Although it might not be quite as easy as it looks, millions of people dream of opening their own restaurant.
Opening a new restaurant and turning it into a success requires more than just hard work and dedication. As with any businesses, it requires a lot of paperwork. Failing to get appropriate licenses and permits will result closing from local government.
The retail sector, including hotels and restaurants, is changing rapidly as personal income and consumer spending increased. According to McKinsey Global Institute, 90 million new Indonesians are likely to join the consuming class, making it as big as about 135 million by 2030. A large middle class population will be an important part of this story. This group of people will look for a new house and car, filling shopping malls and restaurants. Despite the weakened rupiah, this sector contributed IDR 1473 trillion in 2014 or 14.6% of GDP, grow at a double-digit rate for five consecutive years since 2010. Restaurant comes next in the group added IDR 235 trillion with average annual growth of 11.3% over the past five years, strongly points out the increasing number of food-service operations.
Since food and drink service business is referred as tourism business, owner may refer the regulations to Ministerial Regulation of Ministry Culture and Tourism No. PM. 87 /HK.501/MKP/2010. Based on this regulation, tourism business is the business of providing food and drinks including restaurant, food stall, bar, café, catering service, food court, and other food and beverage service business.
#1 Who are allowed to obtain Restaurant License?
Local and foreign investors are welcomed entering restaurant business. Opening a restaurant is quite similar with registering another type of company in Indonesia. Founders must set up a Direct Investment Company. This is basically a limited liability company (LLC) called Perseroan Terbatas (PT) in Indonesia. For foreign investors, there is also foreign-owned LLC called PT. PMA – Penanaman Modal Asing.
Certain business fields have limitation for share ownership for foreigners. According to Presidential Decree Number 39 Year 2014, foreign investors are allowed to have 51% ownership for restaurant; 49% for bar and café. The rest of ownership will belong to local shareholder. In certain situations when the foreign investors are not ready to fulfill all requirements for PMA company registration, foreign investors still have alternative option by establishing a local nominee company in form of local limited liability (i.e. Perseroan Terbatas) with 100% local shareholders which will be under his control.
#2 How to Obtain Restaurant License?
To get restaurant license, application for the registration shall be addressed to the tourism and culture agency at local government where the tourism business is located. It could be at Regent or Mayor Office, except for Special Capital Province of Jakarta at Governor Office.
The process of registration of tourism businesses cover:
- Application for the registration of tourism businesses
- Verification of applications
- Inclusion in the list of tourism businesses
- Issuance of certificates of tourism business registration
- Updating of the list of tourism businesses, in the event of changes in supporting documents
#3 What Documents Should be Prepared?
Required documents to obtain restaurant license are as follows:
- Filled Application Form
- Copy of Company Article of Association
- Copy of ID/Passport
- Copy of taxpayer registration number (i.e. NPWP) of the company
- Copy of Building Permit (i.e. Izin Mendirikan Bangunan/IMB)
- Copy of Disturbance Law/Hinder Ordonnantie (i.e. Undang-Undang Gangguan/HO)
- Copy of Environmental Impact Analysis (i.e. Analisis Dampak Lingkungan/AMDAL)
- Colored picture of business location with size-4R showing front, left, and right look, including each room inside.
Besides required documents above, restaurant requires additional license regarding service offered. If restaurant is planned to provide alcoholic beverage, it is important to get Alcoholic Beverage Trading License (SIUP-MB). Furthermore, restaurants that feature live or pre-recorded music, they must obtain licenses from label record or competent foundation that facilitate the use of such material. Fail to do so could trigger expensive penalties.
Thinking about starting your own restaurant? If you need further detail information to acquire restaurant license in Indonesia, feel free to contact Cekindo and we will provide you all required information and assist you in obtaining restaurant license.
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