Setting up a restaurant in Indonesia follows the same procedure as that of starting a business; however, the method of investment is different. In the restaurant business, a foreign investor may find it difficult to set up and begin operations without the support from a local partner.
For local business owners, setting up a restaurant requires that they register the business as a direct investment company, which may also be known as a limited liability company. This therefore shows that the process is similar that of registering a company in Indonesia.
The process is more complex for prospective restaurant owners who are foreigners since they are required to not only partner with local partners but also present a work permit and valid visa to prove their legal stay in the country. A foreign investor is required to set up a Perseroan Terbatas – Penanaman Modal Asing (PT PMA), which is a foreign-owned limited liability company. Indonesia’s company law states that a foreigner can own up to 51% of total shares in a PT PMA.
Alternatively, a foreign owner could appoint a local shareholder and oversee this shareholder. This would therefore allow the foreigner to have complete control of the restaurant.
An F&B business in Indonesia cannot begin its operations before receiving approval for the food products it intends to sell. The National Agency of Drug and Food Control is responsible for assessing the sources, quality, and usage for both raw materials and finished food products prior to presenting the F&B business in question with an ML number.
However, restaurant owners do not have to obtain licenses for ingredients which are to be used to make finished products which will subsequently be sold in restaurants. The restaurant owners must, however, obtain a license for the finished food products. The process of license approval takes a period ranging from about six months to one year in order for all compliance regulations to be completed; these regulations are to be performed on the premises of the location where the sales and distribution of food and beverage products will take place.