Foreign Business Setup Guide
How to Start a Hotel in Surabaya as an Australian Foreigner
Everything you need to know about licenses, company setup, and compliance requirements for Australian entrepreneurs opening a hotel in Surabaya, Indonesia.
Licenses Required
5
Est. Cost Range
$581 - $4,935
Timeline
85-182 days
Quick Answer
Yes, Australian foreigners can start a hotel in Surabaya, Indonesia. This business activity is open to foreign investment with up to 100% foreign ownership through a PT PMA (foreign-owned limited liability company).
You will need approximately 5 licenses and can expect the process to take 85-182 business days. The estimated government and service fees range from Rp 9.000.000 to Rp 76.500.000.
Foreign Ownership Rules
Foreign Ownership
Up to 100%
DNIB Status
open
Recommended Structure
PT PMA (Foreign Investment Company) (PT PMA)
As a foreign investor opening a hotel in Indonesia, you will typically establish a PT PMA (Perseroan Terbatas Penanaman Modal Asing) — a foreign-owned limited liability company. This is the standard legal entity for foreigners conducting business activities in Indonesia.
Minimum investment capital: Rp 10.000.000.000 ($645,161).
Surabaya — Local Compliance Guidance
Specific regulations, costs, and timelines that apply to businesses setting up in Surabaya.
Cost Adjustment
10% lower
Costs in Surabaya are approximately 10% lower than the national average due to local market conditions and regulatory requirements.
About Surabaya
Surabaya as East Java's capital offers streamlined processing. The local investment office is proactive with foreign investors. Lower operational costs than Jakarta or Bali. Surabaya has Indonesia's second-largest port, making it ideal for import/export businesses. The local DPMPTSP is known for relatively efficient processing.
Additional Local Requirements
These permits and requirements apply specifically in Surabaya, in addition to national requirements.
- East Java Provincial Business Registration
Restrictions & Warnings
Industrial zone businesses require Surabaya Environmental Agency clearance
Certain areas near military installations have restricted business activities
Local Investment Authority
Authority Name
DPMPTSP Kota Surabaya
Contact
dpmptsp@surabaya.go.id
The local DPMPTSP (Investment and One Stop Integrated Service) office handles regional permits alongside the national OSS system.
Required KBLI Codes
KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) codes identify your business activities in Indonesia's licensing system.
| Code | Risk Level | Foreign Ownership | DNIB Status |
|---|---|---|---|
| 55111 | medium_high | 100% | open |
Required Licenses & Permits
Licenses required to operate a hotel in Surabaya as a foreign-owned business.
Nomor Induk Berusaha(NIB)
business_id
▾
Nomor Induk Berusaha(NIB)
business_id
Estimated Cost
Free
Free through OSS system
Processing Time
1 business days
Validity
Varies
Izin Lokasi (Location Permit)
location
▾
Izin Lokasi (Location Permit)
location
Estimated Cost
Rp 1.000.000 - Rp 5.000.000
Varies by municipality, free for small plots under 25m2
Processing Time
14 business days
Validity
36 months (renewable)
Tanda Daftar Usaha Pariwisata (Tourism Business Registration)(TDUP)
sector_specific
▾
Tanda Daftar Usaha Pariwisata (Tourism Business Registration)(TDUP)
sector_specific
Estimated Cost
Rp 2.000.000 - Rp 10.000.000
Required for hotels, restaurants in tourist areas, tour operators
Processing Time
7 business days
Validity
60 months (renewable)
Persetujuan Bangunan Gedung (Building Approval)(PBG)
location
▾
Persetujuan Bangunan Gedung (Building Approval)(PBG)
location
Estimated Cost
Rp 2.000.000 - Rp 20.000.000
Based on building size and retribusi rate per m2. Higher in Jakarta/Bali.
