Guide to Submitting Investment Activity Reports for Non-UMK Businesses
The Investment Activity Report (LKPM) is an administrative obligation that business actors must fulfil as a form of reporting on the progress of investment realisation to the government. Through the LKPM, the government can monitor the implementation of investment activities, identify various obstacles faced by business actors, and formulate policies that support the investment climate in Indonesia.
For non-Micro and Small Enterprises (Non-UMK), LKPM submission is carried out periodically through the Online Single Submission (OSS) system, observing provisions regarding the reporting period, the type of data that must be filled in, and the stage of business activity being undertaken.
Obligation to Submit LKPM
Based on Article 15 of the Investment Law, every investor is obliged to create a report on investment activities and submit it to the Investment Coordinating Board (BKPM). Article 5 letter c and Article 32 paragraph (1) of BKPM Regulation Number 5 of 2021 also affirm that every business actor is obliged to submit an LKPM. The LKPM must be created by the investor for each business sector and/or location.
The obligation to submit a Non-UMK LKPM applies to business actors classified as medium and large enterprises. A medium enterprise is a business actor with business capital of more than Rp5 billion up to Rp10 billion, while a large enterprise is a business actor with business capital above Rp10 billion.
Non-UMK LKPM must be submitted periodically during both the construction and operational stages. Reporting is carried out quarterly: Quarter I from 1–10 April, Quarter II from 1–10 July, Quarter III from 1–10 October, and Quarter IV from 1–10 January of the following year. Business actors must observe this schedule so that reporting obligations can be fulfilled on time.
Components of Non-UMK LKPM
LKPM completion is divided based on the realisation stage, namely LKPM for the construction stage and LKPM for the operational/commercial stage. The following is an explanation.
LKPM Construction Stage
During the construction stage, business actors report the realisation of fixed capital that has been expended, such as land acquisition, construction of buildings, purchase of machinery and equipment, and other costs, for example, feasibility study costs and vehicle rental. Meanwhile, the working capital component at this stage is only filled in once, when the business activity is ready to enter the operational or commercial stage.
LKPM Operational/Commercial (Production) Stage
After the business activity enters the operational/commercial stage, business actors report additional investment realisation in the form of capital expenditure on fixed assets, such as additions of land, buildings, or machinery. Additional working capital realisation, such as the purchase of raw materials, operational costs (electricity and water), and employee salaries, no longer needs to be entered into the production stage LKPM.
Submitting LKPM via OSS
First, access and log in using a registered OSS account with a Mobile Number, Email, Username, or NIB along with a Password.
Select the Reporting menu, then click LKPM Report and press the Create Report button.
Tick the box on the Business Activity Data or Business Activity Number (NKU) to be reported.
Answer the question whether the business activity is ready for operation and/or commercial. Select Yes or No to determine the Report Type (Construction or Production Stage).
Enter the additional value of capital realisation in the reporting period (not the total overall value accumulated manually).
Fill in the additional number of Indonesian and foreign workers during the reporting period (excluding commissioner and director positions).
Select the category and explain the problems faced by the company (optional, can be filled in if there are problems).
Complete the data of the LKPM responsible officer, then tick the statement checkbox (disclaimer), then click Send Report.
Monitor the LKPM status to ensure the obligation is fulfilled.
Administrative Sanctions for Negligence in LKPM Reporting
If a business actor does not comply with the obligation to submit an LKPM, the government may impose tiered administrative sanctions. The forms of these sanctions include:
written warnings (first warning up to fourth warning);
temporary suspension of business activities;
imposition of administrative fines;
imposition of police forcible power; and/or
revocation of basic requirements, business licences and/or business activities.
The sanction is declared void if the LKPM submission obligation is fulfilled. Otherwise, the next administrative sanction will be imposed.
In the event that a business actor is subject to administrative sanctions, these sanctions will be automatically recorded through OSS. The administrative sanctions will reduce the compliance score in the OSS system assessment.