What is LKPM?
The Investment Activity Report (Laporan Kegiatan Penanaman Modal or LKPM) is a periodic report that must be submitted by business actors, including Foreign Investment Companies (PMA), to provide information on the progress of investment realization and challenges encountered during a specific period. LKPM serves as a tool for government supervision and evaluation of investment activities in Indonesia.
The legal basis for LKPM reporting is regulated in:
- Article 15 of Law Number 25 of 2007 concerning Investment, which requires business actors to submit investment activity reports.
- Regulation of the Investment Coordinating Board (BKPM) Number 6 of 2020 concerning Guidelines and Procedures for Controlling Investment Implementation, which details the procedure for submitting LKPM in Article 10.
Who is Required to Submit LKPM?
According to Article 10 of BKPM Regulation Number 6 of 2020, the obligation to submit LKPM applies to:
- Business actors with business licenses issued through the Online Single Submission (OSS) system, both PMA (Foreign Investment) and PMDN (Domestic Investment).
- Companies that have started construction, production, or commercial operations.
However, exceptions apply to micro businesses with an investment value below IDR 50 million and certain sectors such as upstream oil and gas, banking, and insurance.
To Whom is LKPM Submitted?
LKPM is submitted to:
- The Investment Coordinating Board (BKPM) as the main institution managing investment data in Indonesia.
- The Regional Investment and One-Stop Integrated Services Office (DPMPTSP) at the provincial/regency/city level if local reporting obligations apply.
When is the LKPM Reporting Period?
- Article 10 paragraph (5) states that the reporting period depends on the investment value:
- Investment value of IDR 50 million to IDR 500 million: Reporting every 6 months (semiannually).
- Investment value of IDR 500 million to IDR 10 billion: Reporting every 3 months (quarterly).
- Investment value above IDR 10 billion: Also quarterly reporting.
- Article 10 paragraph (6) letter c regulates the submission schedule for semiannual reports:
- Semester I: No later than July 10.
- Semester II: No later than January 10 of the following year.
- Article 10 paragraph (8) regulates the submission schedule for quarterly reports:
- Quarter I: No later than April 10.
- Quarter II: No later than July 10.
- Quarter III: No later than October 10.
- Quarter IV: No later than January 10 of the following year.
- Annual Reporting Period:
- Annual reporting is not explicitly regulated for regular LKPM. However, some additional reports, such as special activity reports (e.g., for foreign construction companies or certain sectors), may have an annual period as stipulated in the relevant articles.
What Documents Are Required for LKPM Reporting?
The following documents are generally required for LKPM reporting:
- Business License and Location Permit.
- Financial Statements (if available).
- Investment Realization Details:
- Information on investment value, capital usage, and procurement of equipment.
- Supporting Operational Documents:
- Examples: work contracts, project progress reports, or other documents relevant to the company’s activities.
How to Report LKPM?
- Registration on the OSS System:
- Business actors must have an OSS account to access the LKPM reporting services.
- After logging in, select the LKPM reporting menu.
- Filling Out the LKPM Form:
- Fill in information related to company identity, investment realization, and any obstacles faced during the reporting period.
- Ensure that the data entered reflects the actual conditions.
- Uploading Supporting Documents:
- Upload supporting documents such as business licenses, financial statements, and other relevant documents as requested by the system.
- Submitting LKPM:
- After verifying that the data is correct, submit the LKPM through the OSS system.
- Business actors will receive a receipt confirmation.
- Monitoring and Follow-up:
- If there are any issues or corrections, the government will notify through the OSS system.
- The company must promptly follow up according to the given instructions.
What are the Sanctions for Not Reporting LKPM?
- Article 49 paragraph (2): Administrative sanctions as referred to in paragraph (1) are imposed in the following ways:
a. Written warning;
b. Restriction of business activities;
c. Suspension/temporary termination;
d. Revocation;
e. Cancellation;
f. Closure of Administrative Branch Office; and/or
g. Imposition of administrative fines. - Article 50 paragraph (1) stipulates that administrative sanctions in the form of a written warning are imposed on business actors if:
- They do not submit the LKPM as stipulated in Article 10 paragraph (1).
- They submit LKPM for the construction phase without any additional investment realization value for four consecutive reporting periods without explaining the barriers or constraints.
The format and procedure for issuing a written warning are further regulated in Article 49 paragraph (2).
The Role of a Gestor in Preparing LKPM
A gestor or consultant plays a strategic role in assisting PMAs in fulfilling their LKPM reporting obligations, especially if the company faces administrative or technical challenges. Here are some benefits of using a gestor’s services:
- Regulatory Compliance:
- The gestor ensures that the report is prepared in accordance with applicable regulations, thereby avoiding administrative sanctions.
- Efficiency of Time and Resources:
- By using a gestor’s services, the company can focus on its core business operations without being burdened by the complexities of preparing LKPM.
- Resolution of Technical Issues:
- Experienced gestors can help solve technical problems that often arise when using the OSS system.
Conclusion
LKPM is a mandatory report for business actors, including PMAs, to provide information on investment realization and encountered problems, serving as a government supervision tool. LKPM must be submitted by business actors who have licenses from the OSS system and have started construction or commercial operations, except for certain micro businesses and special sectors such as upstream oil and gas and banking. The report is submitted to BKPM or the relevant DPMPTSP according to the regulations, with the reporting period depending on the investment value, either semiannual or quarterly, and specific deadlines. Supporting documents must be prepared, and the report must be submitted accurately through the OSS system to avoid administrative sanctions.