Starting A Restaurant in Indonesia – A Guide for Foreign Investors

Did you know that Indonesia’s food and beverage industry is projected to grow by almost 9% in the next 5 years? At such a significant level of growth, you might be interested in expanding your business into the Indonesian market. However, before starting, there are local laws and regulations to keep in mind.

This guide will walk you through the key steps and local regulations for starting a restaurant in Indonesia as a foreign investor.

How to Open a Restaurant in Indonesia

Setting Up A Foreign-Owned Restaurant Business in Indonesia

Registering your company with the local government is an important step to setting up a restaurant in Indonesia. The most common business structure for setting up a restaurant in Indonesia is a Foreign Owned Limited Liability Company (PT PMA). This structure allows its owners to have the same rights as a local company in the country.

To set up a PT PMA in Indonesia, there is a minimum capital requirement of IDR 2.5 billion (approximately USD 150,000).

Additionally, the following certifications and licenses are mandatory for starting a restaurant in Indonesia:

• Company Registration Certificate / Tanda Daftar Perusahaan (TDP): Mandatory certification that showcases the official registration of a business entity operating in Indonesia.
• General Business License / Surat Izin Usaha Perdagangan (SIUP): For businesses engaged in commercial activities, certifies that a business is legal to trade and operate within the country. This includes the sale of food and beverages in restaurants.
• Business Identification Number / Nomor Induk Berusaha (NIB): Mandatory requirement for businesses to operate in Indonesia.

Emerhub local experts can help you navigate the preliminary steps for setting up a restaurant in Indonesia through our comprehensive company registration service. We can also help you with finding a suitable location and establishing the necessary logistical network for distributing your products. 

Key Licenses to Consider for Running A Restaurant in Indonesia

To set up a company within Indonesia’s Food and Beverage industry, you must ensure compliance with regulations encompassing all of your restaurant operations. The primary aim is to ensure customer safety by meeting operational standards in terms of your products, premises, and staff:

Mandatory F&B Licenses	Building Safety Permits	Business-Dependent Permits
Restaurant License / Izin Usaha Restoran: certifies that your establishment complies with health, safety, and operational standards required by local authorities for restaurants. Producer Import License (API-P): Required for businesses that import raw materials or components for manufacturing or processing. This applies to ingredients used in restaurants. Food Safety and Health Certification: Mandatory for all businesses involved in food production, processing, or distribution, ensure that food products meet safety standards and comply with regulations set by the National Agency of Drug and Food Control (BPOM) and the Ministry of Health	Building Permit / Perizinan Bangunan Gedung (PBG): Building approval permit for starting construction, renovations, and building maintenance, ensures the building follows the updated safety standards. Location Permit / Surat Izin Tempat Usaha (SITU): Certifies that your business can legally operate in a specific location in line with zoning regulations, important for restaurants that may impact traffic and noise levels in an area. Nuisance Law Permit / Disturbance Law Permit: Ensures the establishment will not disrupt the public space with noise or pollution. Environmental Impact Analysis (AMDAL): Assesses the potential environmental impact of proposed projects in Indonesia, ensures that businesses comply with Indonesian environmental laws and regulations	Copyright License: A legal agreement that grants permission for the use of copyrighted works like music, literature, art, and software, to protect intellectual property rights. Restaurants that play music or have live bands require this license. Alcoholic Beverage Trading License / Surat Izin Usaha Perdagangan Minuman Beralkohol (SIUP-MB): Legal requirement for businesses that wish to engage in the trading of alcoholic beverages, as it regulates the distribution and sale of alcoholic drinks. Tourism Business Registration Certificate / Tanda Daftar Usaha Pariwisata (TDUP): Mandatory for any restaurant or business that is a part of the tourism industry or located in a touristic location.

Ensuring Compliance with Food and Beverage Product Registration Regulations

BPOM Food Product Registration

Also known as the Badan Pengawas Obat dan Makanan, BPOM is the local governing body responsible for the safety, quality, and efficacy of food and pharmaceuticals in Indonesia. It is mandatory for all businesses selling regulated goods in the food and beverage industry to register their products with BPOM. 

When it comes to labeling, product labels need to be predominantly in Bahasa Indonesia, with an indication of their country of origin. Essential information such as the ingredients list, allergens, storage instructions, expiration dates, and more are required to be stated on the label. 

After registering your products with BPOM, they will issue your restaurant a BPOM registration certificate. Keep in mind that certain imported goods also require a distribution license. To learn more, take a look at our guide to BPOM registration in Indonesia.

Securing Halal Certification

As Indonesia has a strong Muslim community and presence, it is highly recommended for restaurants to obtain a halal license. This ensures food products and preparations comply with the Islamic dietary laws in place.

This license can be applied at the Halal Product Assurance Organizing Agency (BPJH). The Halal Inspection Institution (LPH) will conduct an inspection and evaluate the food products and preparation. The Indonesian Ulema Council (MUI) will then determine the Halal status through a Halal Fatwa Assembly.

Regulation for Selling and Distributing Alcohol

When it comes to alcohol sales and distribution, the laws in Indonesia are relatively strict. Restaurants that intend to sell alcohol are required to apply for the Alcoholic Beverage Trading License. Alcohol importers need to register with the Ministry of Trade. 

Furthermore, Indonesia implements high import duties on alcoholic beverages which increases its price significantly. There are three categories of alcoholic beverages in Indonesia, each affecting taxes differently:

• Category A: Less than 5% alcohol content, subject to an excise tax of IDR 11,000 per liter
• Category B: 5% to 20% alcohol content, subject to an excise tax of IDR 42.500 per liter
• Category C: More than 20% alcohol content, subject to an excise tax of IDR 101,000 per liter

Emerhub’s team of local experts can assist you in identifying and applying for the special licenses and permits required based on your business needs and planned activities in Indonesia. Fill out the form below and a member of our team will get in touch.