An Investment Activity Report, known in Indonesia as a Laporan Kegiatan Penanaman Modal or LKPM, is more than a routine report submitted through the Online Single Submission (OSS) system. Under Regulation of the Minister of Investment and Downstreaming/Head of the Investment Coordinating Board Number 5 of 2025, verified LKPM data is processed through OSS as part of the business actor’s compliance profile. For a foreign investment limited liability company (PT PMA), repeated LKPM non-compliance may trigger three successive written warnings, temporary suspension of business activities followed by an administrative fine, and ultimately revocation of the relevant Business Licensing if the prescribed obligations remain unfulfilled. This Client Alert outlines the applicable obligations, statutory deadlines, reporting components, and key compliance points for PT PMA companies.
I. Why LKPM Is More Than an Administrative Formality
Many PT PMA companies treat LKPM as an administrative task that can be delegated without active oversight. The current regulatory framework leaves little room for that approach: an LKPM must not only be submitted, but is also subject to verification and evaluation.
The reporting obligation is rooted in Article 15(c) of Law Number 25 of 2007 on Capital Investment, as amended, and is implemented within the framework of Government Regulation Number 28 of 2025 on the Implementation of Risk-Based Business Licensing and Regulation of the Minister of Investment and Downstreaming/Head of the Investment Coordinating Board Number 5 of 2025 on Guidelines and Procedures for Implementing Risk-Based Business Licensing and Investment Facilities Through the Electronically Integrated Business Licensing System (Online Single Submission), referred to below as Ministerial Regulation 5/2025.
Four Key Changes Under the 2025 LKPM Framework
A comparison between the previous framework under BKPM Regulation Number 5 of 2021 and the current framework under Ministerial Regulation 5/2025 shows several material changes:
| ASPECT | PREVIOUS FRAMEWORK (2021) | CURRENT FRAMEWORK (2025) |
|---|---|---|
| Reporting deadline | No later than the 10th day of the relevant reporting period | Extended to the 15th day of the relevant reporting period |
| LKPM components | Investment realization, workforce realization, and company obligations | Expanded to include compliance with basic requirements, Business Licensing, and/or Business Licensing to Support Business Activities (PB UMKU) |
| Assessment | No specific LKPM assessment | LKPM is assessed and may affect the business actor’s compliance profile |
| Exemptions | Included certain sectors such as upstream oil and gas, banking, financial institutions, and insurance | Micro enterprises and activities financed through the State Budget or a Regional Budget |
The most significant change is not merely the deadline. Verified LKPM data now contributes to the compliance profile processed through OSS, creating a regulatory track record that may affect the business actor’s future interactions with the authorities.
II. Who Must Report and When: The Reporting Deadlines
The LKPM obligation applies to each business actor for every registered business activity and project location after the Business Identification Number (NIB) is issued. The obligation therefore arises from the issuance of the NIB, not only when commercial operations commence. A PT PMA that remains in the preparation stage may still be required to report.
The reporting frequency and statutory deadlines depend on the applicable business scale:
| LKPM TYPE | BUSINESS SCALE AND BUSINESS CAPITAL | FREQUENCY | STATUTORY DEADLINE |
|---|---|---|---|
| LKPM for small enterprises | Small enterprise (IDR 1-5 billion) | Semi-annual | No later than 15 July and 15 January |
| LKPM for non-micro and small enterprises | Medium enterprise (IDR 5-10 billion) and large enterprise (> IDR 10 billion) | Quarterly | No later than 15 April, 15 July, 15 October, and 15 January |
NOTE FOR PT PMA COMPANIES: Under Article 26(1) of Ministerial Regulation 5/2025, a foreign investment business entity is categorized as a large enterprise unless otherwise provided by applicable laws and regulations. A PT PMA therefore generally submits its LKPM every quarter. Official OSS and BKPM channels announce the opening of each reporting period. Where the deadline coincides with a national holiday, the reporting period is adjusted through an official notification.
III. What Must Be Reported: Two Stages, Different Components
LKPM reporting distinguishes between stages of investment realization. The required components differ materially between the preparation stage and the operational and/or commercial stage, and confusing the two is a common source of error.
A. Preparation Stage
This stage applies while the company has not commenced operational and/or commercial activities. The report covers additional investment realization that has not previously been reported, including land acquisition and preparation, buildings, machinery, equipment and spare parts, and other qualifying preparation costs. Amounts already reported must not be counted again as new realization.
B. Operational and/or Commercial Stage
This stage applies after the company is ready for or has commenced operational and/or commercial activities and has completed the relevant readiness statement through OSS. Additional investment realization at this stage generally concerns additions to fixed capital. Recurring operating expenditure, such as rent, salaries, electricity, and other ordinary operating costs, should not automatically be recorded as additional fixed-capital investment.
