Category: Compliance Services
Written by Yeni on 23/06/2022
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.
An investment activity report is an investor/entrepreneur’s obligation when they do business activity in Indonesia. This is one of the regulations of business establishment in Indonesia aiming to ease the Indonesia Investment Coordinating Board (BKPM) in monitoring the developments of investment realization.
In 2020, recorded in the Ease of Doing Business Index (EODB), Indonesia was 73rd ranking in the world with the most business-friendly regulations. As a result, business opportunities in Indonesia increases significantly compared to several last years. To increase foreign investment, the Indonesian Government attempt to improve the services and the governance in each priority indicator.
With this service, we can help you to file an Investment Activity Report (LKPM) which is required by the Government to monitor investment, manpower absorption, and to make/amend regulations.
An investment activity report called LKPM is a report – related to the development of investment realization and the challenging of the business – which is created and submitted periodically. According to UU No. 25 of 2007, Point 15, describes that investors have to create a report statement about investment activity and submit it to Indonesia Investment Coordinating Board (BKPM), Investment and One-Stop Integrated Service Office (DPMPTSP) province, and DPMPTSP districts/cities.
In addition, LKPM consists of two phases (construction phase and operation phase) that are generated based on investment realization. LKPM construction/preparation stage for business activities that have not yet been produced and/or operated commercially; and LKPM operational and/or commercial stage for business activities that are already producing and/or operating commercially.
Based on Indonesia Investment Coordinating Board (BKPM) Regulations No. 5 Of 2021 about Guidelines And Procedures For Monitoring Risk-Based Business Licensing, entrepreneurs/companies are required to submit the investment activity report for each business field and/or location. All companies should apply to create a business license and get a business license number (NIB) to generate the investment activity report. When they have a business license, they are allowed to do their business activity in Indonesia.
Additionally, a business that originates from either domestic investment or foreign investment must report LKPM quarterly or for a half-year term. LKPM should be submitted online using the Online Single Submission System (OSS). If there is a business that does not report LKPM according to the reporting period, BKPM will follow up by sending a memo.
Moreover, those who need to submit the investment activity report are all companies, except:
Businesses are categorized into five groups:
Aside from submitting investment realization reports, LKPM also functions as communication between BKPM and entrepreneurs/companies. The company can convey the problems faced by the business activities in the column “Problems Faced by the Company.” If deemed necessary, BKPM will follow up and facilitate company problems submitted through LKPM.
Putranto Alliance aims to help clients increase their business value, improve time efficiency, and mitigate risk while in compliance with the prevailing regulations. Our professionals make it easier for local and foreign investors to succeed in executing their business plans. We can help you establish your new business, ensure you are compliant, prepare your human resources, manage your property, grow and protect your business, and if necessary, arrange for the sale or closure of your business.
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