Cafe Business Licensing and Employment of Foreign Chefs in Indonesia

Introduction

Operating a cafe involves more than its concept, menu, and marketing strategy. From a legal perspective, business operators must also ensure that the activities they conduct comply with the applicable business licensing requirements. These obligations become increasingly important where the cafe operator intends to employ a foreign professional, such as a chef from overseas. In such circumstances, business licensing and employment requirements must be satisfied simultaneously.

Indonesia's business licensing system applies a risk-based approach. Under this approach, the type of licence required is determined based on the level of risk associated with the business activity and the scale of the business. Accordingly, before commencing operations, a cafe owner should confirm the classification of its business activities, its business scale, and any additional requirements arising from those activities.

Risk-Based Business Licensing

Risk-Based Business Licensing is regulated under Government Regulation No. 28 of 2025. In principle, business operators must first satisfy the relevant basic requirements before obtaining their business licences. The form of licence issued is then determined according to the assessed risk level of the business activity.

For low-risk activities, business legality generally consists of a Business Identification Number or NIB. For medium-low risk activities, business operators require an NIB and a Standard Certificate based on a declaration of compliance with the applicable business standards. For medium-high risk activities, an NIB is also required, while the Standard Certificate is issued after verification of compliance with the relevant standards. High-risk activities generally require an NIB together with a licence issued by the competent authority before the business activity may commence.

The NIB therefore plays an important role as both the identity of the business operator and the foundation for business legality through the Online Single Submission or OSS system. However, possession of an NIB does not necessarily mean that all licensing obligations have been completed. Business operators must still consider Standard Certificates, supporting business licences, and other applicable sectoral obligations.

KBLI Classification and Cafe Business Requirements

For drinking establishment or cafe activities, the relevant business classification may use KBLI 56303. This classification covers the provision of hot or cold beverages for consumption at the business premises, located in part or all of a permanent building, whether or not equipped with specialized equipment for preparation and storage.

Under the licensing framework for the tourism sector, cafe businesses may fall within the medium-low risk category for micro, small, medium, and large-scale businesses. Accordingly, the principal documents required under this category consist of an NIB and Standard Certificate. In practice, the OSS system will display the obligations applicable to the business based on the activity data, scale, location, and characteristics entered by the business operator.

In addition to the principal business licences, licensing and standards relating to food hygiene and sanitation may also apply. For micro-scale businesses, the applicable requirement may include a Food Hygiene and Sanitation Label, while small, medium, and large businesses may be required to obtain a Hygiene and Sanitation Eligibility Certificate. Where a cafe directly sells alcoholic beverages, the business operator must also consider the relevant licence or certificate requirements based on the classification of the alcoholic beverage and the applicable regional and sectoral regulations.

A cafe must also prepare for the implementation of business standards covering facilities, organizational structure, human resources, services, products, and business management systems. For foreign investment businesses, certification and compliance requirements may differ, and business operators should therefore pay particular attention to the specific requirements displayed through the OSS system.

Employing a Foreign Chef

Employing a foreign chef creates additional legal obligations because the individual is classified as a Foreign Worker or TKA. In general, a TKA is a foreign national holding a visa who intends to work within the territory of Indonesia. A company therefore cannot rely solely on its cafe business licences and must also comply with regulations governing foreign workers and immigration.

Under the regulations governing the employment of foreign workers, the foreign worker to be employed must have education appropriate to the position, competence or at least five years of work experience relevant to the qualifications of the position, and must carry out a transfer of expertise to an appointed Indonesian counterpart worker.

These requirements demonstrate that the employment of foreign workers is generally intended for positions requiring particular competencies while at the same time encouraging the transfer of knowledge to Indonesian workers.

From an immigration perspective, foreign workers employed in Indonesia must hold visas and residence permits that correspond to their purpose of working in Indonesia. Immigration arrangements are closely linked to the employment documents held by the employer. The relevant procedures therefore need to be consistent with the company's information, job position, place of work, and the period for which the foreign worker will be employed.

RPTKA Approval

One of the key documents for an employer engaging a foreign chef is the approval of a Foreign Worker Utilization Plan, known as an RPTKA. In principle, an employer of foreign workers must obtain RPTKA approval from the minister or an authorized official before employing the foreign worker, except in certain circumstances where the applicable regulations provide an exemption.

The period of an RPTKA depends on the nature of the work and the relevant foreign worker employment arrangement. For temporary work, approval may be granted for a maximum of six months and cannot be extended. For work lasting more than six months, approval may be granted for up to two years and may be extended. Certain RPTKA schemes, including those applicable to activities in special economic zones, have their own periods and requirements.

In practice, the administration of foreign workers is connected with several government systems. Employment services are carried out through the TKA Online system, payment of the Foreign Worker Utilization Compensation Fund may be made through the applicable state revenue system, while the company's business legality and information integration remain connected to OSS. Consistency of information across these systems is important to prevent delays in approval, payment, and document issuance.

Matters Business Operators Should Consider

Before opening a cafe, business operators should ensure that the business entity, KBLI classification, location, business scale, and the types of products and services offered are correctly recorded in OSS. Changes to the activities, including the addition of alcoholic beverage sales or the use of foreign workers, may create additional obligations and should therefore not be implemented without first reviewing the applicable licensing requirements.

Where a foreign chef is employed, the employer should also ensure the suitability of the position, the qualifications of the foreign worker, the employment period, RPTKA approval, immigration documents, payment of obligations related to the employment of foreign workers, and implementation of the transfer of expertise program. Failure to comply with business licensing or foreign worker requirements may result in administrative sanctions and interfere with business operations.

Overall, establishing a cafe and employing a foreign chef is permissible under Indonesian law provided that all applicable requirements are satisfied. The legality of the cafe business is centered on risk-based licensing through OSS, while the employment of a foreign chef requires compliance with foreign worker, RPTKA, and immigration requirements. Both aspects should therefore be planned from the early stages of establishing the business so that its operations can proceed in an orderly manner and in compliance with applicable law.