“Business Actors must do LKPM Report in the stipulated reporting period. Since the second quarter of 2022, LKPM reporting is no longer through the link https://lkpmonline.bkpm.go.id/ or SPIPISE, but directly through the OSS Risk Based Approach system in the reporting section, where data submission to make LKPM reports is done through OSS.”
To run a business, Business Actors certainly need capital. At the beginning of the establishment of a company, Business Actors have determined the capital to run their business and submit the data of capital on the OSS system. For the business process of each business, Indonesia Investment Coordinating Board (“BKPM”) requires Business Actors to report their investment every certain period through the Investment Realization Report.
The obligation for Business Actors to report their investment is stipulated in Article 15 letter c Law No. 25 of 2007 concerning Investments (“Law 25/2007”) that mentioned: “Every investor shall have obligations: c. to make a report on investment activities and submit it to the Investment Coordinating Board”.
Moreover, this Investment Realization Report is also regulated in BKPM Regulation Number 5 of 2021 concerning Guidelines and Procedures for Supervision of Risk-Based Business Licensing (“BKPM Regulation No. 5 of 2021”).
1. Definition of Investment Realization Report
Based on Article 1 Number 20 BKPM Regulation No. 5/2021, Investment Realization Report (“LKPM”) is a report on the progress of Investment Realization and problems faced by Business Actors that must be made and submitted periodically.
Based on Article 5 letter c BKPM Regulation No. 5/2021, submission of LKPM is mandatory for Business Actors. Furthermore, Article 32 of BKPM Regulation No. 5/2021 stipulated that LKPM must be submitted by Business Actors for each business field and/or location through the OSS system. Submission of LKPM refers to Business Licensing data, including changes to data listed in the OSS system according to the current period.
2. Business Actor who is obliged to do an Investment Realization Report
Based on Article 32 of BKPM Regulation No. 5/2021, LKPM submission is mandatory for small, medium and large enterprises. Business Actors who are not required to submit LKPM are micro and upstream oil and gas business actors, banks, non-bank financial institutions, and insurance.
Based on Article 11 and 12 paragraphs (3) BKPM Regulation Number 4 of 2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities (“BKPM Regulation No. 4/2021”), Micro, Small, Medium, and Large Enterprises can be described as follows:
a. Micro Enterprises: Have a business capital of up to a maximum of IDR 1 Billion excluding land and buildings for business premises;
b. Small Enterprises: Having a business capital of more than IDR 1 Billion up to a maximum of IDR 5 Billion excluding land and buildings for business; and
c. Medium Enterprises: Have a business capital of more than IDR 5 Billion up to a maximum of IDR 10 Billion excluding land and buildings for business.
Meanwhile, Large Enterprises have a minimum business capital of IDR 10 Billion.
3. Types of Investment Realization Report
As regulated in Article 32 of BKPM Regulation No. 5/2021, LKPM reports for small enterprises are not divided into several types of reports. Meanwhile, the types of LKPM reports for medium and large enterprises consist of:
a. LKPM construction/preparation stage for business activities that are not yet in production and/or commercial operation; and
b. LKPM operational and/or commercial stages for business activities that are already producing and/or operating commercially.
4. The Reporting Period of Investment Realization Report
Article 32 BKPM Regulation No. 5/2021 stipulates that the LKPM reporting period for small enterprises is carried out every 6 (six) months in 1 (one) reporting year. The reporting period for small enterprises is as follows:
a. The first semester report is submitted no later than the 10th of July of the year concerned; and
b. The second semester report is submitted no later than the 10th of January of the following year.
Meanwhile, for medium and large enterprises, the LKPM reporting period is carried out every 3 (three) months (quarterly) with the following reporting period provisions:
a. The first quarter report is submitted no later than the 10th of April of the year concerned;
b. The second quarter report is submitted no later than the 10th of July of the year concerned;
c. The third quarter report is submitted no later than the 10th of October of the year concerned; and
d. The fourth quarter report is submitted no later than the 10th of January of the following year.
5. Reporting of Investment Realization Report (through OSS)
As stipulated in Article 32 paragraph (2) BKPM Regulation No. 5/2021, LKPM submitted online through OSS RBA system on the website oss.go.id.
The Ministry of Investment began to socialize the submission of LKPM through OSS RBA system on June 29, 2022. Previously, LKPM could be reported through SPIPISE or the website https://lkpmonline.bkpm.go.id/. LKPM reporting can be done by filling out reports directly through SPIPISE or through OSS in the reporting section which will later be directed to SPIPISE to then make LKPM reports by filling in the required data. For now, LKPM reporting is no longer through SPIPISE, but directly through OSS in the reporting section where data submission to make LKPM reports is directly done through OSS. Currently, to see the status of LKPM whether it has been approved or needs revision and LKPM data that has been previously reported, it can be viewed through the OSS system directly without need to be directed to the SPIPISE website.
Moreover, step by step to submit LKPM through OSS RBA System are as below:
- Login through the website oss.go.id
- Click the Reporting menu à LKPM Report à Reporting
- Click create reporting
- Checklist the box on the left of the business activity section, then click next
- If the business activity is in the production stage, click “yes/ya” option on the pop-up asking whether the business activity is ready for operation and commercial. If the business activity still in the construction stage, click “no/tidak” option
- Fill in the data in the LKPM form
- Submit LKPM
6. Sanctions for not Reporting the Investment Realization Report
Based on Article 46 of BKPM Regulation No. 5/2021, for business actors who do not carry out their obligations to submit LKPM reports, administrative sanctions may be imposed in the form of:
a. Written warning;
b. Temporary Suspension of Business Activities;
c. Revocation of Business License; or
d. Revocation of Business License to Support Business Activities.
Author: Vania Aqilla Cahyaningrum
Gaffar & Co., an Indonesian Boutique Law Firm specializing and focusing on commercial law areas e.g. investment regulatory and corporate secretarial.
For further queries and information, contact us:
+62 811 877 216 | info@gaffarcolaw.com | www.gaffarcolaw.com
