Opening a café, restaurant or bar in Bali

Introduction

Business in Bali is considered to be a very lucrative and promising endeavor. If you have ever flown here on vacation, you have probably noticed how many cafes, restaurants and bars there are. Many of them are opened not by locals, but by our fellow countrymen and other foreigners. This number is due to the fact that the popularity of Bali as a tourist destination is growing every year. The local government is attracting more and more foreign investment, the economy is actively developing, the flow of tourists increases annually, so the demand for recreation establishments is huge.

Opening your own cafe or bar in Bali requires from entrepreneurs not only considerable investment, but also a good awareness of the differences between local business processes and ours. Where to start, what are the requirements for documents and what difficulties will be encountered? This guide will help you familiarize yourself with all the steps if you are planning to open a restaurant business in Bali.

Step 1: Do your research

Even if you have experience in the city restaurant business, it is unwise to assume that the same restaurant that works very well in the city will do the same in Bali. Everything works different here, and the clients will be completely different. To understand everything from the inside, it is recommended to fly to the island and live here for a few months. During this time, you need to get acquainted with all the tourist areas, analyze where the traffic is higher, study competitors, pay attention to what is in abundance, and what is missing. Pay close attention to those establishments that are always full. The secret of a successful establishment is a hundred percent understanding of its audience and an original approach.

Step 2: Register a company

This is the most difficult step that requires a lot of time and money. Here are the main points of what you need to open a business in Indonesia:

organize all the necessary founding documents (registration with the tax office, obtaining TIN, contract, etc.)

organize a legal address

obtain a number of licenses and permits (for construction, intellectual property for the use of music in the establishment, for hygiene and health care, for the liquor trade, for tourist activities, etc.)

obtain a work visa (ITAS)

open a local bank account

There are different requirements and application forms for each type of document. The good news is that a company can be registered remotely through a consulting agency such as ours.

Step 3: Choose a location

A well-chosen location for your establishment is already half of the success because where there is more traffic there are more customers. Let's talk about the main areas in Bali, that are popular among tourists.

Seminyak - an elite neighborhood with a beach line, a large number of cafes and restaurants, is known for its expensive villas

Kuta - an area with a large concentration of bars and clubs, the center of Bali's nightlife, business in this area guarantees you a stream of customers at night

Jimbaran - a quieter neighborhood, there are a lot of exotic and fish restaurants here

Ubud - the creative center of the island, surrounded by rice fields and jungles

Changgu - lots of cafes and bars, but no sidewalks, close to the street with frequent traffic jams.

 

Which neighborhood to choose is up to you, but keep in mind that the more popular the neighborhood, the more competition there is. Think carefully about the concept of your place, work out the menu, and attract visitors with an original interior.

Step 4: Find a property

Under Indonesian law, foreigners cannot own land, but can only rent or lease it. With the help of online ads, real estate agents or by searching locally yourself, you choose a suitable property or land and inspect it for suitability. You should always do a legal check to make sure that the transaction is clean and that no third parties have rights to the place. The following difficulties are worth preparing for:

when buying real estate by a foreigner there are a number of restrictions, it is necessary to consult with specialists

the locals have their own mentality and many may be reluctant to cooperate, for example, not answering the phone, not coming to meetings or constantly postponing them

due to the bias against foreigners, prices for real estate can be very high, you need to know how to bargain

Balinese do not speak English well, so the language barrier can be a hindrance, it is better to use the services of an interpreter

Step 5: Start your business and don't forget about taxes

All the steps are completed, but before starting a business in Bali, you need to understand your tax obligations. Since 2022, the fixed tax rate is 20%, typically applied to net profit, although there are special tax treaties for certain taxable items.

The income tax for renting land and buildings is 10%, and about 2.5% for property transfers. In addition, there is VAT with rates ranging from 5% to 15%. Small businesses are not required to register for this tax, provided that the company’s annual income does not exceed 4.8 billion IDR.

Conclusion

Thus, the answer to the question of whether it is possible to open a business in Bali for a foreigner is an absolute yes. By going through all these steps and opening your own place, you get great prospects on an actively developing tourist island, where there is no seasonality and therefore endless streams of tourists. Creating a business from scratch is an exciting but long way, filled with experiments, work on mistakes and risks. If you do not want to waste time building a business from the beginning, and would prefer a ready-made, proven and working business model - our consulting agency provides an opportunity to buy a ready-made business in Bali. You will get all the resources and knowledge you need to successfully launch your enterprise. Contact us for more details, we will be happy to answer all your questions!

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