Processing Time
30 business days
Validity
Varies
AMDAL / UKL-UPL (Environmental Impact Assessment)(AMDAL)
environmental
▾
AMDAL / UKL-UPL (Environmental Impact Assessment)(AMDAL)
environmental
Estimated Cost
Rp 5.000.000 - Rp 50.000.000
AMDAL for high risk (Rp 25-50M), UKL-UPL for medium risk (Rp 5-15M)
Processing Time
60 business days
Validity
Varies
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Step-by-Step Setup Process
The typical process for a Australian entrepreneur setting up a hotel in Surabaya (14 steps).
Prepare Documentation
~7 daysGather your passport, proof of address, apostilled documents, and prepare a comprehensive hotel business plan including room inventory, facilities, target market analysis, and financial projections.
Reserve Company Name via AHU Online
~3 daysSubmit 3 company name choices to Kemenkumham through the AHU Online system. Names must be in Bahasa Indonesia with at least 3 words.
Draft Deed of Establishment with Notary
~7 daysWork with a notary to prepare articles of association. Hotels require higher minimum investment (IDR 10 billion+) and specific KBLI codes for accommodation services.
Register with Kemenkumham
~14 daysSubmit the notarial deed for legal entity approval. Your PT PMA will be registered with accommodation-specific KBLI codes.
Obtain NIB through OSS
~1 dayRegister on OSS to get your NIB. Select KBLI code 55111 for hotel/accommodation services. Hotels are typically classified as medium-to-high risk depending on size.
Apply for Izin Lokasi (Location Permit)
~14 daysObtain location approval from local government. Hotels require specific zoning for tourism/commercial accommodation and may need larger lot size approvals.
Obtain AMDAL/UKL-UPL (Environmental Assessment)
~30 daysComplete the environmental impact assessment required for hotel construction. AMDAL is required for properties over 5 hectares or 200+ rooms; smaller properties need UKL-UPL.
Pro tip: Hotels require environmental impact assessment. AMDAL for large properties (200+ rooms or 5+ hectares), UKL-UPL for smaller. Start this early as it can delay construction permits.
Apply for PBG (Building Permit)
~30 daysApply for the Persetujuan Bangunan Gedung (PBG) through the local government. This replaces the old IMB for hotel construction or renovation. Includes structural and safety reviews.
Apply for TDUP (Tourism Business License)
~14 daysObtain the Tanda Daftar Usaha Pariwisata from the local Dinas Pariwisata. This is the primary operating license for tourism accommodation businesses in Indonesia.
Apply for Star Rating Certification
Optional~30 daysApply for the official star rating classification from the Ministry of Tourism. The rating is based on room quality, facilities, service standards, and staff qualifications.
Pro tip: Star rating from Ministry of Tourism. Required for marketing as a starred hotel. Ratings range from 1-5 stars. Higher ratings require specific facility standards.
Fire Safety Inspection & Certificate
~14 daysPass the mandatory fire safety inspection conducted by the local fire department (Dinas Pemadam Kebakaran). Required before opening to guests.
Open Corporate Bank Account
~14 daysOpen a corporate bank account at a major Indonesian bank. Hotels typically need accounts with trade finance capabilities for handling international guest payments.
Register for Tax (NPWP & PKP)
~7 daysObtain company NPWP and register as PKP. Hotels collect 11% VAT and are subject to regional Hotel Tax (Pajak Hotel) of up to 10%.
Apply for Work Permits (RPTKA/IMTA) & KITAS
~45 daysApply for RPTKA and IMTA for all foreign staff through the Ministry of Manpower. Hotels must demonstrate that foreign workers fill positions that cannot be filled by Indonesian nationals.
Estimated Total Timeline
200 days(7 months)
Based on mandatory steps processed sequentially. Actual timeline may vary depending on government processing speeds and document readiness. Some steps can run in parallel.
