GLOBAL BUSINESS

ENVIRONMENT
BUSINESS PROPOSAL

ADITYA YADAV-19DM019
; SECTION-A
jejke
 TITLE

Indonesian Restaurant Sector

Indonesia’s restaurant and meals franchise area is still present process robust expansion
notwithstanding financial slowdown because of the sluggish family spending within the first semester
of 2017 (See Indonesia’s Second Semester Economic Outlook: Focusing on Investments). Head of
Creative Economy Agency Mr Triawan Munaf revealed that the culinary region stays the biggest
contributor to Indonesia’s gross home product (GDP) among all of the creative economy sectors.
Technology development, especially social media and online-based meals delivery offerings, has
helped pressure the boom of this zone by way of increasing client demand and expanding its reach in
addition to consumer base

ince 2014, the Indonesian eating place and food franchise region (See Thirst Quenching: Indonesia’s
Food & Beverage Industry) has always recorded remarkable increase supported by using the u . S .
A .’s elevated in line with capita income and the development of technology which has underpinned
modifications in existence. According to the Jakarta Dining Index researched with the aid of
Qraved.Com, the wide variety of high-quit eating places has grown 250% from 2009 to 2014. In 2013 by
myself, Jakarta citizens visited eating places 380 million times and spent $1.Five billion USD on
consuming out.
The research found out that eating out has turn out to be part of everyday social activities among
Indonesians whereby they socialise and gather with households, pals, co-employees, and business
companions to foster relationships. This fashion is predicted to keep to head up by 30% within the
quick and medium time period.
Other lifestyle changes supporting the growth of Indonesia’s restaurant and food franchise
organizations is the developing fashion amongst people in big towns to work lengthy hours both
because of obligation or honestly to keep away from traffic jams. For these people, the best realistic
choice while feeling hungry all through the night is to order food from eating places. As a end result,
Indonesia’s center-elegance are eating less in their homes and eating out greater. This fashion has
been confirmed by in addition research; a examine via Nielsen confirmed that 11% of Indonesian
residents devour out as a minimum as soon as a day. This is better than the worldwide common of 9%.
 Food and beverage trade statistics

According to data retrieved from the Global Cold Chain Allian

expenditure on food amounted to USD 179 billion (approx. EUR 152,5 billion 2 ) in 2015 and represented
about 36 percentage of overall client expenditure in Indonesia. The per capita spending on meals became
recorded at USD 697 (EUR 594 billion). Forecasts screen that expenditure on food and beverages will
steadily increase as much as 2020. National information screen that such expenditure will increase from
just over IDR 2 trillion (EUR 126 million) to approximately IDR four trillion (EUR 252 million) in 2020.3

In 2015, the EU had a giant change deficit of EUR 3,411 million for its agri-food change with Indonesia.
EU exports of agri-food merchandise to Indonesia amounted to EUR 735 million, while EU imports of agri-
food products from Indonesia amounted to EUR four,148 million. Over the period 2005-2015, the annual
price of alternate for EU agri-exports to Indonesia turned into 9.4 percent in comparison to 10 percentage
within the case of EU agri-imports from Indonesia. The top 5 EU agri-food export merchandise in 2015
and their respective export stocks had been: milk powders and whey (27 percentage), wheat (9 percent),
food arrangements (eight percent), puppy food (6 percentage), and raw tobacco (five percentage).4

It is important to notice that the variety of goods traded between Indonesia and the European Union is
largely complementary. Hence, the economies are considered a really perfect “trading” match.

THE INDONESIAN FOOD AND BEVERAGE MARKET

Boasting one of the most important populations inside the international, the demand for number one items
in Indonesia, which includes food and beverage merchandise, could be very excessive. Importantly, whilst
local production of food and drinks is robust, a massive percentage of merchandise nevertheless have to
be imported to satisfy local call for. As a end result, EU producers stand to benefit immensely as client call
for maintains to upward push.

Indonesia has amazing marketplace ability for European exporters of branded and uniqueness food
products, in addition to for suppliers of meals components and packaging. 7 Rising disposable earning
tiers have led to accelerated patron spending for a wide variety of products and services, that's sponsored
by the rapid boom of the middle elegance. European businesses should be proactive to take complete
gain of these promising possibilities.

