Mandalika has emerged as a compelling destination for investors. The growing region offers diverse opportunities, from large-scale enterprises to MSME Mandalika investment prospects.
Nestled within the picturesque landscapes of West Nusa Tenggara, Mandalika has become a focal point of interest in the past few years.
Not only for its natural beauty, Mandalika has an abundance of investment potential, especially when it launches the new international motorsport circuit.
Investment potential in Mandalika
Mandalika, situated in West Nusa Tenggara, offers exciting investment prospects, especially following the highly successful Pertamina Grand Prix of Indonesia.
The event occurred at the Mandalika Circuit from October 13 to 15, 2023, drawing a record-breaking attendance of 103,000 spectators.
The financial gains from the MotoGP event are anticipated to reach IDR 5.4 trillion (USD 343.5 million), a 20% increase compared to last year’s turnover of IDR 4.5 trillion.
Tourism and Creative Economy Minister Sandiaga S Uno revealed that ticket sales for MotoGP Mandalika exceeded expectations, reaching 103,000 attendees, surpassing the initial target of 100,000.
Read more: Start tourism investment in Bali and Lombok
The promising investment sectors in Mandalika
Some promising sectors for investment in Mandalika include:
1. Micro, Small, and Medium Enterprises (MSMEs)
The Pertamina Grand Prix 2023 has positively impacted income and job opportunities for local workers, thanks to the involvement of multiple small businesses.
Pertamina has supported 50 small businesses, including those from the East Lombok branch of the Pertamina House of State-Owned Enterprises (RB Pertamina), to offer souvenirs and snacks near the Mandalika circuit, showcasing the Mandalika MSME investment opportunities.
2. Property
The MotoGP event in South Lombok has lured numerous tourists and investors, significantly increasing demand for accommodations and rental properties. This situation presents a favorable opportunity for real estate investors.
Due to the increased interest and demand, property prices in South Lombok are increasing. Investing at this time has the potential for significant returns as the region keeps expanding.
3. Infrastructure development
The Indonesia Tourism Development Corporation (ITDC) has prepared the basic infrastructure in the Mandalika area ahead of the Grand Prix of Indonesia.
The development includes improvements to road access, sidewalks, public street lighting (PJU), parking areas, and utility networks like electricity, clean water, and internet.
Why invest in Mandalika?
ITDC, the governing body of the Mandalika Special Economic Zone (SEZ), continues to develop businesses in the area. As of September 2023, investments in Mandalika have reached IDR 5 trillion.
Ema Widiastuti, the Director of Development at ITDC, mentioned that the Mandalika SEZ has employed 8,100 people.
Ema explained that out of the total land area of 1,035.67 hectares owned by the Mandalika SEZ, only 30% of the land has been developed for various investment activities.
ITDC plans to expand tourism sports events in the long term by constructing a horse racing arena and a tennis court in Mandalika.
Government support and incentives
Mandalika, as one of the SEZs, presents an attractive investment prospect for global investors.
With a projected increase in tourist numbers from 2.4 million in 2018 to 12 million by 2045, Lombok Island is on track to become a top-tier tourist destination. Some of the government’s support can be seen in the below table:
| Arrangement | Mandalika (SEZ incentives) |
| Corporate Income Tax |
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| VAT and Luxury Goods Tax (PPnBM) |
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| Local Tax |
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| Immigration |
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| Labor and Employment |
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| Land Titling |
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Potential risks
Albeit Mandalika offers exciting investment potential, a business should also be aware of the potential risks, which include:
1. Economic openness
The risks pertain to market accessibility for businesses and investors looking to enter.
It encompasses the country’s receptiveness to foreign direct investment and its competitive appeal relative to regional and global destinations.
2. Government intervention
Risks arise from taxation and financial barriers imposed on foreign and local companies.
3. Legal concerns
It covers issues related to the rule of law and the threats businesses face from corruption.
It also encompasses the regulatory environment’s quality in a given market and the protection of property rights, both real and intellectual.
4. Political stability
The upcoming presidential election in February 2024 will test Indonesia’s recent political stability and the extent to which it continues liberalizing reforms.
Guide to Doing Business in Bali & Lombok
Start investing in Mandalika with InCorp Indonesia
Mandalika offers lucrative potential for investment, especially in Mandalika MSMEs investment potential, supported by the growing tourism sector and a myriad of government incentives for businesses.
InCorp Indonesia provides company registration and Investor KITAS services to help investors set up their business in the emerging global tourism hub.
Contact our expert to explore these opportunities further by clicking the button below.
Pandu Biasramadhan
Senior Consulting Manager at InCorp Indonesia
An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.
Frequently Asked Questions
- Set up a PMA (Perusahaan Modal Asing)
- Set up a RO (Representative Office)
You can transfer the license if your local distributor agrees to change the product license holder.
It all depends on your business’s purpose and nature. Our consultants will help you to clear out the matters.
Health Insurance and Social Security Insurance (BPJS) are mandatory. The company and the employee will bear a certain percentage, respectively. Another obligation is tax withholding. The percentage and type of taxes vary from case to case. Contact us to get information on your specific field.
Within the scope of foreign direct investment in Indonesia, foreign investors can typically do business in two ways:
PMA is a local subsidiary in the form of a limited liability corporation for foreign investment reasons
According to Law No. 25/2007 on Investment, foreign investors are required to establish a PMA company in order to make direct investments and conduct commercial and business activities in Indonesia. A PMA firm in Indonesia is a legally recognized business entity that can engage in various commercial and business operations as long as it complies with the current laws and regulations. As for RO, its purposes include conducting market feasibility studies and liaison activities.
