KH Friend, the Ministry of Investment / Investment Coordinating Board (BKPM) urges business actors, both Foreign Investment (PMA) and Domestic Investment (PMDN) to immediately submit the Investment Activity Report (LKPM) maximum on January 15, 2024. That’s right, less than seven days left. LKPM is an obligation that must be fulfilled by all business actors. Where LKPM itself is a report containing information about the progress of investment realization and problems faced by business actors. This report must be prepared and submitted regularly with the provisions stated in Article 1 of BKPM Regulation No. 5/2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Supervision. So, what is meant by LKPM? Who is required to report LKPM and what are the provisions? Check out the full explanation here.
What is LKPM?
Investment Activity Report or LKPM is a report on the progress of investment realization and problems faced by business actors that must be made and submitted periodically. This LKPM reporting obligation has been stipulated through Law No. 25 of 2007 concerning Investment and BKPM Regulation No. 5 of 2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Supervision (PBKPM 5/2021). The purpose of LKPM reporting is as a source of information on the development of investment realization per sector and location on a regular basis, a source of information on the development of employment, a source of information on problems faced by investors, and one of the sources of information considered in policy making. Because LKPM reporting is one of the important data components that need to be included in the business activity development monitoring subsystem (OSS). So that it becomes a mandatory document that business actors need to report periodically. In addition, the LKPM submitted must cover several aspects, in accordance with Article 29 paragraph (4) of PBKPM 5/2021. Some aspects that must be included in the LKPM include:
- Investment realization.
- Workforce realization.
- Production realization, including export value.
- Partnership obligations and other obligations related to the implementation of investment activities.
Who is Required to Report LKPM?
In principle, every investor or business actor has the obligation to make an LKPM report and send it to the Investment Coordinating Board (BKPM), except in several situations stipulated in Article 32 paragraph (5) of PBKPM 5/2021. These situations include:
Micro business actors
Micro businesses that meet the maximum business capital criteria of IDR 1 billion are not required to submit LKPM.
Specific company
There are several types of companies that are also not required to submit LKPM. These types of companies include upstream oil and gas, banking, non-bank financial institutions, and insurance.
Companies with inactive principle license, investment registration, and/or business license
Companies that have an inactive or expired principle license (IP), investment registration (PI), and/or business license (IU) are also not required to submit LKPM.
When Should Business Actors Report LKPM?
In accordance with the provisions of Article 32 of PBKPM 5/2021, LKPM reporting must be carried out periodically by businesses in accordance with the following regulations:
- Businesses with an investment value above IDR5 billion are required to submit LKPM every three months (quarterly) during the one-year reporting period.
- For small businesses with an investment value between IDR1 billion and IDR5 billion, the LKPM submission period is every six months during the one-year reporting period.
The LKPM reporting period differs between small businesses and medium/large businesses, and the provisions are as follows:
Small business owners
- The first semester report must be submitted no later than July 10 of the year in question.
- The second semester report must be submitted no later than January 10 of the following year.
Medium/large business actors
- The first quarter report must be submitted no later than April 10 of the relevant year.
- The second quarter report must be submitted no later than July 10 of the year in question.
- The third quarter report must be submitted no later than October 10 of the relevant year.
- The fourth quarter report must be submitted no later than January 10 of the following year.
Therefore, in accordance with these provisions, the BKPM has appealed to business actors to submit LKPM for the fourth quarter (October-December) or second semester (July-December) 2023. BKPM Special Staff, Tina Talisa said that this can be done from December 20, 2023 to January 15, 2024.
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Furthermore, Tina explained that LKPM reporting is carried out through the OSS system and has the principle of self-declaration, where business actors have full power in filling in the progress of their own investment realization.
Not reporting LKPM, there are sanctions!
In accordance with Article 47 of PBKPM 5/2021, business actors who do not submit LKPM for two consecutive periods will be subject to administrative sanctions in the form of written warnings consisting of:
- The first written warning will be given within 30 days after the violation occurred.
- If the business actor still does not submit LKPM after the first written warning, a second written warning will be given within 15 days after the first written warning.
- If the business actor still does not submit LKPM after the second written warning, the third written warning will be given within 10 days from the date the warning letter is sent through the OSS System and the notification is received by the business actor via electronic mail.
If such a situation occurs, the business actor is required to respond to the warning letter through the OSS System and/or comply with the obligations, responsibilities, and/or other provisions stipulated in laws and regulations (Article 56 paragraph (3) PBKPM 5/2021). If the business actor does not take action to correct the violation, the business actor will be subject to administrative sanctions in stages. The sanctions can be in the form of first and last written warnings, or in more serious cases, temporary suspension of business activities (Article 57 paragraph (6) PBKPM 5/2021).
KH Contact
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