Market size and market proportion

Indonesia has a booming economic system and the profits degrees are excessive. In 2016, GDP
amounted to USD 932 billion (EUR 781 billion), whilst actual GDP boom amounted to five.1 percentage. 8
Indonesia is known as the largest economic system in ASEAN and is one of the maximum dynamic
regions within the global. Indonesia’s GDP makes up 36 percent of total ASEAN GDP. Nine Additionally,
Indonesia stands because the sixteenth largest economic system within the global. Meanwhile, it's far
critical to recall that with a total populace of 261 million, Indonesia is the fourth maximum populous usa
within the world.

Nestlé Indonesia has the very best market percentage within the meals and beverage market, leading
inside the dairy and instant noodle classes, working a joint assignment with Indofood Sukses Makmur.12
Other gamers consist of Unilever Indonesia, Charoen Pokphand Indonesia and Mayora Inda. Thirteen
The ingesting elegance is made of fifty five million city and 15 million rural Indonesians.14 Thet are the
most commercially appealing phase. It is expected that 5 million Indonesians will input the city ingesting
marketplace each yr. Consumer expenditure in 2015 amounted to USD 493 billion (EUR 440 billion) and
is predicted to boom by means of 7.7 percent a 12 months resulting in a USD 1 trillion (EUR 893 billion)
possibility by using 2030.15
Total EU exports to Indonesia increased by 13 percent in 2015 compared to 2010. In 2015, the EU’s
share in Indonesian imports was 7.9 percent. Overall, the EU was the 4 th largest exporter to the

Indonesian market in that year. The main exporters to the Indonesian market in 2015 (in terms of
market share) are China (20.6 percent), Singapore (12.6 percent) and Japan (9.3 percent). 19

In 2015, the EU had a considerable trade deficit of EUR 3.6 billion for its agri-food
trade with Indonesia. EU exports of agri-food products to Indonesia amounted to
EUR 735 million, while EU imports of agri-food products from Indonesia amounted to
EUR 4.3 billion. Over the period 2005-2015, the annual rate of change for EU agri-
exports to Indonesia was 9.4 percent compared to 10 percent in the case of EU agri-
imports from Indonesia.20 The top five EU agri- food products exported to Indonesia
in 2015 and their respective export shares were:

1. Milk powders and whey (27 percent);

2. Wheat (9 percent);
3. Food preparations (8 percent);
4. Pet food (6 percent); and
5. Raw tobacco (5 percent).
 COUNTRY RISK OF INDONESIA: ECONOMY

Indonesia is seen as a future economic giant. It is the largest economy in Southeast Asia and the
world's seventh by purchasing power parity. The country hasn't suffered negative GDP growth since
1998, and the economic growth has stabilised around the solid 5% range over the past years; it
decreased to 5.0% in 2019 and is projected to grow slightly to 5.1% in 2020 and to 5.2% in 2021 (IMF
data). The key drivers of the economy are private domestic consumption - stimulated by its huge
market with a growing middle class of nearly 70 million people (55% of GDP), while the major issues
are the ongoing trade tensions between China and the US, the country's two biggest trading partners,
and the prolonged depreciation of the Rupiah.

According to the IMF, the authorities have had early successes in reducing fuel subsidies and in the
expansion of conditional cash transfers and public investment. The budget deficit has been
decreasing over the past few years; it rose slightly to 1.9% in 2019 and the estimations for 2020 (1.8%)
and 2021 (1.8%) are set to remain stable. Inflation was estimated at 3.2% in 2019 and is expected to
remain at the same level in 2020 (3.3%) and 2021 (3.1%), thanks to lower inflationary pressure from the
government-regulated prices. Public debt has shown a significant improvement since the Asian
Financial Crisis in 1998 (150%) of GDP), but it rose slightly to 30.3%% of GDP in 2019. Three social
programmes (RPJMN, PNPM Urban and PAMSIMAS) have been launched to ensure that the poorest
strata of the population have access to healthcare and education. Other structural issues that remain
to be tackled include a large public infrastructure gap, high labour informality and youth
unemployment, and low educational attainment. Environmental protection also remains a major
challenge. The government hopes to take advantage of the country's strategic location between Asia
and the Pacific in the current unfavourable international context (weakening demand from China and
falling commodity prices), and aims to be in the top six largest economies by 2030.

Although it has been decreasing over the last decade and estimates of IMF are optimistic, the
unemployment rate remains relatively high for the region (5.2% in 2019), and many people continue to
work in vulnerable conditions. Indonesia has achieved enormous gains in poverty reduction, cutting
the poverty rate by more than half since 1999, to approximately 9.4% of the population in 2019 (World
Bank data), but the country has still one of the fastest rising inequality rates in the East Asia region
according to World Bank.
 Problems on Opening Restaurant

It requires a lot of paper works to open restaurant in Indonesia. We require appropriate licenses and
permits for the restaurant which will result in closing from local government.
The retail sector which includes hotels and restaurant is changing rapidly as personal income and
consumer spending increased. According to the research by Mckinsey Global Institute, 90 million new
Indonesians are likely to join the consuming the consuming class, making it as big as about 135 million
by 2030.
A large Middle class population will be an important part. This group of people will look for new
restaurants.

