Food and Beverage Industry in Indonesia

Indonesia’s Food and Beverage (F&B) sector remains one of the most resilient and attractive industries for foreign investors, entrepreneurs, and long-term expatriates. With a population of more than 275 million people, a rapidly growing middle class, and strong domestic consumption, the F&B industry continues to be a key contributor to Indonesia’s economic growth. According to data from Badan Pusat Statistik (BPS) and the Ministry of Industry, the F&B sector consistently contributes over 6–7% of national GDP, making it the largest manufacturing subsector in Indonesia. Moreover, post-pandemic regulatory reforms and digitalization have further strengthened Indonesia’s investment climate, especially for foreign-owned F&B businesses.

From fine dining restaurants and cloud kitchens to beverage manufacturing, cafés, bakeries, and franchise concepts, Indonesia offers diverse opportunities. However, success in this sector requires not only market insight but also a deep understanding of Indonesian regulations, licensing systems, and compliance obligations. This article provides strategic legal and business insights to help foreigners invest, work, retire, and live in Indonesia through the F&B sector.

Market Potential and Consumer Trends in Indonesia’s F&B Sector

Indonesia’s F&B market is driven by strong demographic fundamentals and evolving consumer behavior. Urbanization, lifestyle changes, tourism recovery, and the rise of digital food delivery platforms have significantly reshaped consumption patterns. Major cities such as Jakarta, Bali, Surabaya, Lombok, and Labuan Bajo remain hotspots for premium dining, lifestyle cafés, and international cuisine, while secondary cities offer high-growth potential with lower operational costs.

Key trends that foreign investors should note include the growing demand for halal-certified products, health-conscious food options, sustainable packaging, and experiential dining concepts. Indonesia is also one of the world’s largest halal consumer markets, making halal compliance not just a regulatory matter but also a powerful commercial advantage. For foreign entrepreneurs, aligning global concepts with local taste preferences and regulatory requirements is essential for long-term sustainability.

Legal Business Structures for Foreign-Owned F&B Companies

Foreigners who wish to operate an F&B business in Indonesia must establish a Foreign Investment Company (PT PMA). Under the Investment Law (Law No. 25 of 2007) and the latest Positive Investment List (Perpres No. 49 of 2021), most F&B activities are open to foreign investment, subject to certain conditions. Restaurants, cafés, catering services, and beverage manufacturing are generally allowed for foreign ownership, although minimum capital requirements apply.

As of current regulations, a PT PMA must have a minimum issued and paid-up capital of IDR 10 billion, excluding land and buildings. This structure allows foreign shareholders to legally own and control the company, obtain work permits (KITAS) as directors or commissioners, and conduct commercial activities nationwide. Choosing the correct business classification under KBLI (Indonesian Standard Industrial Classification) is a critical legal step that directly affects licensing, tax treatment, and operational scope.

Licensing and OSS-RBA System for F&B Businesses

Indonesia now uses the Online Single Submission Risk – Based Approach (OSS-RBA) system as the central platform for business licensing. Under this system, F&B activities are categorized based on risk level—low, medium-low, medium-high, or high risk. Most F&B businesses fall under medium-low to medium-high risk, requiring a combination of Business Identification Number (NIB), standard certificates, and operational licenses.

Important licenses and approvals for F&B businesses may include:

1. NIB (Nomor Induk Berusaha) as the primary business identity.
2. Location and building compliance (zoning and building use approval).
3. Food safety certification, such as hygiene and sanitation standards.
4. Halal certification, especially for food and beverage products distributed to the public.
5. BPOM registration for packaged food and beverages. 

Failure to comply with these licensing requirements may result in administrative sanctions, fines, or business suspension. Therefore, legal guidance is strongly recommended during the setup and operational phases.

Employment, Expatriates, and Workforce Compliance

For foreign directors, commissioners, chefs, or technical experts, Indonesian manpower regulations must be carefully followed. Foreign workers are required to obtain an Expatriate Placement Plan (RPTKA) and a Work Permit (KITAS), sponsored by the PT PMA. While Indonesia encourages knowledge transfer, certain positions are restricted to local workers, particularly operational and entry-level roles.

Employers must also comply with minimum wage regulations, social security (BPJS), and employment agreements governed by Indonesian Manpower Law and Omnibus Law updates. A well-structured employment framework not only ensures compliance but also enhances brand reputation and operational stability.

Taxation and Incentives in the F&B Industry

Tax compliance is a critical aspect of running an F&B business in Indonesia. Corporate income tax, value-added tax (VAT), withholding tax, and local taxes must be properly managed. Certain F&B activities may benefit from tax incentives, particularly those involving manufacturing, export-oriented production, or regional investment development.

Foreign investors should also pay attention to transfer pricing rules, dividend repatriation, and double taxation treaties. Strategic tax planning, aligned with Indonesian regulations, can significantly improve profitability while minimizing legal risks.

Why Work with Indoned Consultancy?

Establishing and operating an F&B business in Indonesia involves more than just a great concept it requires legal certainty, regulatory compliance, and strategic foresight. Indoned Consultancy specializes in assisting foreign investors, entrepreneurs, and professionals with company establishment, licensing, investment structuring, immigration, and ongoing compliance.

If you are planning to invest, expand, or relocate to Indonesia through the Food and Beverage sector, now is the right time to seek professional guidance. Contact Indoned Consultancy today for a free consultation and let our experienced legal and business advisors help you navigate Indonesia’s F&B industry with confidence and clarity.

Disclaimer

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.