Business License for Cafe

PERTANYAAN

Our family is planning to start setting up a small cafe in Jakarta, can we apply for a cafe business license through the new OSS? Thank you.

INTISARI JAWABAN

Currently, the business licensing required by business actors (entrepreneurs) depends on the risk level of the relevant business activities, which may be designated as low, medium, or high-risk business activities.

So, which category does the cafe business fall into? And what business licenses are required?

Please read the review below for a further explanation.

ULASAN LENGKAP

This article is an English translation of Izin Usaha untuk Kafe which was written by Dian Dwi Jayanti, S.H. and was published on Monday, 3 April 2023.

This article below is an update of the article entitled Business License for Cafe (Izin Usaha untuk Kafe) which was first written by Easybiz and was first published on Wednesday, 10 November 2021. 

All legal information available on Klinik hukumonline.com has been prepared for educational purposes only and is general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

Business Licensing Systems

It is important to note that prior to opening cafes in Indonesia, the government has now implemented risk-based business licensing in order to support the improvement of the investment climate and business activities.

According to Article 7 section (1) Perppu 2/2022 which has been passed into law on 21 March 2023, risk-based business licensing is carried out based on the determination of risk level and business scale rating of business activities. Determination of risk level and business scale rating is obtained based on hazard level and hazard potential assessments (or: assessments of hazard level and hazard potential).[1]

Based on the level assessment as well as the assessment of the potential for hazards, the business activities' risks and scale ratings are set to be low-risk, medium-risk, or high-risk,[2] with the provisions of business licensing as follows:

1. Low-risk business activities

Business licensing for low-risk business activities is in the form of the granting of a Business Identification Number which constitutes the legality of the implementation of business activities.[3] A Business Identification Numbers is proof of registration of business actors to conduct business activities and as an identity for business actors in the implementation of their business activities.[4]

2. Medium-risk business activities

Business licensing for medium-risk business activities comprises medium-low-risk business activities and medium-high-risk business activities.[5] Business licensing for medium-low-risk business activities is in the form of the granting of Business Identification Numbers and standard certificates in the form of statements of business actors to fulfill business standards in the framework of carrying out business activity.[6]

Meanwhile, business licensing for medium-high-risk business activities is in the form of the granting of Business Identification Numbers and standard certificates issued by the Central Government or Regional Government in accordance with their authorities based on verification results of compliance with business activity implementation standards by Business Actors.[7]

Furthermore, in the event that medium-risk business activities need product standardization, the Central Government shall issue a product standard certificate based on the verification results of standard compliance that must be fulfilled by Business Actors before carrying out product commercialization activity.[8]

3. High-risk business activities

Business Licensing for high-risk business activity is the granting of Business Identification Numbers and licenses, as approval from the Central Government or Regional Governments for the implementation of business activity that must be fulfilled by Business Actors before carrying out their business activities[9]

However, in the event that the high-risk business activity needs a product standardization, the Central Government or Regional Governments shall issue the business standard certificate and product standard certificate based on the verification result of standard compliance. [10]

The business licensing process is conducted through the Online Single Submission ("OSS") system, which according to Article 1 number 21 Government Regulation 5/2021 is Electronically Integrated Business Licensing System managed and organized by the OSS Agency for the implementation of Risk-Based Business Licensing.

Business sectors that are included in the system of OSS Risk Based Approach (“OSS RBA”) are:[11]

1. marine affairs and fisheries;
2. agriculture;
3. environment and forestry;
4. energy and mineral resources;
5. nuclear power;
6. industry;
7. trade;
8. public works and public housings;
9. transportation;
10. health, drug and food;
11. education and culture;
12. tourism;
13. religious;
14. post, telecommunications, broadcasting, and electronic systems and transactions;
15. defense and security; and
16. manpower.

Cafe Business License

According to the Appendix to Regulation of the Central Bureau Statistics 2/2020, the Indonesian Standard Industrial Classification a.k.a. Klasifikasi Baku Lapangan Usaha Indonesia (“KBLI”) code which may be used for cafe business activities are (p. 519):

56303 – Drinking House/Cafe

This category includes any type of business which provides both hot and cold beverages for consumption at the place of business, is located in some part or all of a permanent building, whether or not it is equipped with equipment for the production and storage process, and whether it has obtained a decision letter as a drinking house from the relevant agency who build it, or not

In accordance with Appendix I Government Regulation 5/2021 on the Tourism sector, KBLI code 56303 is included as a low-risk business activity. Therefore, the requirement to open a cafe is to fulfill low-risk business activities. Similarly, the requirements to open a cafe in Jakarta.

Based on the above description, in answer to your question, in order to establish a cafe, you may apply for a business license through the latest OSS system or OSS RBA. Considering that the level of risk for this business activity is low, then the business license used is a Business Identification Number.

Enrich your legal research with the latest bilingual legal analysis, as well as the collection of regulatory translations integrated into Hukumonline Pro, click here to learn more.

These are the answers we can provide, we hope you will find them useful.

Legal Basis:

1. Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation which has been passed into law on 21 March 2023;
2. Regulation of the Government Number 5 of 2021 on the Organization of Risk-Based Business Licensing;
3. Regulation of the Central Bureau of Statistics Number 2 of 2020 on Indonesian Standard Industrial Classification.

---

[1] Article 7 section (2) Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation (“Perppu 2/2022”).

[2] Article 7 section (7) Perppu 2/2022.

[3] Article 8 section (1) Perppu 2/2022.

[4] Article 8 section (2) Perppu 2/2022.

[5] Article 9 section (1) Perppu 2/2022.

[6] Article 9 section (2) jo. section (4) Perppu 2/2022.

[7] Article 9 section (3) jo. section (5) Perppu 2/2022.

[8] Article 9 section (6) Perppu 2/2022.

[9] Article 10 section (1) and section (2) Perppu 2/2022.

[10] Article 10 section (3) Perppu 2/2022.

[11] Article 6 section (2) Regulation of the Government Number 5 of 2021 on the Organization of Risk-Based Business Licensing (“Government Regulation 5/2021”).