LKPM in Indonesia: Full Reporting Guide

Indonesia is a rapidly developing economy that has become a domestic and international investment magnet. To ensure transparency and accountability in these capital movements, the Indonesian government mandates periodic reporting through a system known as LKPM. 

LKPM (Laporan Kegiatan Penanaman Modal) is an essential part of investment compliance that allows the government to monitor, assess, and regulate investment activities in real-time. Whether you’re an established investor or a newly incorporated company in Indonesia, understanding LKPM reporting is crucial for legal compliance and operational sustainability. 

What is LKPM Reporting? 

LKPM, or Investment Activity Report, is a mandatory compliance document required by Indonesia’s Investment Coordinating Board, known as BKPM. It is designed to track the realization of investments, operational progress, and constraints investors face. Through LKPM reporting, businesses provide details on their financial expenditures, workforce, licensing updates, and overall project development. 

Why Does It Matter? 

Submitting LKPM reports is not merely a bureaucratic formality; it’s a legal obligation. Non-compliance may lead to administrative penalties, project delays, and possible revocation of business licenses. According to BKPM regulations, all foreign and domestic investors must report their investment activities periodically, regardless of size or business phase. 

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Who Needs to File LKPM Reports? 

In Indonesia, the Investment Coordinating Board (BKPM) enforces the legal requirement of LKPM reporting. Businesses that meet specific criteria must submit their Investment Activity Reports through the LKPM Online System using the same credentials (username and password) as the Online Licensing System (SPIPISE). 

Entities Required to Submit LKPM Reports 

The following business entities are obligated to report their investment activities: 

• Business Entities with Investment Over IDR 50 Million: This includes CVs, Firms (Firma), Sole Proprietorships (UD), and Foundations, provided they hold a valid Business Identification Number (NIB). 
• Limited Liability Companies (PT Lokal): All Indonesian-owned private companies with operational licenses are expected to report quarterly. 
• Foreign-Owned Companies (PMA): Companies established under foreign ownership regulations must also comply with periodic LKPM reporting. 
• Representative Offices of Foreign Companies: These include KPPA, KP3A, and similar entities. Although they may not be directly involved in revenue-generating activities, they must still file LKPM if registered under the investment categories. 

Consequences of Non-Compliance 

Businesses that fail to submit their quarterly LKPM reports risk receiving a formal warning letter from BKPM. If a company ignores three consecutive warnings, it may face severe administrative actions, including the revocation or cancellation of business licenses. 

LKPM Reporting Periods and Deadlines 

Understanding when to submit your LKPM report is crucial to complying with Indonesia’s investment regulations. The reporting schedule is structured based on the company’s legal entity type and whether it is in the development or operational phase. 

The LKPM must be submitted every three months for companies still in development. Each quarterly submission follows a strict deadline, as outlined below: 

• January – March Period: Submit the report no later than April 10 of the same year. 
• April – June Period: Submit by July 10 of the same year. 
• July – September Period: The deadline is October 10 of the same year. 
• October – December Period: Submit by January 10 of the following year. 

What Information is Included in An LKPM Report? 

A complete LKPM report must clearly show a company’s investment progress. The required contents are standardized to help the Indonesian Investment Coordinating Board (BKPM) effectively monitor local and foreign investments. Here’s what must be included in every LKPM submission: 

• Status of Business Development: Indicate whether the company is still in construction or has entered commercial operations. 
• Investment Realization: Report the actual value of investments made during the relevant period. 
• Workforce Realization: Include the number of employees hired, reflecting any growth in staffing. 
• Production and Export Figures: Provide data on production output and, if applicable, the value of exports during the reporting period. 
• Partnership and Other Commitments: Document any partnership obligations fulfilled and related responsibilities based on your business license. 

Accurate and timely input of this information ensures smooth compliance and enhances a company’s credibility with regulatory bodies. 

Common Mistakes and Challenges in LKPM Reporting 

Failing to comply with the reporting requirements can lead to severe administrative consequences. Businesses that do not submit their reports within the designated timeline are subject to sanctions enforced by BKPM. Administrative sanctions may include: 

• Official warnings, either in writing or through the online system 
• Restrictions on certain business activities 
• Temporary suspension of business operations and investment-related facilities 
• Revocation of business licenses and investment permits 

Timely and accurate LKPM submissions are essential to keep your operations running smoothly and to avoid these penalties. 

How InCorp Indonesia Can Help with LKPM Reporting 

Timely and accurate filing of LKPM reports is essential for maintaining business compliance in Indonesia. InCorp (an Ascentium Company) simplifies this process by providing professional support for: 

• Accurate preparation and submission of reports 
• Timely compliance with BKPM deadlines 
• Avoiding legal issues and administrative sanctions 

We also provide business setup services to help you establish your company legally and efficiently in Indonesia. Complete the form below to streamline setup and compliance, allowing you to concentrate on running your business.