Investment Activity Report (LKPM) in Indonesia
Indonesia continues to position itself as one of Southeast Asia’s most attractive investment destinations, supported by strong economic growth, a large domestic market, and progressive regulatory reforms. However, behind these opportunities lies a strict compliance framework that every investor must understand and follow. One of the most critical obligations is the Investment Activity Report, widely known as LKPM (Laporan Kegiatan Penanaman Modal). For foreign investors, business owners, and directors, LKPM is not merely an administrative formality but a legal requirement that directly affects business continuity, licensing validity, and long-term investment security.
What Is LKPM and Why It Matters
LKPM is a mandatory periodic investment realization report for companies operating in Indonesia, including PT PMA and certain domestic entities. It provides the government with up-to-date data on capital realization, workforce absorption, production progress, and business challenges, while also serving as a key instrument to verify whether licensed businesses are actively operating.
Regulated under BKPM Regulation No. 5 of 2021, in line with the Job Creation Law and the OSS-RBA system, LKPM compliance is a legal obligation. Failure to submit accurate and timely reports may result in administrative sanctions, ranging from written warnings to suspension or revocation of business licenses, directly affecting a company’s legal standing in Indonesia.
The LKPM reporting period is as follows:
1. First Quarter: No later than April 10.
2. Second Quarter: No later than July 10.
3. Third quarter: No later than October 10.
4. Fourth Quarter: No later than January 10 of the following year.
Who Is Required to Submit LKPM
Understanding whether your business must submit LKPM is the first critical step. In principle, LKPM applies to:
- Foreign Investment Companies (PT PMA) across all business sectors, including real estate, property development, F&B, manufacturing, trading, and services.
- Domestic Investment Companies (PMDN) with medium to high-risk business classifications under OSS-RBA.
Even companies that have not yet generated revenue are still required to submit LKPM as long as they hold active licenses. For foreign investors in real estate, hospitality, restaurants, or property management, this point is often misunderstood. Many assume LKPM applies only once operations begin, whereas in reality, investment planning and early-stage activities must also be reported.
Penalties for Not Reporting LKPM in Indonesia
Failure to submit the Investment Activity Report (LKPM) is considered a serious compliance violation under Indonesian investment law. LKPM is mandatory and directly supervised by the Ministry of Investment / BKPM through the OSS-RBA system. Companies that ignore or delay LKPM reporting expose themselves to escalating administrative sanctions that can materially affect business operations and investment security.
- Written Warnings
Failure to submit LKPM initially results in a formal written warning issued through the OSS system. The warning is recorded in the company’s compliance profile, and companies are given a limited time to rectify the omission. Repeated warnings increase regulatory scrutiny. - Temporary License Suspension
Continued non-compliance may lead to temporary suspension of business licenses, including operational restrictions, inability to amend or expand licenses, and limited access to OSS services. This can directly disrupt daily operations and commercial activities. - Revocation of Licenses and Investment Approval
Persistent failure to report LKPM may result in full revocation of business licenses, including the NIB and operational permits, as well as cancellation of investment registration. Once revoked, the company is deemed non-operational and must reapply from the beginning to resume business. - Obstacles to Corporate and Legal Actions
Poor LKPM compliance can hinder license amendments, business expansion, expatriate permit processing, banking activities, audits, and M&A transactions, as LKPM status is often reviewed during regulatory and due diligence processes. - Heightened Regulatory Supervision
Inaccurate or missing LKPM reports may trigger closer monitoring or audits by BKPM, requiring explanations for inconsistencies with tax filings or OSS data, increasing legal risk and operational delays—particularly for PT PMA.
How Indoned Consultancy Can Help You
Navigating LKPM regulations can be complex, especially for foreign investors unfamiliar with Indonesia’s legal and bureaucratic environment. Indoned Consultancy provides end-to-end support, including LKPM assessment, data preparation, OSS submission, regulatory alignment, and compliance monitoring. Our legal and investment specialists work closely with entrepreneurs, directors, property developers, F&B operators, and investment consultants to ensure every report is accurate, timely, and strategically aligned with your business goals.
If you are investing, operating, or planning to live and do business in Indonesia, do not leave your LKPM compliance to chance. Contact Indoned Consultancy today for professional guidance and a free initial consultation. Our team is ready to help you secure your investment, maintain regulatory compliance, and grow your business in Indonesia with confidence.
Disclaimer
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.
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FAQ
In general, PMA stands for Foreign Direct Investment while PMDN stands for Domestic Direct Investment. From the perspective of the meaning, in short, PMA is an investment activity to conduct business in the territory of the Republic of Indonesia which carried out by foreign investors, both those who use foreign capital wholly or in joint ventures with domestic investors. Then, PMDN is an investment activity to conduct business in the territory of the Republic of Indonesia which carried out by domestic investors using domestic capital.
Basically, subjects in domestic investors are Indonesian citizens (WNI), Indonesian business entities, the Government of Indonesia, or regions that make investments in the territory of Indonesia. Meanwhile, foreign investors are foreign citizens, foreign business entities, and/or foreign governments making investments in the territory of the Republic of Indonesia.
With the new regulations and system changes, the process of establishing a company, both PT PMDN or PT PMA, does not take a long time. It takes at least 10-15 working days after the complete document requirements are fulfilled.
Yes. To be able to carry out the establishment process of PT PMA, the authorized capital that must be written in the deed of establishment is Rp. 10 billion excluding the value of land and buildings. In making the deed of establishment, the Notary appointed by us will provide a statement letter to the shareholders who sign that they will deposit the said amount of capital. However, the statement will usually not include the fulfillment period. After the company is established, the company will carry out investment reporting on a regular basis which will later become one of the proofs for the company's activities with its capital.
Generally, the set-up company process is divided into 2 stages. Where, the first stage is the establishment stage. Where at this stage, you will process your company's basic documents and permits, such as: deed of establishment, legalization document, Company NPWP (Taxpayer ID Card), Business Identification Number, Company Bank Account Opening and other documents according to your sector and business field. Furthermore, the second stage is the operational stage. At this stage, before and/or during your company's operations, you are required to fulfill the company's obligations. Such as, payment of related taxes, fulfilling operational permits, reporting LKPM (Investment Activity Report), BPJS Employment and Health Registration, and other obligations according to the sector and business field.
BPJS stands for Social Security Administering Board, which is a special institution tasked with administering health and employment insurance for the public, civil servants, and private employees. BPJS has 2 types, namely: BPJS Healthcare and BPJS Employment. Where every registered company that has employees is required to register its employees in the BPJS program, both BPJS Healthcare and BPJS Employment.
LKPM stands for Investment Activity Report. It is a report on the progress of investment realization and problems faced by business actors that must be prepared and submitted periodically.
Yes, you do. When you do the establishment of a company, a correspondence address is fundamental. It is needed because later all correspondence documents from the government or related agencies will be sent to your company's office/correspondence address. In addition, a company is required to have a domicile which is one of the requirements for making a deed of establishment.
Do you have a location in mind where you plan to establish your company in general? For example, are you planning to do it in Bali, such as in Kuta, Ubud, Sanur or Jimbaran area? We have several specific place references that may help you determine the location of your company office. Just please let us know.
At the stage of the company establishment process, you are not required to come to Indonesia. Although it is no required to come, you may visit Indonesia with the visa which the service we can assist you to have it.
Some process in the establishment company can be carried out by giving your power of attorney to one of our team whom handles the process of establishing your company. Our team is experienced enough in their field therefore the necessary matters will be prepared and informed to you.
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