The restaurant industry is one of the most profitable businesses in Indonesia. It managed to grow by 3% in 2020 despite COVID-19[i]. By 2025, the restaurant industry is expected to generate USD 3,724 million in revenue[ii]. This implies that the restaurant industry is performing well in comparison to other industries. Like any other business, setting up a restaurant in Indonesia requires a business license as well as other paperwork. This article will provide you with all the details of setting up a restaurant in Indonesia.
Dining Scene in Indonesia
Indonesia’s middle class is growing, and it aspires to a modern, worldwide standard of living. Consumers in Indonesia—the world’s fourth most populated country— are predicted to spend an additional $1 trillion per year by 2030[iii].
Because the majority of restaurant customers are from the middle and upper classes, this shows huge investment potential in the restaurant industry. Due to the busy nature of business activities in Indonesian regions such as Bali, local demand for restaurant services remains high.
Because Bali is one of the world’s most popular tourist destinations, it is necessary to provide facilities such as hotels and other forms of accommodation to support tourism growth. During the peak tourism seasons, Bali attracts visitors from all over the world who come to enjoy the island’s tranquil environment and magnificent landscapes.
The paradise island is also home to a diverse group of expats working for international organisations worldwide. As part of their adaptation to the island’s environment, people of these communities want to taste local cuisines. This leads to more demand for restaurants in Bali.
The procedure of Setting Up a Restaurant in Bali
The procedure for setting up a restaurant in Bali is similar to that of starting a business in Indonesia. Without the assistance of a local partner, a foreign investor in the restaurant industry may find it difficult to start up and begin operations.
First and foremost, as a restaurant owner in Bali, you must be aware of your options for forming a legal business company on the island. For foreigners starting a restaurant business in Bali, they have the option to incorporate a foreign-owned company (PT PMA). Foreigners are permitted to own100% of the PT PMA in the restaurant sector under the current Negative Investment List.
In addition, if you are interested in registering a company for your restaurant business in Indonesia, Permitindo can help. Our incorporation experts will supply you with all of the information you require to complete the incorporation process.
Licenses Requirements to Establish a Restaurant in Indonesia
To operate a restaurant in Indonesia, you’ll need the following licenses:
- Restaurant license – Tanda Daftar Usaha Pariwisata or TDUP is only provided after the business owner has chosen a location and the Minister, Governor, or Mayor has determined that it is appropriate.
- Operational or commercial license – It represents the restaurant’s commercial purpose and verifies the restaurant’s commercial activity in Indonesia.
- Alcoholic Beverage Trading License – This license, which controls the sale of alcoholic beverages, is required if the restaurant business wishes to sell any alcoholic beverages.
- Intellectual Property License – A restaurant that wants to play live or recorded music for its guests must first acquire a license from the label owner or other appropriate authorities to ensure that the music does not violate Indonesian copyright laws.
- Investor KITAS – whilst a visa is not a business license, it does allow you to stay in Indonesia and manage your business legally.
Legal Paperwork for Setting up a Restaurant in Indonesia
You need to obtain the following legal paperwork list for setting up a restaurant in Indonesia:
- Company Incorporation – An investor must comply with the legal requirements for company registration, which include providing a list of directors, designating shareholders, and specifying the nature of the business.
- Building Permit – Izin Mendirikan Bangunan or IMB confirms that approval to expand, remodel, or construct a restaurant location has been given.
- Tax ID – Nomor Pokok Wajib Pajak (NPWP). Prior to acquiring a commercial license, the investor must be a registered taxpayer with proof of tax compliance.
- Environmental Impact Analysis – It displays the environmental impact of the restaurant’s operations. It should include a waste disposal strategy as well as an assessment of the restaurant’s waste’s harmful nature.
- Food Safety Certification – obtained from the Ministry of Health. It verifies the safety of the restaurant’s products.
- Health Certification – Every employee of the restaurant must also have a health certificate, according to the Ministry of Health. This should confirm that the restaurant’s staff can safely handle food and beverages without risking illness.
Conclusion of Setting Up a Restaurant in Indonesia
Setting up a restaurant in Indonesia and its region, especially Bali, is a good investment opportunity for foreigners. However, doing so demands the completion of certain requirements. Long bureaucratic procedures may prevent foreign investors from entering Indonesia’s seemingly lucrative restaurant industry.
Should you require assistance in obtaining a license for setting up a restaurant or other business in Indonesia, please contact us by filling out the form below or sending an email to anita@permitindo.com. We will make sure you meet all of the requirements for obtaining the license, so you can start doing business as quickly as possible.
[i] The Insider Stories, 2020
[ii] Statista, 2021
[iii] Department of Foreign Affairs and Trade, Australia
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