Estimated Costs Breakdown — Surabaya
Approximate government and service fees adjusted for Surabaya (10% below national average). Excludes ongoing operational costs.
| Item | Low Estimate (IDR) | High Estimate (IDR) | USD Approx. |
|---|---|---|---|
| Company Establishment (Notary + Legal) | Rp 13.500.000 | Rp 31.500.000 | $871 - $2,032 |
| Kemenkumham Registration | Rp 900.000 | Rp 1.800.000 | $58 - $116 |
| NIB / OSS Registration(Free (government)) | Free | Free | Free |
| Nomor Induk Berusaha (NIB)(Free through OSS system) | Free | Free | Free |
| Izin Lokasi (Location Permit)(Varies by municipality, free for small plots under 25m2) | Rp 900.000 | Rp 4.500.000 | $58 - $290 |
| Tanda Daftar Usaha Pariwisata (Tourism Business Registration) (TDUP)(Required for hotels, restaurants in tourist areas, tour operators) | Rp 1.800.000 | Rp 9.000.000 | $116 - $581 |
| Persetujuan Bangunan Gedung (Building Approval) (PBG)(Based on building size and retribusi rate per m2. Higher in Jakarta/Bali.) | Rp 1.800.000 | Rp 18.000.000 | $116 - $1,161 |
| AMDAL / UKL-UPL (Environmental Impact Assessment) (AMDAL)(AMDAL for high risk (Rp 25-50M), UKL-UPL for medium risk (Rp 5-15M)) | Rp 4.500.000 | Rp 45.000.000 | $290 - $2,903 |
| Work Permit (RPTKA + IMTA) | Rp 13.500.000 | Rp 22.500.000 | $871 - $1,452 |
| KITAS Visa | Rp 4.500.000 | Rp 10.800.000 | $290 - $697 |
| Virtual / Physical Office Address(Per year) | Rp 4.500.000 | Rp 27.000.000 | $290 - $1,742 |
| Total Estimated Range | Rp 45.900.000 | Rp 170.100.000 | $2,961 - $10,974 |
Note: Minimum investment capital for a PT PMA is Rp 10.000.000.000 ($645,161). This is separate from the setup costs above.
Visa & Work Permit Requirements
As a Australiannational, you'll need the right visa to live and work in Indonesia while running your hotel.
Recommended: Investor
KITAS Investor
- Duration: 24 months
- Estimated cost: $1,500
- Company sponsorship required
Alternative: Work Permit
KITAS Investor
- Duration: 24 months
- Min. salary: $1,200/month minimum
- RPTKA approval needed first
Australian citizens can enter Indonesia visa-free for up to 30 days or on a Visa on Arrival (VoA) for tourism. However, to work and operate a business, you must obtain the appropriate stay permit (KITAS/KITAP).
Guidance for Australian Entrepreneurs
Country-specific information for Australian nationals setting up a business in Indonesia.
Recommended Visa Pathway
Investor KITAS recommended. Australia has streamlined processing under IA-CEPA (Indonesia-Australia trade agreement). B211A for exploration phase.
Estimated processing time: 30 business days
Tax Treaty Information
Indonesia-Australia Tax Treaty (DTA) in effect since 1992. Modified by OECD Multilateral Instrument (MLI) effective 2019. Australia taxes worldwide income. Foreign Income Tax Offset available for Indonesian taxes paid.
Trade Agreements & Bilateral Benefits
IA-CEPA (Indonesia-Australia Comprehensive Economic Partnership Agreement) provides preferential market access and reduced barriers for Australian businesses.
Common Issues for Australian Nationals
IA-CEPA agreement provides preferential market access for certain sectors
Australian superannuation has no totalization with Indonesia
Bali is most popular location - competition is high
Dual taxation on rental income common issue
Document Requirements for Australian Citizens
- Documents must be apostilled (Hague Convention)
- Australian Federal Police check required for KITAS
- DFAT can authenticate documents for Indonesian use
Embassy & Consulate
Australian Embassy Jakarta: Jl. Patra Kuningan Raya Kav 1-4, Jakarta. Australian Consulate Bali: Jl. Tantular No.32, Renon, Denpasar.
Business Culture Tips
Australians are perceived positively in Bali. Direct communication style should be softened for Indonesian business culture. "Rubber time" (jam karet) means meetings may not start punctually.
