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An Investment Activity Report [LKPM]: An Obligation for PMA Company

“The purpose of LKPM serve as means of conveying report on investment realization and communication between BKPM and business actors, including the PMA Company.”

Law Number 25 of 2017 on Capital Investment (“Investment Law”) has obliged all business actors to create Investment Activity Report (“Laporan Kegiatan Penanaman Modal” or “LKPM”) and submitted to Indonesia Investment Coordinating Board (“Badan Koordinasi Penanaman Modal” or “BKPM”) in quarterly. The purpose of LKPM serve as means of conveying report on investment realization and communication between BKPM and business actors, including the PMA Company. 

Definition and Types of LKPM

Following Regulation of BKPM Number 7 of 2018 on Guidelines and Procedures for The Implementation of Investment Control (“RB 7/2018”), LKPM is a report on investment realization’s development and problems faced by business actors which submitted periodically. Nevertheless, LKPM has except the company that conducts business activity in the financial service, insurance, banking, and oil gas sector. Those business sectors had specific regulation on the periodic report under its authorized institution. 

Furthermore, the submission is conducted through lkpmonline.bkpm.go.id with credentials that obtain upon the business’s registration in Online Single Submission (“OSS”). The periodic of delivering the LKPM report, are as follows: 

 PeriodDate
Quarter IJanuary – March1 – 10 April current year
Quarter IIApril – June1 – 10 July current year
Quarter IIIJuly – September1 – 10 October current year
Quarter IVOctober – December1 – 10 January next year

Moreover, RB 7/2018 and Guidelines of Online LKPM (issued by BKPM), has divided 2 (two) types of LKPM which consist of:

  1. For a business activity which is not yet in commercial production (construction).

A business actor is on construction phase to prepare the business’s need, for example, construction of building/factory, land purchase, purchase of machinery, and contractor cost.

  • For business activity in commercial production (production) which already conveys the readiness in commercial production/operation.

A business actor is ready to sell products according to its production.

Contents of LKPM

There are several aspects which must be reported in LKPM and can be categorized according to its types which as follows:

ConstructionProduction
Investment realizationEmployees condition during the report periodMachinery and equipment realizationProblems faced by a business actor (if any)Investment realizationGoods and supplies import realizationEmployees condition during the report periodProblems face by a business actor (if any)Goods/service productionCompany obligation

Hereafter, the LKPM must be reported according to the registered business field at each project location.

Activity Report for Foreign Company Representative Office

According to RB 7/2018, 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 July next year. The activity report contains activity realization and information about employee condition.

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:

  1. First and last written caution and/or access rights blocking, if not deliver the LKPM for 3 (three) consecutive reporting period.
  2. Revocation of capital investment license and/or investment facilities, if business actor does not respond to the written caution within 30 days from the date of caution issuance.

Author: Kristalia Andiani Puteri

Gaffar & Co., Indonesian Boutique Law Firm which specializing and focus on commercial law areas include capital market and financial services.

For further queries and information, please contact us:

+62- 21 2271 8638  | +62 – 811 877 216 |  info@gaffarcolaw.com | www.gaffarcolaw.com

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