Problems faced or the criteria for opening restaurant are as follows-

 Opening a restaurant is quite similar with registering another type of company in Indonesia.

 Founders must set up direct investment company. This is basically a limited liability company
(LLC) called Perseroan Terbatas in Indonesia

 For foreign investors, there is also foreign -owned LLC called PT.

 PMA-Penanaman Modal Asing is a good news for foreigners based on Negative Investment List
2016 , restaurant business can be fully owned (100%) by foreigners
 Solution

 Obtain restaurant licence

 To get restaurant licence application for the registration should be addressed to the tourism
and culture agency at local government where the tourism business is located.

 It could be registered at Regent or Mayor Office except for Special Capital Province of Jakarta
at Governor Office

 The process for registration of tourism Business Cover is-

 Application should be filled for the registration of business cover

 Verification of application

 Inclusion in the list of tourism businesses.

 Issuance of certificates of tourism business registration

 Updating the list of tourism businesses in the event changes in supporting documents

 List of documents need to be prepared to obtain restaurant licence

 Documents required for obtaining Licence

 Filled Application Form

 Copy of company article of association

 Copy of ID/Passport

 Copy of taxpayer registration number

 Copy of Building Permit

 Copy of Disturbance Law

 Copy of Environmental Impact Analysis

 Coloured Picture of business location with size-4R showing front left and right look including
each room inside.

ADDITIONAL DOCUMENTS

 If restaurant is planned to provide alcoholic beverage it is important to get Alcoholic Beverage

Trading Licence (SIUP-MB).

 If Restaurant feature live or pre recorded music it must obtain licenses from label record or
competent foundation that facilitate the use of such material. If fail to do so could trigger
expensive penalities

POLICIES of Indonesia
 Adhi Lukman General Chairman of the Indonesian food and beverage association said the new
policies that burden entrepreneurs in food and beverage industry include Law No. 33/2014 on
the halal product guarantee.

 This law states that all food, pharmaceutical, and cosmetic products that are consumed in
Indonesia to have halal certification (which states that product was prepared according to the
Islamic law.

 This law is regarded as an obstacle to the business and investment climate of Indonesia as it
increases red tape as well as costs because halal certification requires a fee.

 Another policy is excise tax on plastic packaging. Tax of IDR 200 on plastic bottles and
packaging in an effort to boost tax revenue while protecting the environment as well as health
of consumers as tax lead to reduction in consumption of plastic bottles.

 High local gas prices paid by food and beverage industry. It is estimated that energy prices
account for about 12 percent of Food and Beverage industry total production costs.

 For Indonesian food and beverage exporters have to face Higher export taxes.

 Salt import continue to form problem for Indonesia as salt used in food industry constitutes
“consumer salt or individual salt”
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GLOBAL BUSINEES ENVIRONMENT BUSINESS PROPOSAL ADITYA YADAV-19DM019 ; SECTION-A jejke TITLE Indonesian
Restaurant Sector Indonesia’s restaurant and meals franchise area is still present process robust expansion
notwithstanding financial slowdown because of the sluggish family spending within the first semester of 2017 (See
Indonesia’s Second Semester Economic Outlook: Focusing on Investments). Head of Creative Economy Agency Mr
Triawan Munaf revealed that the culinary region stays the biggest contributor to Indonesia’s gross home product (GDP)
among all of the creative economy sectors. Technology development, especially social media and online-based
meals delivery offerings, has helped pressure the boom of this zone by way of increasing client demand and
expanding its reach in addition to consumer base ince 2014, the Indonesian eating place and food franchise region (See
Thirst Quenching: Indonesia’s Food & Beverage Industry) has always recorded remarkable increase supported by using the u
.S

