Opening A Restaurant in Bali: Why and How?

Despite the hard work that a foreigner has to put into for running any kind of business, opening a restaurant business in Bali may be one of the most rewarding experiences of your life. Setting up a restaurant business in Bali fuses two of every foreign investor’s greatest desires: making a steady profit while living in paradise.

Apart from that, due to the growing tourism and increasing consumer spending in this country with a population of over 260 millions, both residents in Bali and tourists have also grown to appreciate the local and international cuisine the island offers. The tremendous support from the Indonesian Investment Board and Tourism Board has also made Bali become the new dining destination of the world.

Therefore, it is pretty clear that opening a restaurant in Bali, if done right, is a sure-shot path to success. If you still don’t know how to go about it, or are in the midst of setting up your first restaurant in Bali, then you are in the right place.

This article tells you, in detail, why and how you should start a restaurant business in Bali.

Dining Scene in Bali

The number of international and local restaurants that has sprung up in Bali over the years has transformed this beautiful island into a lucrative paradise for more than just another popular holiday destination.

According to McKinsey Global Institute, there will be about 135 million people that belong to the consuming class of the country by 2030. Therefore, people in this consuming class will constantly look for entertainment and dining experience in restaurants with the additional income. The tourism sector, including restaurants, contributed to the country’s GDP of 14.6% in 2014, with an amount of IDR 1473 trillion.

Requirements for Setting Up a Restaurant Business in Bali

Restaurant businesses are considered a part of the tourism business in Bali. Therefore, foreign investors can refer to Ministerial Regulation of Ministry Culture and Tourism No. PM. 87 /HK.501/MKP/2010.

To own and start a restaurant in Bali, it is mandatory to establish a restaurant with physical space that can hold up to more than 60 seats. In addition, the location of your restaurant must belong to zones that are adequate for commercial activities. Necessary permits are required as well, which will be discussed in the following sections.

Legal Entities for Restaurant Business in Bali

First of all, as a business owner of a restaurant in Bali, you will need to know your options of registering a legal business entity on the island.

For foreigners, there are two common types of legal entity available in Bali for restaurant business: a local company (PT) and a foreign-owned company (PT PMA).

A PT company has to be 100% owned by an Indonesian national. So if you are a foreign investor who wishes to own a business or to expand your business in Bali, this type of formation may not be suitable for you.

Alternatively, you can opt for a PT PMA. Fortunately, under the current Negative Investment List (NIL), foreigners are allowed to have 100% ownership of the PT PMA in the restaurant sector.

The permission of 100% foreign ownership is a part of the Indonesian government’s effort to attract even more foreign investment in this burgeoning sector.

However, one thing for foreigners to take note is that a small-scale eatery, also known as “Rumah Makan” in Indonesian, can only be formed under a PT owned by Indonesians.

Licenses Required for Restaurant Business

The permits and licenses required for this sector are listed in the following:

• Tanda Daftar Usaha Pariwisata (TDUP) (or restaurant license) with a general validity of 5 years, depending on the area in Bali
• Tourism operational license
• Health and hygiene license
• Building permit (IMB)
• NPPKBC and/or SIUP-MB if you sell and/or produce alcohol
• Intellectual property licenses if you play pre-recorded music or have live music

Required Documents for Restaurant License

• Complete application form
• Copy of ID/Passport
• Copy of company NPWP
• Copy of Company Article of Association
• Copy of IMB permit
• Copy of Environmental Impact Analysis AMDAL
• Pictures in color of business location

The cost of a restaurant license starts from IDR 120 million. The entire process of company formation and license issuance will take up to 2-3 months.

How Cekindo Can Help

Preparing all the documents and reading through all the rules and regulations related to opening a restaurant in Bali as well as business and restaurant licenses may appear to be time consuming and energy draining. That is why Cekindo is here to assist you in starting a business in Bali. Get in touch with us today. We also have offices in Jakarta and Semarang.