Starting A Business in Bali: Your Guide to Opening a Coffee Shop

Starting A Business in Bali: Your Guide to Opening a Coffee Shop

  • InCorp Editorial Team
  • 17 September 2024
  • 7 reading time

Starting a coffee shop in Bali is a good choice because of its simplicity and the profit that will come with it. Plus, who doesn’t like coffee? You can do this in significant parts of the island. The good news is that opening a coffee shop in Bali will require a manageable amount of start-up capital.

We know many foreigners planning on starting a coffee shop in Bali have yet to learn how to begin. All you need to do is to register your business as a small business and acquire the necessary licenses. However, as simple as it sounds, you’ll still work through paperwork and regulations, which might put you on the fence for a second.

But don’t worry. The following guide from InCorp will help you through this so that you can quickly become your boss without hassles.

Prospects of Opening A Coffee Shop in Bali

Starting a coffee shop in Bali can be simple with the proper assistance from a professional, but it is always challenging. If it were, everyone would be doing it. However, the profits you get at the end of the day will be worth your effort.

The thriving economy, the exotic atmosphere, and the burgeoning number of tourists in all seasons contribute to why starting a business in Bali is heaven.

But there are more reasons, as you can see in the following:

  • Ingredients, equipment, workers, and other materials are affordable in Bali.
  • The affordable cost of living in Bali can help keep the cost of starting a coffee shop in Bali much lower, making your venture more budget-friendly.
  • The prices tourists pay in a coffee shop in Bali are the same rates they are used to paying elsewhere, so you can make more significant profits, benefiting from the lower Indonesian currency rate.
  • Rental is much lower than that of Western countries.
  • Wages are also lower than in other Asian countries, making hiring employees very affordable.
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The Process of Opening A Coffee Shop in Bali

Bali is an attractive destination for many entrepreneurs looking to start a coffee shop business, including foreigners. Here’s the process for starting a coffee shop business in Bali for foreigners:

Market Research and Business Plan

  • Determine your ideal customer base (locals, tourists, expats).
  • Assess the existing coffee shops in Bali and identify your unique selling points.
  • Outline your business goals, marketing strategies, financial projections, and operational plans.

Find A Location

  • The location should be easily accessible, have foot traffic, and align with your target market.
  • Ensure the location meets all commercial-use zoning regulations.

Secure A Business License

  • Obtain a business license from the local government.
  • Prepare necessary documents such as passport, visa, proof of address, and business plan.

Obtain Required Permits

  • Ensure compliance with health and safety regulations.
  • If applicable, obtain waste management and environmental impact permits.

Find A Supplier

  • Consider sourcing coffee beans and other ingredients locally to support the local economy.
  • Evaluate suppliers based on quality, price, and reliability.

Interior Design and Fit-Out

  • Create a design that reflects your brand and appeals to your target market.
  • Hire contractors to build the interior of your coffee shop.

Hire Staff

  • Find qualified staff, including baristas, servers, and managers.
  • Provide training on coffee preparation, customer service, and company policies.

Marketing and Promotion

  • Create a website and social media accounts.
  • Utilize local advertising channels, such as newspapers, flyers, and partnerships with other businesses.

Grand Opening

  • Organize a grand opening ceremony to attract customers and generate buzz.
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Registering your business and acquiring the important licenses and permits before starting a coffee shop in Bali is essential. Below are the key steps:

Business Name Registration

Select a unique name for your business and register it with the local authorities.

Formally establish your business as a legal entity. In general, there are two familiar legal entities available for business establishment on the island:

  • PT (Local Company)

PT stands for Perseroan Terbatas in Indonesian. It is a local company that Indonesians must wholly own. Though the setup is simple, it is often not the most preferred choice for foreigners who would like to expand their business to Bali or, in your case, open a coffee shop or a small cafe.

  • PT PMA (Foreign-owned Company)

PT PMA, also known in Indonesian as Perseroan Terbatas Penanaman Modal Asing, is a limited liability company most commonly established by foreign investors. PT PMA allows a foreigner to own a coffee shop.

The good news for foreign investors is that, according to the latest Positive Investment List under the Indonesian Law, foreigners can own 100% of their coffee shops in Bali.

Business Licenses

Obtain the necessary licenses and permits, including:

  • NIB (Nomor Induk Berusaha – Business Identification Number)
  • SIUP (Surat Izin Usaha Perdagangan – Trade Business License)
  • TDUP (Tanda Daftar Usaha Pariwisata – Tourism Business Registration) is generally valid for five years.

Isn’t it good to also sell alcohol and play music in your coffee shop in Bali to attract more customers?

If you are interested in doing so, you must apply for special permits called SIUP-MB and/or NPPBKC for selling alcohol and intellectual property licenses for playing music with copyright.

Tax Registration

Register for a Tax Identification Number (NPWP) and comply with local tax regulations.

The Pros and Cons of Opening A Coffee Shop in Bali

The competitive market and operational complexities of running a business in a foreign country should also be carefully considered.

Pros of Opening A Coffee Shop in Bali

  • Bali attracts millions of tourists annually, creating a consistent demand for quality coffee shops.
  • Bali’s vibrant culture and stunning landscapes offer coffee shops a unique and attractive atmosphere.
  • Coffee shops in Bali can generate revenue with a well-executed business plan and strategic location.
  • Living and working in Bali provides a relaxed and enjoyable lifestyle.

Cons of Opening A Coffee Shop in Bali

  • Bali has a growing number of coffee shops, increasing competition for customers.
  • Tourist arrivals and business activity can fluctuate seasonally, affecting revenue.
  • Managing staff, inventory, and day-to-day operations can be challenging in a foreign country.
  • Adhering to local regulations and obtaining necessary permits can be complex.

3 Common Mistakes of Opening A Coffee Shop in Bali

Many aspiring coffee shop owners make common mistakes when venturing into the Bali market. Avoid these three pitfalls to increase your chances of success.

  • Underestimating Competition: Failing to research the local market and competitive landscape thoroughly can lead to a poorly positioned business.
  • Ignoring Cultural Nuances: Not understanding local customs, preferences, and business practices can hinder success.
  • Overlooking Operational Challenges: Underestimating the complexities of managing a business in a foreign country, such as staffing, logistics, and supply chain issues, can lead to significant problems.

Guide to Doing Business in Bali & Lombok

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Start Opening A Coffee Shop in Bali with InCorp

With InCorp’s expert guidance, you can avoid the pitfalls of starting a coffee shop in Bali. We can help you navigate the complexities of the local market and ensure your business is set up for success.

  • Company Registration: Our team will help you establish a legal entity for your coffee shop and ensure compliance with local regulations.
  • Business License Acquisition: We’ll assist you in obtaining the necessary business licenses and permits, including the TDUP, food and beverage licenses, and any other required permits.
  • Working KITAS: We’ll help foreign investors secure the appropriate working KITAS (Limited Stay Permit) to allow you to operate your business in Bali legally.

Fill out the form below to avoid common pitfalls and make your coffee shop dream a reality.

David Susandi

Branch Manager – Bali Office at InCorp Indonesia

Holding 11 years of experience in various roles, including project manager, operational manager, and corporate strategist, David Susandi is a prominent figure for many entrepreneurial organizations expanding in Indonesia.

Get in touch with us.

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Frequent Asked Questions

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.