COMMON TRAP: Reporting recurring operating expenditure as additional investment realization during the operational stage may lead to verification questions. Working capital represents one turnover of expenditure required for the relevant operation and should not be repeatedly recorded as new realization in every reporting period.
In addition to investment realization, an LKPM records workforce realization and other relevant information. The company should maintain consistency between the LKPM and its supporting records concerning Indonesian and foreign workers, workers at the relevant location, workers with disabilities, production or service realization, basic requirements, Business Licensing, PB UMKU, environmental obligations, partnerships with micro, small and medium enterprises, training and technology transfer obligations, employment and social security obligations, occupational safety and health, and corporate social responsibility. Directors and commissioners are not counted as employees, and a shareholder should not be counted merely because of share ownership.
IV. A Critical Point for PT PMA: Operational Readiness in OSS
Article 286(6) of Ministerial Regulation 5/2025 provides that an operational and/or commercial-stage LKPM is submitted after the business actor completes the statement of operational and/or commercial readiness through OSS. For a PT PMA, the declaration requires careful consideration of the actual readiness of the business activity, the relevant licensing requirements, and the applicable investment-value rules.
- The company is genuinely ready to commence operational and/or commercial activities;
- According to BKPM’s June 2026 LKPM socialization and technical-guidance materials, the OSS reporting workflow directs a business actor to declare operational or commercial readiness if, among other matters, at least 90% of its investment plan has been realized. The 90% figure is not an express requirement stated in Article 286 of Ministerial Regulation 5/2025;
- The relevant basic requirements, Business Licensing, and PB UMKU have been fulfilled; and
- For a PT PMA: the relevant minimum investment and capital requirements have been fulfilled.
Article 26 classifies a foreign investment business entity as a large enterprise. As a general rule, its minimum total investment must exceed IDR 10 billion, excluding land and buildings, for each five-digit KBLI business activity at each project location. This calculation is subject to specific rules and exceptions for certain activities, including wholesale trade, food and beverage services, construction services, industries operating a single production line, property, accommodation, agriculture, plantations, livestock, aquaculture, public electric-vehicle charging stations, and certain activities in special economic zones.
STRATEGIC IMPLICATION: A discrepancy involving the minimum investment requirements may hinder validation in OSS. The assessment must, however, be based on the relevant activity, KBLI code, sector, project location, and any applicable specific rule or exception. IDR 10 billion should therefore not be treated as a single automatic conclusion without reviewing the PT PMA’s actual business structure.
V. Consequences of Non-Compliance: Sanctions and Corrective Steps
Under Articles 373 to 376 of Ministerial Regulation 5/2025, a breach of the LKPM obligation may trigger a progressive administrative-sanction process. The applicable trigger and consequence must be assessed by reference to the project stage and the reporting history of the relevant business activity.
| SANCTION STAGE | TRIGGER OR SEQUENCE | CORRECTIVE STEP UNDER THE REGULATION |
|---|---|---|
| First written warning | Failure to submit an LKPM for two consecutive reporting periods; submission of the first LKPM without additional investment realization for four consecutive reporting periods; or submission of preparation-stage LKPMs without additional investment realization for four consecutive reporting periods. | The warning lapses if the LKPM is submitted in the following reporting period. |
| Second written warning | The LKPM remains unsubmitted in the reporting period following the first warning. | The warning lapses if the LKPM is submitted in the following reporting period. |
| Third written warning | The LKPM remains unsubmitted in the reporting period following the second warning. | The warning lapses if the LKPM is submitted in the following reporting period. |
| Temporary suspension and administrative fine | The LKPM remains unsubmitted in the reporting period following the third warning. The temporary suspension is followed by an administrative fine. | The LKPM must be submitted. If the fine has been imposed, both submission of the LKPM and payment of the fine are required for the suspension and fine to lapse. |
| Revocation of Business Licensing | The LKPM for the following reporting period remains unsubmitted and the administrative fine remains unpaid. | Article 376 does not provide the same automatic lapse mechanism after the relevant Business Licensing has been revoked. |
Each warning lapses if the LKPM is submitted in the following reporting period. A temporary suspension may lapse following submission of the LKPM. Where the suspension is accompanied by an administrative fine, both submission of the LKPM and payment of the fine are required for the suspension and fine to lapse. Article 376 does not provide the same automatic lapse mechanism after the relevant Business Licensing has been revoked.