. A .’s elevated in line with capita income and the development of technology which has underpinned modifications
in existence. According to the Jakarta Dining Index researched with the aid of Qraved.Com, the wide variety of high-quit
eating places has grown 250% from 2009 to 2014. In 2013 by myself, Jakarta citizens visited eating places 380 million
times and spent $1.Five billion USD on consuming out. The research found out that eating out has turn out to be
part of everyday social activities among Indonesians whereby they socialise and gather with households, pals, co-
employees, and business companions to foster relationships. This fashion is predicted to keep to head up by 30% within
the quick and medium time period. Other lifestyle changes supporting the growth of Indonesia’s restaurant and food
franchise organizations is the developing fashion amongst people in big towns to work lengthy hours both because of
obligation or honestly to keep away from traffic jams. For these people, the best realistic choice while feeling hungry all
through the night is to order food from eating places. As a end result, Indonesia’s center-elegance are eating less in
their homes and eating out greater. This fashion has been confirmed by in addition research; a examine via Nielsen
confirmed that 11% of Indonesian residents devour out as a minimum as soon as a day. This is better than the
worldwide common of 9%. Food and beverage trade statistics According to data retrieved from the Global Cold Chain
Allian expenditure on food amounted to USD 179 billion (approx. EUR 152,5 billion 2 ) in 2015 and represented
about 36 percentage of overall client expenditure in Indonesia. The per capita spending on meals became recorded
at USD 697 (EUR 594 billion). Forecasts screen that expenditure on food and beverages will steadily increase as much
as 2020. National information screen that such expenditure will increase from just over IDR 2 trillion (EUR 126 million) to
approximately IDR four trillion (EUR 252 million) in 2020.3 In 2015, the EU had a giant change deficit of EUR 3,411
million for its agri-food change with Indonesia. EU exports of agri-food merchandise to Indonesia amounted to EUR 735
million, while EU imports of agri-food products from Indonesia amounted to EUR four,148 million. Over the period 2005-
2015, the annual price of alternate for EU agri-exports to Indonesia turned into 9.4 percent in comparison to 10 percentage
within the case of EU agri-imports from Indonesia. The top 5 EU agri-food export merchandise in 2015 and their respective
export stocks had been: milk powders an
whey (27 percentage), wheat (9 percent), food arrangements (eight percent), puppy food (6 percentage), and raw
tobacco (five percentage).4 It is important to notice that the variety of goods traded between Indonesia and the
European Union is largely complementary. Hence, the economies are considered a really perfect “trading” match. THE
INDONESIAN FOOD AND BEVERAGE MARKET Boasting one of the most important populations inside the international, the
demand for number one items in Indonesia, which includes food and beverage merchandise, could be very excessive.
Importantly, whilst local production of food and drinks is robust, a massive percentage of merchandise nevertheless
have to be imported to satisfy local call for. As a end result, EU producers stand to benefit immensely as client call for
maintains to upward push. Indonesia has amazing marketplace ability for European exporters of branded and
uniqueness food products, in addition to for suppliers of meals components and packaging. 7 Rising disposable earning
tiers have led to accelerated patron spending for a wide variety of products and services, that's sponsored by the rapid
boom of the middle elegance. European businesses should be proactive to take complete gain of these promising
possibilities. Market size and market proportion Indonesia has a booming economic system and the profits degrees are
excessive. In 2016, GDP amounted to USD 932 billion (EUR 781 billion), whilst actual GDP boom amounted to five.1
percentage. 8 Indonesia is known as the largest economic system in ASEAN and is one of the maximum dynamic
regions within the global. Indonesia’s GDP makes up 36 percent of total ASEAN GDP. Nine Additionally, Indonesia stands
because the sixteenth largest economic system within the global. Meanwhile, it's far critical to recall that with a total
populace of 261 million, Indonesia is the fourth maximum populous usa within the world. Nestlé Indonesia has the very
best market percentage within the meals and beverage market, leading inside the dairy and instant noodle classes,
working a joint assignment with Indofood Sukses Makmur.12 Other gamers consist of Unilever Indonesia, Charoen
Pokphand Indonesia and Mayora Inda. Thirteen The ingesting elegance is made of fifty five million city and 15 million rural
Indonesians.14 Thet are the most commercially appealing phase. It is expected that 5 million Indonesians will input the city
ingesting marketplace each yr. Consumer expenditure in 2015 amounted to USD 493 billion (EUR 440 billion) and is predicted
to boom by means of 7.7 percent a 12 months resulting in a USD 1 trillion (EUR 893 billion) possibility by using 2030.15
Total EU exports to Indonesia increased by 13 percent in 2015 compared to 2010. In 2015, the EU’s share in Indonesian
imports was 7.9 percent. Overall, the EU was the 4th largest exporter to the Indonesian market in that year. The main
exporters to the Indonesian market in 2015 (in terms of market share) are China (20.6 percent), Singapore (12.6 percent)
and Japan (9.3 percent).19 In 2015, the EU had a considerable trade deficit of EUR 3.6 billion for its agri-food trade with
Indonesia. EU exports of agri-food products to Indonesia amounted to EUR 735 million, while EU imports of agri-food
products from Indonesia amounted to EUR 4.3 billion. Over the period 2005-2015, the annual rate of change for EU agri-
exports to Indonesia was 9.4 percent compared to 10 percent in the case of EU agri-imports from Indonesia.20 The top
five EU agri- food products exported to Indonesia in 2015 and their respective export shares were: 1. Milk powders and
whey (27 percent); 2. Wheat (9 percent); 3. Food preparations (8 percent); 4. Pet food (6 percent); and 5. Raw tobacco
(5 percent). Problems It requires a lot of paper works to open restaurant in Indonesia. We require appropriate licenses and
permits for the restaurant which will result in closing from local government. The retail sector which includes hotels and
restaurant is changing rapidly as personal income and consumer spending increased. According to the research by Mckinsey
Global Institute, 90 million new Indonesians are likely to join the consuming the consuming class, making it as big as
about 135 million by 2030. A large Middle class population will be an important part. This group of people will look for
new restaurants. Problems faced or the criteria for opening restaurant are as follows- * Opening a restaurant is quite
similar with registering another type of company in Indonesia. * Founders must set up direct investment company. This is
basically a limited liability company (LLC) called Perseroan Terbatas in Indonesia * For foreign investors, there is also foreign
-owned LLC called PT. * PMA-Penanaman Modal Asing is a good news for foreigners based on Negative Investment List 2016 ,
restaurant business can be fully owned (100%) by foreigners Solution * Obtain restaurant licence

