Investment Activity Report (LKPM) is an obligation for every business actor. Reporting on investment activities is divided based on the scale of the business which is every 6 months for small business actors, every 3 months for medium and large business actors. Reporting on this activity is excluded for micro business actors, companies in the upstream business sector oil and gas, banking, non-bank financial institutions, and insurance.
Investment Activity Report (LKPM) is obligated for every business actor as stated in Law no. 25 of 2007 on Capital Investment (“Investment Law) as amended through Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation (“Perppu 2/2002”), and further regulated through Regulation of BKPM Number 5 of 2021 on Guidelines and Procedures for The Supervision of Risk-Based Business Licenses (“RB 5/2021”).
Overview of Investment Activity Report
According to RB 5/2021, LKPM is a report on the progress of investment realization and problems encountered by business actors that must be reported and submitted periodically, which must submit LKPM online are all business actors, except micro business actors, companies in the upstream business sector oil and gas, banking, non-bank financial institutions, and insurance.
LKPM is carried out in accordance with the provisions of LKPM reporting (Article 32 paragraph (4) RB 5/2021), that is for small business actors every 6 months in 1 reporting year and for medium and large business actors every 3 months (quarterly).
The criteria for small business actors are to have business capital of more than IDR 1 billion up to a maximum of IDR 5 billion excluding land and buildings for business premises. Reporting period for LKPM small business actors:
| Period | Date | |
| Semester I | January – June | 1-10 July Recent Year |
| Semester II | July – December | 1-10 January Next Year |
The criteria for medium business actors are to have business capital of more than IDR 5 billion up to a maximum of IDR 10 billion excluding land and buildings for business premises, while for business actors’ large companies have business capital of more than IDR 10 billion excluding land and buildings for business premises. Reporting period for LKPM medium and large business actors:
| Period | Date | |
| Quarter I | January – March | 1-10 April Current Year |
| Quarter II | April – June | 1-10 July Current Year |
| Quarter III | July – September | 1-10 October Current Year |
| Quarter IV | October – December | 1-10 January Next Year |
Two Types of LKPM and Online LKPM Reporting Procedures in RB 5/2021
- Business activities in the construction stage or those that have not started commercial production. A business actor in the construction stage prepares his business needs, for example, the construction of a building/factory, purchases of land, and others, which in essence builds and prepares the needs of the company.
- Business activities in the production stage or already carrying out commercial production, companies that are ready to sell products according to their production.
Online LKPM Reporting Procedure in 2023:
In general, the procedures for reporting LKPM through the OSS website (https://oss.go.id/) the stages in LKPM reporting can be described as follows:
- LKPM Reporting
- LKPM Sent
- Verification Process
- LKPM needs improvement which will be returned to the first stage
- LKPM has been improved and can be continued to the next stage
- LKPM Approved
There are several aspects that must be reported in LKPM and can be categorized according to its types which as follows:
| Construction | Production |
| 1. Investment realization 2. Employees’ condition during the reporting period 3. Machinery and equipment realization 4. Problems faced by a business actor (if any) | 1. Investment realization 2. Goods and supplies import realization 3. Employees’ condition during the reporting period 4. Problems faced by a business actor (if any) 5. Goods/service production 6. Company obligation |
Activity Report for Foreign Company Representative Office
According to RB 5/2021, the Foreign Company Representative Office (“Kantor Perwakilan Perusahaan Asing” or “KPPA”) must submit an activity report to BPKM every six (6) months, with report period at last on 10 July current year and 10 January next year. The activity report contains activity realization and information about employee conditions.
Nevertheless, LKPM has except the company that conducts business activity in the financial service, insurance, banking, and oil gas sector.
Sanctions
Administrative sanctions can be imposed on a business actor that does not deliver LKPM to BKPM in accordance with the periodic above. The administrative sanctions are as follow:
- First, Second, and Third warning letter if not deliver the LKPM for 2 (two) consecutive reporting period and/or do not report the LKPM for the first time without any additional investment realization for 4 (four) consecutive reporting period with 0 (zero) realization value
- First and Last written caution
- Temporary Suspension of Business Activity
- Revocation of Business License.
Author: Adam Kausar
Gaffar & Co., an Indonesian Boutique Law Firm specializing and focusing on commercial law areas e.g. investment regulatory & corporate secretarial.
For further queries and information, contact us:
+62 811 877 216 | info@gaffarcolaw.com | www.gaffarcolaw.com