The history of administrative sanctions may affect the company’s compliance score recorded in OSS and form part of the criteria used to assess the business actor’s profile. The impact may therefore extend beyond one reporting period and should be managed as part of the company’s broader compliance governance.
VI. Seven Common LKPM Errors
The following issues require particular attention when preparing and submitting an LKPM:
- Overlooking a registered Business Activity Number (NKU). Each registered NKU or project entry and each project location should be reviewed for its applicable reporting obligation. If an activity will not be implemented, the company should assess whether the relevant activity should be formally amended or revoked through OSS without liquidating the legal entity.
- Duplicating investment realization. The same land, building, machine, or supporting asset must not be reported more than once under several NKUs. If an asset is used by several activities, the company should apply a reasonable, documented, and consistent allocation method or use another treatment supported by the applicable OSS instructions and the relevant facts.
- Applying depreciation or revaluation. LKPM investment realization is reported using the relevant original acquisition value and does not follow accounting depreciation or revaluation. The company should retain the acquisition and disposal records supporting its reporting treatment.
- Entering incorrect digits. An extra zero or a missing digit can materially distort the company’s investment realization and compliance profile. The report should be reconciled against the general ledger, fixed-asset register, bank records, and supporting invoices before submission.
- Failing to explain workforce changes. Workforce movements should be reasonably consistent with the company’s investment development and operational activities. Material changes should be supported by an adequate explanation and appropriate employment records.
- Misusing the total-accumulation amendment feature. BKPM’s June 2026 LKPM guidance states that the Perubahan Total Akumulasi feature may be used only once for each project or NKU. A full reconciliation should therefore be completed before the feature is used.
- Assuming a later cumulative report eliminates an earlier late filing. Investment realization not previously recorded may be included in a subsequent report in accordance with the applicable LKPM instructions. A later cumulative report does not, however, automatically erase the earlier failure to submit an LKPM by the statutory deadline.
VII. A Four-Step LKPM Governance Framework
A PT PMA should manage LKPM as an ongoing governance process rather than a reactive filing exercise immediately before each deadline:
- Map all NKUs and their realization status. Prepare an inventory of every registered NKU, five-digit KBLI code, project location, reporting stage, and most recent reporting status. Identify inactive or abandoned activities and assess whether a formal amendment or revocation is required.
- Establish a quarterly compliance calendar. Record the statutory deadlines of 15 April, 15 July, 15 October, and 15 January as recurring compliance dates. Assign a responsible person for each project and establish internal cut-off dates before the statutory deadline.
- Reconcile realization data against the company’s records. Confirm that the reported figures are supported by the company’s actual records. Distinguish capital expenditure from recurring operating expenditure and prevent duplicate realization across NKUs.
- Monitor the status after submission. After an LKPM is submitted, OSS issues a submission receipt. The report is then verified and evaluated within the reporting period, no later than three working days after issuance of the receipt. The result is either an approval or a correction request. The business actor should monitor the report’s status and complete any requested correction before the reporting period closes.
Prasetyo Law Office is an Indonesian legal practice based in Jakarta that provides integrated legal services for investment, corporate, commercial, and dispute-related matters. The firm combines regulatory analysis with an understanding of clients’ industries and business objectives to help clients identify and manage legal risk.
For further information concerning this issue, please contact:
Prasetyo Law Office
Infiniti Office, Indonesia Stock Exchange Building, Tower 1 Level 3 Suite 304,
Sudirman Central Business District (SCBD), Jl. Jenderal Sudirman Kav. 52-53, South Jakarta,
DKI Jakarta 12190, Indonesia
Phone: +62 21 5890 5002 (ext. 105)
Email: info@prasetyolawoffice.com
Principal sources: Law Number 25 of 2007 on Capital Investment, as amended; Government Regulation Number 28 of 2025; Regulation of the Minister of Investment and Downstreaming/Head of the Investment Coordinating Board Number 5 of 2025, particularly Articles 26, 285 to 287, 290, and 373 to 376; and the Ministry of Investment and Downstreaming/BKPM materials titled Bahan Tayang Sosialisasi dan Bimtek LKPM Triwulan II 2026, file dated 3 June 2026.
Disclaimer: This publication is provided for general information and educational purposes based on regulations and materials available as of 22 July 2026. It does not constitute legal advice or a formal legal opinion and should not be relied upon as the sole basis for any specific filing, licensing matter, transaction, or dispute. Indonesian regulations, OSS functionality, and administrative practice may change. Advice tailored to the relevant facts and verification of current requirements should be obtained before taking action. Receipt or use of this publication does not create a lawyer-client relationship. If an English translation differs from the official Indonesian text of a regulation, the official Indonesian text prevails.
