporate income tax and tourism-related VAT. Additionally, repatriation of profits is permitted but subject to specific financial reporting requirements.
Location and Operational Factors Impacting Business Success
Regulations governing zoning, land use, and environmental impact assessments play a critical role in determining where tourism businesses can operate. Certain locations, such as Bali, Lombok, and Labuan Bajo, offer regional investment incentives to attract tourism-related businesses.
Additionally, businesses must adhere to local workforce regulations, including the employment of Indonesian staff and compliance with labor laws.
Compliance and Ongoing Regulatory Obligations
After obtaining a tourism business license, companies must maintain compliance through annual reporting, tax filings, and license renewals. Government inspections ensure adherence to service quality, safety, and financial transparency. Non-compliance can result in penalties, suspension of operations, or revocation of licenses.
Work With MAP Resources Indonesia
Our consultants at MAP Resources Indonesia provide expert guidance on licensing, compliance, and operational strategies, ensuring a seamless entry into Indonesia’s dynamic tourism market. Contact us today at info@mapresourcesindonesia.com to explore how we can support your investment journey.
