F&B Services’ Compliance in Indonesia: Tending to Clipped Wings

F&B Services’ Compliance in Indonesia: Tending to Clipped Wings

  • InCorp Editorial Team
  • 25 June 2025
  • 4 minutes reading time

In June 2022, the provincial government of DKI Jakarta executed a joint field inspection by its relevant institution on Holywings Group (HW). HW is famous among F&B services chains specializing in bar businesses.

Holywings Group held 12 outlets throughout Jakarta. It was then inspected by two offices: the Office of Tourism and Creative Economy (Disparekraf) and the Office of Industry, Trade, Cooperation, and Small Business Enterprise (DPPKUKM).

In the same month, both offices issued joint findings. They found that some of the inspected outlets of their F&B services do not have a verified business license necessary to operate bar business (KBLI 56301) in the Online Single Submission Risk-Based Approach (OSS RBA).

Furthermore, the outlets did not have proper business licenses to conduct direct alcoholic sales of F&B services. In addition, 7 of the 12 outlets also only possessed business licenses to sell alcoholic drinks for takeaway purposes (KBLI 47221).

While the public would expect an administrative warning and fines to be applied to the group, the governor of DKI Jakarta apparently said his final word.

Under Regional Regulation Number 8 the Year 2007 concerning Public Order and DKI Jakarta Governor Regulation Number 18 the year 2018 concerning Implementation Tourism, Anies Baswedan ordered the Municipal Police of DKI Jakarta to close all 12 branches of Holywings effective immediately.

The Aftermath

Their ambitions bring down another dark cloud after recently opening due to relaxed government COVID-19 policy regarding public gatherings. The action by the governor abruptly terminated their F&B services activities. It is worsened with thousands of employees left uncertain of their livelihood due to the termination.

Other regional governments emulated the action of DKI Jakarta’s governor regarding any F&B services of HW Group. Provincial and regional governments in Surabaya, Bogor, Semarang, and Tangerang conducted inspections of their Holywings’ outlets. They discovered legal violations, prompting another wave of outlet closures numbering fewer than 11 branches.

News media raised their concern about this predicament to stir uncertainty in Holywings’ future business prospects in Bali as their largest ongoing branch is under construction. Indonesian news media offered a complementary perspective from the recent Holywings Group’s marketing promotion.

Their out-of-the-box communication strategy resulted in public complaints and inspections by the provincial government of DKI Jakarta. Readers should be able to objectively view that gaps in legal compliance contributed to a loss of company operations and may very well potentially cease it altogether.

How Holywings Group will resolve its F&B services predicament will depend on the legal-business dynamics of the management. The lesson from the current event is that business owners should obtain suitable business licenses and set structured company policies accordingly.

Expedite Your Legal Matters with InCorp

It is imperative to complete all the necessities prior to opening their business or expedite the license procurement process while business is ongoing. Constant communication with local government and critical stakeholders is vital in preserving business sustainability.

To avoid such cases, InCorp Indonesia (an Ascentium Company) provides business license consulting services to new and existing business owners to explore or maintain their presence in the Indonesian market (Jakarta, Semarang, Surabaya, Bali, Batam). Please contact us now to better understand your business in Indonesia.

Disclaimer: InCorp assumes no responsibility or liability for any errors or omissions in the content of this article. The information contained in this site is provided on an “as is” basis with no guarantees of completeness, accuracy, usefulness, or timeliness. The information contained herein is not intended to be a source of legal advice or analysis with respect to the material presented and the information and/or documents contained in this article. Please see a qualified consultant for this matter.

Verified by

Hotdo Nauli

Senior Legal & Delivery Manager at InCorp Indonesia

Hotdo heads the Legal and Delivery team at InCorp Indonesia, managing Product Registration, Legal Advisory, and Business Licensing. With over 8 years of experience, she focuses on compliance and integrity, ensuring all client operations align with Indonesian laws and regulatory standards, including contract reviews and sector-specific licenses. She is also a licensed advocate and a member of the Indonesian Advocates Association (PERADI). 

Frequently Asked Questions

    Under Indonesian Company Law, shareholders can hold shares with various preferential rights, such as voting rights, nomination rights for board members, priority dividend or liquidation proceeds, and options for conversion or withdrawal after a set period.

    Indonesian Company Law establishes a two-tier governance system with Directors managing day-to-day operations and representing the company, while the Board of Commissioners supervises and advises them. The articles of association may empower board of Commissioners to provide consent or assistance to Directors for specific legal acts.

    In Indonesia, a PMA company is typically required to submit various reports to relevant authorities, such as:

    • Annual financial report
    • Investment realisation report
    • Manpower and employee welfare report
    • Expatriate utilisation report
    • Company loan repot
    • Foreign exchange and prudential principles report

    However, depending on the business activities and classification relevant authority may require additional reports from a PMA company.

    A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances.

    • Import facilities
      Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production.
    • Tax holiday
      The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status.

      • Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy.

    • Tax allowance
      For companies in certain designated areas or regions, the government may provide the following tax concessions:
      Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration.
      Accelerated depreciation and/or amortisation deductions
      An extension of tax losses carried forward for a maximum of ten years
      A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents
      The applicant eligible has to meet high-level-criteria for the above tax facilities:
      High investment value or for export purposes
      High manpower absorption
      High level of local content
    • Investment allowance
      The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project.
    • Super deduction
      This facility could be granted to certain businesses, such as:
      60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame.
      Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities.
      Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia.

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The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

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