LKPM (Laporan Kegiatan Penanaman Modal) Reports for Foreign Investment

What is LKPM? (Laporan Kegiatan Penanaman Modal / Investment Activity Report)

LKPM is a mandatory report that must be submitted by Foreign Investment Companies (PMA) and Domestic Investment Companies (PMDN) in Indonesia. This report serves as a monitoring and evaluation tool for the government to ensure that investment activities comply with applicable regulations. The LKPM provides an overview of investment realization, operational performance, and the economic impact of these investment activities.

The LKPM is regulated by the Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM), which is responsible for overseeing and facilitating investment activities in Indonesia. This report is a crucial instrument for maintaining transparency and accountability in investment activities.

Relevant Articles and Regulations Related to LKPM

The following are some of the key articles and regulations governing LKPM:

1. Law No. 25 of 2007 on Investment
   • Article 22: States that every business entity is required to submit periodic investment activity reports to BKPM.
   • Article 32: Explains administrative sanctions for businesses that fail to fulfill reporting obligations.
2. BKPM Regulation No. 5 of 2021 on Guidelines and Procedures for Investment Activity Reporting
   • Details the procedures for preparing, filling out, and submitting LKPM.
   • Specifies the types of information to be reported, such as investment realization, workforce, and production performance.
3. Government Regulation No. 24 of 2018 on Electronically Integrated Business Licensing Services
   • Regulates the use of the Online Single Submission (OSS) system as the platform for LKPM reporting.
   • Establishes the obligation for businesses to adhere to reporting deadlines.
4. Regulation of the Minister of Investment/BKPM No. 4 of 2021 on Investment Implementation
   • Explains sanctions and legal consequences for companies that fail to comply with LKPM reporting obligations.

Why is LKPM Important for PMA Companies?

For PMA companies, LKPM is not just an administrative obligation but also a strategic tool to:

1. Build Trust: Accurate and timely reporting demonstrates a company’s commitment to legal compliance and transparency.
2. Facilitate Access to Government Incentives: Compliant companies have a greater chance of obtaining fiscal or non-fiscal incentives from the government.
3. Monitor Business Performance: LKPM helps companies evaluate investment realization and operational performance periodically.
4. Avoid Sanctions: Compliance with reporting obligations prevents companies from facing fines or administrative sanctions.

Contents of LKPM: What is Reported?

LKPM includes various important details about a company’s investment activities, such as:

1. Investment Realization: The amount of funds invested during the reporting period.
2. Production Performance: Volume of production and sales of goods/services.
3. Export-Import: Data on exports and imports conducted by the company.
4. Workforce: Number of employees hired, including details of local and foreign workers.
5. Technology Usage: Information on technology used in the production process.
6. Environment and CSR: Activities related to environmental sustainability and corporate social responsibility.

LKPM Reporting Process

1. Reporting Frequency:
   • Monthly: For companies with large investments or in specific industries.
   • Quarterly: For companies with medium-sized investments.
   • Annually: For companies with small investments.
2. Reporting Platform:
   LKPM is submitted through the Online Single Submission (OSS) system, which is integrated with BKPM. Companies must have an OSS account to access this system.
3. Reporting Deadlines:
   • Monthly LKPM: By the 10th of each month.
   • Quarterly LKPM: By the 10th of the month following the end of the quarter.
   • Annual LKPM: By January 10th of the following year.
4. Sanctions for Late Submission:
   Companies that delay or fail to submit LKPM may face administrative sanctions, such as written warnings, fines, or even revocation of business licenses.

Tips for PMA Companies in Preparing LKPM

1. Use an Integrated System: Ensure that financial and operational data is well-documented to facilitate reporting.
2. Monitor Regulatory Changes: Stay updated with the latest regulations from BKPM or the government.
3. Work with Professional Consultants: Engaging experienced legal or accounting consultants can help ensure compliance and accuracy in reporting.
4. Train Your Internal Team: Ensure your team understands the reporting process and the importance of LKPM.

Why Choose Us?

We are a trusted partner to assist PMA companies in fulfilling LKPM obligations and navigating investment regulations in Indonesia. With a team of experienced experts, we offer:

• Regulatory Consultation: Assistance in understanding the latest regulations on LKPM and PMA.
• LKPM Preparation: Comprehensive services, from data collection to report submission via the OSS system.
• Risk Management: Identification and mitigation of compliance-related risks.
• 24/7 Support: Our team is ready to assist you whenever you need help.

Don’t let reporting obligations hinder your business growth. Contact us today for fast, accurate, and reliable LKPM solutions!

With proper compliance, you can focus on business development while building strong relationships with the Indonesian government.