Navigating Indonesia’s Investment Landscape
As global competition intensifies, data becomes more than just numbers. It becomes power. Investment Realization Reporting (Laporan Kegiatan Penanaman Modal/LKPM) has evolved into a cornerstone of Indonesia’s investment governance framework, and now serving as the government’s primary instrument for assessing the true trajectory of investment nationwide. It has long moved past its earlier perception as a bureaucratic formality.
Mandated under Article 15(c) of Law Number 25 of 2007, investors are required to report their investment realization progress to the Indonesia Investment Coordinating Board (BKPM). The framework is designed to improve transparency, accountability, and business continuity, while providing evidence-based data for policy formulation.
Regulatory Transformation
On 1 October 2025, the government enacted a major reform through Minister of Investment and Down streaming or Head of BKPM Regulation Number 5 of 2025 (Perka BKPM 5/2025). This regulation revoked and harmonized prior provisions, including Perka BKPM Number 4 of 2021, 3 of 2021, and 5 of 2021, which governed risk-based licensing and investment facilitation. The update marks Indonesia’s ongoing effort to standardized investment reporting and strengthen data integrity across sectors.
Key Changes
Perka BKPM 5/2025 broadens the scope of mandatory LKPM reporting. Sectors previously exempted, such as banking, insurance, non-bank financial institutions, and upstream oil and gas operations, are now subject to reporting. Exemptions are now strictly limited to micro-enterprises and businesses fully funded by the State or Regional Budget (APBN/APBD). This adjustment enhances the national investment data landscape, allowing authorities to monitor cross-sector activities more effectively.
LKPM must be submitted through the Online Single Submission Risk-Based Approach (OSS-RBA) system, with reporting periods remain tied to business scale classification. Medium and large enterprises are required to report quarterly, while small enterprises report semi-annually. Accuracy and timeliness are critical, directly affects the government’s compliance profiling system which determines supervision levels, facilitation measures, and potential administrative sanctions.
The reporting deadline has been standardized to the 15th of each reporting period. The extension provides businesses with additional time to collect and verify data, ensuring more accurate submissions.
Beyond financial metrics, LKPM must now include workforce absorption, production of goods or services, compliance with basic requirements and business licensing, and operational challenges encountered. This comprehensive approach enables sharper government mapping of business operations and allows more targeted support and oversight.
Foreign Direct Investment Requirements
For Foreign Direct Investment, the regulation stipulates a minimum paid-up capital of IDR 2.5 billion, subject to a 12-month lock-up period, unless utilized for legitimate operational or investment activities. The minimum investment value remains at IDR 10 billion per Indonesian Standard Industrial Classification (KBLI) per project location. These standards ensure that commited capital is genuinely deployed rather than nominally recorded.
Compliance Enforcement
Non-compliance, whether through failure to inject declared capital, neglecting LKPM reporting, or submitting inaccurate data, may trigger administrative sanctions ranging from written warnings to business license revocation. The OSS system digitally records all compliance actions, reinforcing transparency and concistency in regulatory supervision.
Perka BKPM 5/2025 represents a pivotal step in Indonesia’s investment governance reform. By positioning LKPM as a robust, data-driven supervisory instrument, the regulation aims to enhance predictability and competitiveness. For businesses, adherence to these requirements extends beyond regulatory compliance, offering a strategic opportunity to secure better facilitation, and strengthen their position in Indonesia’s dynamic ecosystem. (Shintya)