Restaurant_Company formation in Indonesia

Restaurant Market Experiencing Great Growth: Business Opportunity in Indonesia

  • InCorp Editorial Team
  • 15 June 2015
  • 4 minute reading time

Opening a restaurant in Indonesia

Opening a restaurant is a popular business venture for foreign companies in many countries and Indonesia is no exception.

While this market offers many opportunities, navigating the regulations and successfully completing company set-up in Indonesia is difficult without a local partner.

Indonesia’s economy has been experiencing rapid growth recently, following with the emerging population of middle class and affluent consumers (MAC).  According to Boston Consulting Group report in 2013, there are currently about 74 million MACs in Indonesia, and it will double by 2020 up to 141 million people. Despite the weakened rupiah and falling of oil prices, domestic demand remains strong with most consumption are segmented into goods, vehicles, durable services, hotels and restaurants. The increasing busy and hectic lifestyle in urban areas is one of the factors for this high consumption. People have less time to do household work, includes cooking; hence, choosing restaurants or home delivery is convenient option to enjoy the daily activities.

By seeing the current vibe among Indonesian society, opening up restaurants or cafes is auspicious business venture for local or foreign investors. In 2013, the hotels and restaurants industry contributed 14.33% of Gross Domestic Product (GDP) for Indonesia. It was the third largest contributor after manufacturing and agriculture. The industry is very diverse, ranges from high-end hotels and restaurants that serve international cuisine to local low-end restaurant and warung. Foreign investors will have various options whether they want to open chain or independent restaurant.

Opening a restaurant is not much different from registering another type of company in Indonesia. At the first stage, the business must set up a Direct Investment Company. This is basically a limited liability company (LLC) called Perseroan Terbatas (PT) in Indonesian. For foreign investors, there is also PMA—Penanaman Modal Asing – it is the only way to do foreign-owned company registration in Indonesia.

To complete company registration in Indonesia, a firm must get approval to invest from the country’s Investment Coordination Board (BKPM).

After getting the company registered, investors should fulfill required documents for hotels and restaurant industry, such as:

  • Building permit (i.e. Izin Mendirikan Bangunan): it is a state administrative decision for any individual who is qualified to expand, reduce, maintain, and modify the building.
  • Nuisance law (i.e. Undang-Undang Gangguan): it is a business permit for an individual or entity on specific location that the appointed location is not potentially dangerous provoking loss, disturbance, peace and public order.
  • Business license: it is required before performing commercial activities
  • Restaurant license
  • Working visa

 

To get restaurant license, the company should have determined about the exact location of their business. The duration of whole process from company registration to restaurant license generally takes around six months. While this part of the process can be fairly quick, it is an important first step that needs meticulous responsiveness. Some investors usually ask local consultant to assist with researching documents and preparing the investment approval paperwork more efficiently. Once the investment plan and the procedure are complete, the business can start. Moreover, investors may refer the regulations to Ministerial Regulation of Ministry Culture and Tourism No. PM. 87 /HK.501/MKP/2010.

Certain segments of hotels and restaurants industry are very competitive, especially on chain restaurant industry. Several global chains that have been successfully established in Indonesia market are McDonald’s, KFC, Pizza Hut, and Starbucks. While most of global chain is dominated by Western brands, some Asian brands like Yoshinoya and Café Benne are now getting more loyal customers, mostly young people. By applying good strategies and understanding about customers’ preference, there is always big chance for investors to win in this business.


Cekindo has extensive experience in handling all steps related to the restaurant PMA company registration process, including preparing the articles of incorporation and deed establishment and licenses for cafes, restaurants and hotels.

Please contact Cekindo for more details.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

Lead Form

Disclaimer: 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.

Frequent Asked Questions

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.