How to Start Capitalizing on Surabaya’s F&B Industry

Surabaya offers many opportunities for aspiring entrepreneurs to establish their mark in the food and beverage (F&B) industry. With its abundant cultural heritage and diverse culinary landscape, Surabaya presents fertile ground for those seeking to embark on a culinary adventure. 

Whether you dream of opening a trendy café, a bustling restaurant, or a unique food stall, this guide will provide essential insights into establishing your F&B industry in Surabaya. 

Sustainable growth in Surabaya’s F&B industry 

The number of new cafes and restaurants in Surabaya has consistently grown since last year, indicating a vibrant F&B business in the city. Tjahjono Haryono, the Chairman of Apkrindo, stated that Surabaya’s culinary industry had attracted more investment.

Expansion from Jakarta is one of the popular investments due to its significant market potential in the city. With average turnover reaching 80% last year and further increasing to 90% during Ramadan, Surabaya promises opportunities.

Tucano’s, established in Jakarta, has started its new venture in Surabaya. The restaurant director chose Surabaya for expansion due to its fair market share and potential. It illustrates the magnitude and potential that Surabaya holds in the F&B industry. 

Read more: Investment Opportunity on The F&B Industry Surabaya

How to start an F&B business in Surabaya

There are several considerations to note when starting a venture in Surabaya’s F&B industry: 

1. Local partnerships

The varied investment requirements in the F&B industry may make it easier for foreign investors to open a restaurant with the help of a local partner. Therefore, teaming up with a local partner from Surabaya may be helpful, considering they will have more know-how and expertise in the Surabaya market. 

2. Registering a legal entity

Local Surabaya entrepreneurs can register their restaurant as a limited liability company or utilize a direct investment firm using a procedure similar to registering any other company in Indonesia. Limited liability companies are often preferred as they are regulated and provide greater certainty for all parties. 

According to Indonesian company law, foreigners can set up a foreign-owned limited liability company with a 51% foreign ownership cap. As an alternative to this, foreign owners may name a local as a shareholder while still maintaining total control over the eatery.

3. Obtaining business permits

Foreigners must demonstrate their legal status and provide documentation such as a work permit and a current visa. 

4. Relevant licenses

Before opening for business, an Indonesian F&B establishment must receive approval for the food products it plans to sell. The National Agency of Drug and Food Control issues a Makanan Luar (ML) number for compliance after evaluating the provenance, quality, and use of raw ingredients and final food products. 

Permits are optional for the specific ingredients utilized by restaurant owners to produce and sell their finished products. However, they must obtain a license for the final food items. During the license approval procedure, which typically takes six months to a year, the restaurant proprietors must adhere to the rules at the location where they will sell the food and beverage goods.

License and legal requirements

Permits 

Specific permits must be secured for certain activities to operate an F&B business. 

• The Building Permit or Izin Mendirikan Bangunan is required to conduct modification, expansion, or building restaurants in predetermined locations. 
• The Nuisance Law Permit or Undang-Undang Gangguan is required to state that the business will not disrupt public peace and safety. 
• Environmental Impact Analysis or AMDAL is required to analyze how the restaurant affects the surrounding environment, how it plans to dispose of waste and other environmental aspects. 

Licenses

After acquiring the necessary permits, the following action involves submitting your license application to the local government’s tourism division. To secure a restaurant license, here are the following requirements that need to be provided:

• Copies of all permits and certifications.
• A copy of the Articles of Association.
• A copy of your ID or passport and a valid working visa if you are a foreigner.
• Colored photographs of the restaurant premises, capturing multiple angles of the exterior and interior of each room.

In the case where the F&B business serves alcoholic beverages, then it is essential to apply for an Alcoholic Beverage Trading License (SIUP-MB). Furthermore, if your restaurant intends to play pre-recorded music, it is necessary to obtain a license to ensure compliance with copyright regulations.

Read more: Setting up Business in Surabaya: A Simple Guide for Foreigners

Conclusion

In conclusion, setting up a restaurant in Indonesia involves following a similar procedure to starting any other business, with specific considerations for the F&B industry. 

Local business owners register their restaurants as direct investment companies, while foreign investors face more complexities, requiring partnerships with locals and obtaining work permits and valid visas. 

Approval from the National Agency of Drug and Food Control is necessary before commencing operations, ensuring the quality and sources of food products. Lastly, Surabaya is a strategic place to start a business considering its population, interest, and potential.

Businesses that would like to follow Tucano’s footsteps in branching out to the Surabaya market may consult with InCorp Indonesia (an Ascentium Company). 

As a leading corporate services provider, we offer extensive services for company registration, product registration, and also business licenses. Engaging with InCorp allows owners to focus on the F&B business entirely.