Indonesia has taken another step toward improving its investment climate with the introduction of Minister of Investment / BKPM Regulation No. 5 of 2025 (Perka BKPM 5/2025). This landmark regulation reshapes the way businesses report their investment activities, particularly through updates to the Investment Activity Report (LKPM) system and foreign investment (PMA) requirements.
The new rules aim to strengthen transparency, compliance, and accountability while aligning Indonesia’s investment governance with global standards. For both domestic and foreign investors, Perka BKPM 5/2025 marks a new chapter of disciplined, data-driven supervision and sustainable business operations.
1. What Is Perka BKPM 5/2025 and Why It Matters
Officially enacted in October 2025, the new regulation replaces BKPM Regulation No. 5 of 2021 and consolidates various prior amendments into one comprehensive framework. It provides updated procedures for risk-based business licensing and investment facilities through the OSS-RBA (Online Single Submission – Risk-Based Approach) system.
Key highlights include:
- Extended and standardized LKPM reporting deadlines
- Updated reporting obligations and exemptions
- Revised foreign capital and investment thresholds
- Stricter self-declaration and sanction mechanisms
- Clarified definitions of investment values based on KBLI codes
In essence, Perka BKPM 5/2025 modernizes how investment activities are reported and monitored—ensuring better data integrity and government oversight.
2. Extended LKPM Reporting Deadlines
The government has extended the LKPM submission deadline from the 10th to the 15th day of the reporting month, giving companies more time to prepare accurate data.
For Medium and Large Enterprises (Quarterly):
- Q1: April 15
- Q2: July 15
- Q3: October 15
- Q4: January 15 (following year)
For Small Enterprises (Semiannual):
- Semester I: July 15
- Semester II: January 15 (following year)
Reports are now mandatory through the OSS-RBA system, and manual submissions are no longer accepted. This digital-only policy ensures seamless data integration and real-time policy monitoring.
3. Who Must Submit LKPM Reports
All business entities conducting investment activities—both domestic (PMDN) and foreign (PMA)—are required to submit LKPM periodically.
Exemptions apply only to:
- Micro enterprises, with assets ≤ IDR 1 billion or annual sales ≤ IDR 2 billion
- Projects funded by government budgets (APBN/APBD)
Unlike previous regulations, no industry exemptions remain—meaning that sectors such as banking, insurance, and energy must now report their investments.
4. Updated Foreign Investment (PMA) Rule
Minimum Investment Value
Each project under a 5-digit KBLI code must have a minimum investment value above IDR 10 billion (excluding land and buildings).
Minimum Paid-Up Capital
A minimum paid-up capital of IDR 2.5 billion per company (PT PMA) is required, and these funds must remain in the company account for at least 12 months after placement.
Sanctions for Non-Compliance
All data must be self-declared via OSS-RBA. False declarations, premature fund withdrawals, or investment shortfalls may result in fines, license suspension, or revocation.
These tighter capital rules ensure that foreign investors maintain a long-term financial presence in Indonesia, promoting genuine and sustainable investments.
5. Business Implications and Adaptation Strategies
Companies must prepare for significant administrative and strategic adjustments under Perka BKPM 5/2025:
- Revise internal reporting systems to meet new LKPM deadlines.
- Financial and energy sectors must establish formal reporting through OSS-RBA.
- Foreign investors must demonstrate stronger capital commitment.
- Project structuring should consider minimum thresholds per KBLI and location.
- Strengthen compliance monitoring to avoid sanctions.
Firms that comply proactively will gain greater credibility, smoother licensing processes, and investor trust.
6. Compliance Best Practices
| Area | Recommended Action |
|---|---|
| Data Systems | Integrate ERP or accounting software with OSS-RBA for automatic reporting. |
| Internal Deadlines | Set submission targets a week before the official due date. |
| Capital Management | Keep required capital untouched for 12 months. |
| Project Planning | Combine small projects under one KBLI to meet the IDR 10 billion rule. |
| Audit & Legal Review | Conduct quarterly internal audits and seek legal advice on complex cases. |
7. Case Example: Foreign Manufacturing Investor
A foreign manufacturing company investing IDR 8 billion in a project would no longer qualify as a compliant PMA under the new regulation. To proceed, it must:
- Increase total investment above IDR 10 billion;
- Deposit IDR 2.5 billion paid-up capital for at least 12 months;
- Report all data via OSS-RBA.
Failing to comply could lead to license denial or administrative penalties.
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8. Frequently Asked Questions
Q: Do Representative Offices (KPPA) need to submit LKPM?
A: Generally no, unless they engage in profit-generating activities.
Q: When does the new rule take effect?
A: It became effective in October 2025, replacing Perka BKPM 5/2021.
9. Conclusion: Strengthening Transparency and Trust
Perka BKPM 5/2025 is more than a policy update—it’s a strategic reform toward a transparent, accountable, and globally competitive investment ecosystem.
By embracing OSS-RBA reporting, adhering to capital thresholds, and meeting submission deadlines, businesses can strengthen their credibility, compliance, and investor confidence.
As Indonesia continues to attract record foreign investment, adapting early to this regulation is key to thriving in the country’s dynamic economic landscape.
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