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Investment Activities Report (LKPM)

Written by Yeni on 08/08/2024
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.

Introduction

An Investment Activities Report (LKPM) is essential for investors and entrepreneurs operating in Indonesia. Mandated by the Indonesian government, it enables the Indonesia Investment Coordinating Board (BKPM) to monitor investment realizations. This regulation supports the country’s efforts to create a transparent and efficient business environment, fostering increased investment opportunities.

Definition

An Investment Activities Report (LKPM), is a detailed account of investment progress and business challenges, submitted periodically. Mandated by UU No. 25 of 2007 Point 15, it requires investors to report investment activities to BKPM and the Investment and One-Stop Integrated Service Office (DPMPTSP) at both provincial and district/city levels. The document is categorized into two phases: the construction phase for businesses not yet in commercial operation and the operational/commercial phase for businesses already in commercial operation.

Depending on the business size, the number of reports required annually varies:

Small Businesses: 2 reports per year (bi-annual submissions)

Medium and Large Businesses: 4 reports per year (quarterly submissions)

Additionally, different sectors may have specific reporting requirements or additional forms that must be completed as part of the submission. These sector-specific reports ensure that the unique aspects and challenges of each industry are adequately monitored and addressed.

The Importance of LKPM

LKPM submission is compulsory for businesses in Indonesia to monitor risk-based business licensing. This requirement underscores the government’s commitment to a transparent and monitored investment environment, ensuring that all businesses contribute to and align with national development goals. Non-compliance can result in follow-up actions from BKPM, highlighting its critical role in maintaining regulatory compliance and fostering a conducive investment climate.

The Benefits of Using Professional LKPM Services

Submitting the report not only complies with Indonesian investment regulations but also serves as a vital communication tool between businesses and BKPM. Companies can report operational challenges, allowing BKPM to provide necessary support and facilitation. This process helps in identifying and addressing business hurdles, fostering a supportive environment for investment and business growth in Indonesia.

The Process of Submitting LKPM

Pre-submission Requirements:

Business Identification Number (NIB) Registration: Register for an NIB online via the official Online Single Submission (OSS) System website.
Access Rights Acquisition: Obtain Access Rights to the LKPM Online platform from BKPM via email or request through the NSWI portal.

Submission Steps:

Login: Access the OSS portal and navigate to the LKPM reporting section.
Stage Selection: Choose between the construction phase (for businesses not yet operating commercially) or the production phase (for businesses in commercial operation).

Construction Phase Reporting:

Investment Realization Reporting: Enter details regarding investment expenditure.
Labour Realization Reporting: Report on the employment of labor, including contract labor.
Challenges Reporting: Document any operational challenges faced.
Submission: Complete the officer in charge section, review the disclaimer, and submit the report.

Production Phase Reporting:

Preparation: Complete a "Production Ready Statement" form on the OSS website.
Operational Details: Report on investment and labor realization, import activities, production, and corporate responsibilities like CSR.
Submission: Follow the same final steps as in the construction phase.

How we Can Help

Putranto Alliance is dedicated to assisting clients in navigating the complexities of establishing and operating a business in Indonesia. Our services are designed to:

Assist Document Submission: Guide businesses through the entire document submission process, ensuring timely and accurate reporting.
Regulatory Updates: Keep businesses informed of the latest legal and regulatory changes to maintain compliance.
Improve Time Efficiency: Handle regulatory requirements professionally, allowing businesses to focus on core activities.
Mitigate Risks: Keep businesses informed of and compliant with the latest legal and regulatory changes.
Support Business Growth and Protection:
Offer services that support the lifecycle of a business from establishment to closure or sale.

FAQs

Can a company correct an already submitted LKPM?

Yes, if the status is “Need Revision,” company must correct submitted LKPM. If “Approved,” corrections must wait until the next reporting period.

What happens if a company is late in submitting the report?

Late submissions are not accepted outside designated times. Companies should aim to report as much investment realization as possible in the next period.

What values are reported in the document?

The LKPM should include the realized value of fixed investments and working capital, based on the initial acquisition cost, without accounting for depreciation or revaluation.

Are LKPM access rights the same as OSS access rights?

Yes, LKPM submissions are accessed through the OSS system, streamlining the process for businesses.

When should the production stage of the document be handled?

Upon completion of the construction phase and when the business is ready for commercial/operational production.

What does the document consist of?

It includes reports for both the construction/preparation stage and the operational/commercial stage, catering to different phases of business operations.

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