* To get restaurant licence application for the registration should be addressed to the tourism and culture agency at local
government where the tourism business is located. * It could be registered at Regent or Mayor Office except for
Special Capital Province of Jakarta at Governor Office * The process for registration of tourism Business Cover is- *
Application should be filled for the registration of business cover * Verification of application * Inclusion in the list of
tourism businesses. * Issuance of certificates of tourism business registration * Updating the list of tourism
businesses in the event changes in supporting documents * List of documents need to be prepared to obtain
restaurant licence Documents required for obtaining Licence * Filled Application Form * Copy of company article of
association * Copy of ID/Passport * Copy of taxpayer registration number * Copy of Building Permit * Copy of
Disturbance Law * Copy of Environmental Impact Analysis * Coloured Picture of business location with size-4R showing
front left and right look including each room inside. ADDITIONAL DOCUMENTS * If restaurant is planned to provide alcoholic
beverage it is important to get Alcoholic Beverage Trading Licence (SIUP-MB). * If Restaurant feature live or pre recorded
music it must obtain licenses from label record or competent foundation that facilitate the use of such material. If
fail to do so could trigger expensive penalities POLICIES * Adhi Lukman General Chairman of the Indonesian food and
beverage association said the new policies that burden entrepreneurs in food and beverage industry include Law No.
33/2014 on the halal product guarantee. * This law states that all food, pharmaceutical, and cosmetic products that are
consumed in Indonesia to have halal certification (which states that product was
prepared according to the Islamic law. * This law is regarded as an obstacle to the business and
investment climate of Indonesia as it increases red tape as well as costs because halal certification
requires a fee. * Another policy is excise tax on plastic packaging. Tax of IDR 200 on plastic bottles
and packaging in an effort to boost tax revenue while protecting the environment as well as health
of consumers as tax lead to reduction in consumption of plastic bottles. * High local gas prices paid
by food and beverage industry. It is estimated that energy prices account for about 12 percent of Food
and Beverage industry total production costs. * For Indonesian food and beverage exporters have to face
Higher export taxes. * Salt import continue to form problem for Indonesia as salt used in food
industry constitutes “consumer salt or individual salt”

Sources

The Food and Beverage Market Entry

but indonesian exports to the eu increased by 6.2 percent
from 2014. furthermore, the eu is in donesia's largest 8
trading partner with which it enjoys a large trade surplus
(eur 5.4 billion in 2 015).overall, the eu was the 4th largest %
exporter to the indonesian market in that year.
Restaurant License in Indonesia: The Process & Requirements
f

opening a restaurant is quite similar with registering another type of

company in indonesia. f ounders must set up a direct investment company.
this is basically a limited liability compan y (llc) called perseroan terbatas 4%
(pt) in indonesia. for foreign investors, there is also foreign-o wned llc...
https://www.cekindo.com/blog/restaurant-licenses-in-indonesia