For companies, especially Foreign Investment Companies (Perseroan Terbatas Penanaman Modal Asing or PT PMA), understanding how to report LKPM is no longer merely an administrative routine. The Investment Activity Report (Laporan Kegiatan Penanaman Modal or LKPM) has now become a key government monitoring instrument to ensure that investments are implemented according to approved plans.
With the implementation of the latest regulations issued by the Ministry of Investment and Downstream Industry (Kementerian Investasi dan Hilirisasi or BKPM), inaccurate or late reporting may result in serious consequences, ranging from administrative fines to the suspension of business operations.
Through the Online Single Submission Risk Based Approach (OSS RBA) system, all LKPM data serves as the government’s primary reference in assessing business compliance. Therefore, understanding the correct reporting flow, including the overall LKPM reporting process, is essential to keep business licenses active and secure.
Understanding the Latest LKPM Reporting Regulation Changes
The latest regulations introduce several important adjustments that must be considered in how to report LKPM and manage the overall LKPM reporting process effectively. One of the main changes is the reporting deadline, which has now been extended to the 15th of the following month for each quarterly period.
This additional time allows companies to conduct internal data verification to ensure more accurate reporting.
In addition, there is an adjustment to the minimum paid up capital requirement for new PT PMA, which is now set at IDR 2.5 billion. Although this appears more accessible, the total investment value per business field remains above IDR 10 billion per Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia or KBLI) per project location.
This is a common reporting mistake where companies focus solely on paid up capital without gradually demonstrating actual investment realization.
The regulations also introduce a minimum capital retention period of 12 months and stricter sanction mechanisms, including administrative fines and enforcement actions for serious violations.
Proper Classification Between Fixed Capital and Working Capital
One of the main keys in how to report LKPM is correctly classifying investment components. Investments are divided into two major categories:
Fixed Capital (Capital Expenditure or Capex)
Fixed capital includes long term assets such as:
- Land and buildings
- Production machinery and operational equipment
- Pre operational investments such as feasibility studies and licensing
Reported values must be based on actual realization, not planned purchases.
Working Capital (Operational Expenditure or Opex)
Working capital includes:
• Employee salaries
• Raw materials
• Utility and operational costs
What should be reported is the one operational turnover requirement, usually covering the first three months of production.
A frequent mistake is including annual routine operational expenses as fixed investment. This can be considered data distortion by the OSS system and may trigger correction requests.
How to Report LKPM During the Construction Phase
For companies that have not yet commenced commercial operations, reporting is conducted under the Construction or Preparation Phase. Even without production activities, LKPM submission remains mandatory.
Items that can be reported include:
- Processing of additional permits such as Building Approval (Persetujuan Bangunan Gedung or PBG)
- Technical project design progress
- Land preparation activities
- Initial workforce recruitment
The column “Company Challenges” should be filled in detail if there are funding issues, regional licensing obstacles, or technical constraints.
Transparency helps the government understand project conditions and prevents sanctions due to consecutive zero progress reports.
Transition to the Production Phase Through the Ready for Operation Statement
When the company is ready to commence full commercial activities, a crucial step in how to report LKPM is completing the Ready for Operation Statement in the OSS system.
Once transitioned to the Production Phase, reporting includes:
- Realized output of goods or services
- Domestic and export marketing distribution
- Number of active local and foreign workers
At this stage, LKPM compliance often becomes a prerequisite for activating sector specific operational licenses. If reports are rejected or not submitted, subsequent licenses may become inactive.
Reporting by Business Classification and Project Location
LKPM must be submitted based on:
- Five digit Indonesian Standard Industrial Classification (KBLI)
- Project locations registered in the Business Identification Number (Nomor Induk Berusaha or NIB)
For companies with multiple business fields or locations, reports must be separated proportionally. Combining all investments under one main KBLI may cause other KBLI entries to appear inactive and risk receiving official warnings.
Best practice involves allocating investments according to each business activity’s function and proportionally distributing shared assets.
Avoiding Technical Errors When Inputting Investment Figures
Errors in value units or extra zero digits frequently occur. The OSS system applies automatic reasonableness parameters, meaning unrealistically large figures will be immediately flagged as anomalies.
Key tips include:
- Verify whether figures are entered in full Indonesian rupiah (IDR) amounts or in millions of IDR.
- Use the latest financial statement data
- Avoid copying planned investment values identically each period
Investment realization is dynamic. Consistently identical figures may raise compliance concerns.
Understanding LKPM Status in the OSS System
During reporting, several statuses must be monitored:
- Draft: Not yet submitted
- Submitted: Entered the government verification system
- Correction Required: Must be revised before the deadline
- Approved: Officially validated and legally accepted
Ensure reports reach the Approved status to fully fulfill LKPM obligations.
Impact of Administrative Sanctions for Non Compliance
The latest regulations introduce stricter sanctions, including:
- Gradual written warnings
- Business activity suspension
- Administrative fines
- Business license revocation
There is also physical enforcement such as sealing business premises for persistent violations. Therefore, mastering how to report LKPM properly is a vital part of legal risk management.
The Role of Workforce Data in LKPM
The number of local and foreign employees must be reported accurately. Increases in foreign workers are usually associated with additional investment realization, such as machinery installation or facility expansion.
If inconsistencies arise between investment data and workforce numbers, the OSS system may request further clarification. Synchronization between OSS data, shareholder structure, and immigration permits is essential.
The Importance of Company Compliance Profile
Approved LKPM data forms the company’s compliance profile, which affects:
- Priority for further licensing processes
- Opportunities to obtain investment incentives
- Level of government supervision
Companies with low compliance scores face expansion barriers and increased inspections.
Internal Collaboration for Accurate Reporting
Effective how to report LKPM practices require cross department collaboration:
- Finance teams prepare Capex and Opex data
- HR teams provide updated workforce information
- Legal teams manage OSS input and status monitoring
Internal audits before reporting periods are highly recommended to minimize errors.
Continuing to Report Even When Projects Are Suspended
For PT PMA that are temporarily inactive, LKPM obligations remain as long as the NIB is active. Reports can be submitted with zero realization accompanied by detailed explanations of project challenges.
If the company decides to permanently cease operations, formal dissolution procedures must be completed until NIB deletion. Closing operations without legal processes will only leave future sanction risks.
The Role of XPND in Ensuring Secure and Compliant LKPM Reporting
Amid increasing regulatory complexity and higher administrative sanction risks, LKPM reporting can no longer rely solely on technical data input within the OSS system.
Errors in investment classification, lack of data synchronization across departments, and delayed report corrections can directly impact business license status.
This is where XPND acts as a strategic partner for PT PMA in managing LKPM reporting in a comprehensive and structured manner.
With a regulatory compliance based approach, XPND assists companies in ensuring accurate separation between fixed and working capital, reporting investment realization based on actual conditions, and aligning workforce and project data within the OSS system.
Beyond report submission, XPND also supports internal verification processes, continuous LKPM status monitoring until approval, and strategic communication through report notes to minimize sanction risks related to project progress or operational challenges.
This approach enables companies to build strong compliance profiles, maintain active business licenses, and support smooth business expansion across Indonesia.
With professional support from XPND, companies can fulfill LKPM obligations securely, efficiently, and in full regulatory compliance, while focusing on sustainable business growth without administrative risk burdens.
