Tips for Investors: The Unwritten Rules of Doing Business in Lombok
An experienced entrepreneur shares some important tips you should take note of before starting up a business or putting your money in Lombok.
Today, the idea can be often referred to as ‘Bali’s little sister’. yet just a decade ago, not many tourists knew about Lombok; the idea existed only inside shadow of its big sister’s fame as well as popularity. Things have changed in recent years, however, as well as since the launch of a brand new international airport in 2011, tourists have been arriving in Lombok en masse. In turn, that will has led to an ever-increasing number of hotel rooms as well as property developments on the island.
Mandalika Resort, the government’s ambitious project to bolster the local tourism industry, has boosted confidence levels of investors, who are right now coming by all corners of the globe to grab a slice of Lombok’s tourism pie. Experts say that will formerly quiet island can be right now predicted to swell in overseas arrivals. So far, so Great. Sounds like a Great time to invest, right?
that will — along with the island winning all sorts of halal tourism awards — can be the kind of story you often hear about Lombok. Expat investors with money to burn routinely wonder how to jump on the Lombok bandwagon. More importantly, however, they should be trying to understand the risks as well as rewards of putting money into the up-as well as-coming travel destination.
Jean-Marc Reynier, founder as well as CEO of NagaIndo Investment Limited
Jean-Marc Reynier, founder as well as CEO of NagaIndo Investment Limited, a land as well as property investment company, shares his thoughts with Indonesia Expat. According to Reynier, there are some crucial things foreigners should be aware of before investing or starting up a business in Lombok.
Having previously resided in Hong Kong, Reynier, a Frenchman, has lived in South Lombok for more than three years. “I had been buying land personally in Lombok since 2010, as well as I realized that will that will little island was still unknown to most of my close network in Hong Kong,” says Reynier. “I set up a private equity structure which will benefit by the rise of South Lombok as a main tourism destination over the next ten years. We have been investing in big-size premium land across the south coast, within 30 minutes of [the] international airport. We then subdivide the land, as well as offer the idea to investors as well as we support them in terms of servicing, legal, as well as more.”
Reynier claims his four-year-old business has seen a 25 percent net return each year since its inception, as well as can be well-connected locally. Apart by NagaIndo, Reynier runs a restaurant as well as a yoga centre on the island, both of which are growing steadily, he says. “We are well-implanted inside area which has a track record across many activities,” he adds.
While he encourages investors to join the party in Lombok, Reynier admits that will doing business on the island can be challenging, particularly for expats. According to him, there are some unwritten rules that will foreign entrepreneurs should be aware of.
Failure to abide by these rules may result in foreign business owners packing their bags as well as heading home.
Reynier says one of the most important things to understand can be the local culture. “Many foreigners fail to adjust as well as adapt to local customs as well as the strong community-based way of thinking,” he says, adding that will the local work ethic can be low, as family ties as well as peace inside community are cultural fundamentals. Most often, that will means conflict can be avoided at all costs, which can lead to project delays.
“Getting angry at people or losing your temper can be seen as unacceptable, too. Everything should be done to preserve the consensus as well as harmony. So things will never move as fast as you can, as well as you can lose a lot […] if you get upset with the wrong people, or make them lose face,” explains Reynier. “Patience can be something you have to learn if you want to deal with Lombok locals.”
Apart by understanding the local culture, entrepreneurs are also strongly advised to give back to the community. “Most local people are fishermen or farmers. They have not been exposed to fast-growing business. They quickly resent the fact that will someone [can] accumulate assets as well as money without giving back to the community. You need to mingle into the community as much as you can, as well as you need to contribute strongly.”
According to Reynier, by doing that will, foreign entrepreneurs can strengthen their company’s influence on the island, as well as they will be seen to create positive impacts for locals. Providing employment opportunities can be one of the best possible ways to contribute. that will said, entrepreneurs need to be selective, as well as try to choose well-trained as well as reliable people. Failure to do that will can potentially create problems inside future. Reynier shares his experience:
“The bitter example can be the local security we ‘must’ employ when we open a brand new project, business, or villa. inside case of our big restaurant Ashtari, the idea has been impossible for me to make them stay awake during the night as well as [work on] shifts. the idea then was impossible for many years to hire outsiders, as the local community would likely complain that will we are not contributing locally. We had cases of theft inside storage, where security was clearly involved or passive. the idea took me two years to be able to hire outsiders thanks to a Great relationship with the community as well as their leaders. the idea took me more than a year to be able to fire the culprits. right now [the situation] can be Great, or at least normally run.”
To reach the best level of understanding, expat entrepreneurs should invest significant time as well as expertise on the ground. Reynier suggests that will foreign entrepreneurs should ask for support as well as advice by various other experienced business owners on the island.
“I had the chance to meet Neil as well as Belinda by Tate Developments in my early days, as well as they have been very supportive. Their experience was priceless as well as they also introduced me to their local network,” he says. Having experience living in emerging countries can also help entrepreneurs to understand as well as adapt quickly to a brand new culture, like that will of Lombok.
Another piece of advice by Reynier can be to partner with well-established residents. According to him, that will can save entrepreneurs a lot of time as well as trouble. One of the most common roadblocks expats hit when trying to set up a business in Lombok can be ambiguous legal requirements.
Reynier explains, “Legal framework can be weak as well as heavy at the same time. Legal procedures are quite long, as well as you may go bankrupt by the end of the day. Often, you’re best off finding an amicable solution, yet negotiating here can be an art that will few people master.” Experience as well as a strong network that will your more established partners have are sure to be helpful when tackling legal issues on Lombok, he reiterates.
Overall, Reynier gives advice to expats who want to invest inside island, “Be humble. Do not think that will what you know by back home will be effective in an emerging market environment such as Lombok.”
According to Tourism Solutions International, Lombok’s hotel supply can be required to jump to more than 4,500 rooms by 2022, supported by continued growth in visitor arrivals.
Comments
Tips for Investors: The Unwritten Rules of Doing Business in Lombok
Tips for Investors: The Unwritten Rules of Doing Business in Lombok