Common Pitfalls & Tips
Operating on a Tourist Visa
Many foreigners try to start a business while on a tourist visa or VoA. This is illegal and can result in deportation and blacklisting. Always obtain proper business documentation first.
Using Nominee Structures Illegally
While nominee arrangements are common, undisclosed nominee structures violate Indonesian law. If foreign ownership is restricted, work with a qualified lawyer to find compliant alternatives.
Underestimating Capital Requirements
PT PMA companies have minimum investment and paid-up capital requirements. Ensure you meet these thresholds before starting the registration process for your hotel.
Ignoring Local Permits
Surabaya may have specific local permits (izin usaha) beyond national requirements. Check with the local DPMPTSP (investment office) for Surabaya-specific requirements.
Missing Tax Obligations
Indonesia has strict tax reporting requirements including monthly VAT returns, employee tax withholding (PPh 21), and annual corporate income tax. Non-compliance leads to significant penalties.
Frequently Asked Questions
Can a Australian citizen own 100% of a hotel in Surabaya?
▾
Yes, Australian nationals can own 100% of a hotel in Surabaya through a PT PMA (foreign-owned limited liability company). All 1 KBLI code required for this business type allow full foreign ownership.
What licenses do I need to start a hotel in Surabaya?
▾
You will need 5 licenses to operate a hotel in Surabaya. These include: NIB, Izin Lokasi (Location Permit), TDUP, PBG, AMDAL. All licenses are obtained through Indonesia's OSS (Online Single Submission) system and sector-specific authorities.
How much does it cost to set up a hotel in Surabaya?
▾
Based on the 5 required licenses, government and service fees for a hotel in Surabaya range from Rp 9.000.000 to Rp 76.500.000 (approximately $581 to $4,935). This excludes the minimum investment capital of Rp 10 billion required for PT PMA companies, office rental, and ongoing operational costs.
How long does it take to set up a hotel in Surabaya?
▾
The typical timeline is 85-182 business days from start to fully operational in Surabaya. This includes company registration, obtaining all 5 required licenses, and visa processing. Working with an experienced agent can help run some steps in parallel and reduce the total time.
Do I need a local partner to start a hotel in Indonesia?
▾
No, you do not need a local partner. All 1 KBLI code for a hotel allow 100% foreign ownership, so you can establish a fully foreign-owned PT PMA in Surabaya without any Indonesian shareholders.
What visa do I need as an Australian to run a business in Indonesia?
▾
You will need either an Investor KITAS (stay permit) or a Work KITAS, sponsored by your Indonesian company. Tourist visas and Visa on Arrival do not permit business activities. The Investor KITAS is typically recommended for business owners, while the Work KITAS is for employees of the company.
Can I operate my hotel from Surabaya remotely?
▾
Your PT PMA must have a registered physical or virtual office address in Surabaya. You can manage operations remotely as long as you maintain compliance with tax and reporting obligations, including monthly VAT returns and quarterly LKPM (investment activity reports). Directors must attend certain regulatory meetings in person.
What are the ongoing compliance requirements?
▾
You must file monthly tax returns (VAT, employee tax), submit an annual corporate tax return, renew applicable licenses (you have 5 to track), maintain LKPM (investment activity reports) quarterly, and keep company records with your notary. Non-compliance can result in license revocation and penalties.
Data verified against official Indonesian government sources
Every data point is marked with its verification status. We source from OSS.go.id, BKPM, Imigrasi.go.id, and Peraturan.go.id. This is informational guidance — always confirm with a licensed Indonesian lawyer for your specific situation.
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Disclaimer: This guide is for informational purposes only and does not constitute legal, tax, or professional advice. Regulations in Indonesia change frequently. Always consult with a qualified Indonesian lawyer and licensed tax consultant before making business decisions. Information on this page was last reviewed in March 2025 and may not reflect the most current regulations. IndonesiaCompliance is not a law firm and does not provide legal services.