Introduction
The Indonesian government, through the Investment Coordinating Board (BKPM), has issued a major regulatory update under Head of BKPM Regulation No. 5 of 2025 (Perka BKPM 5/2025).
This new framework — part of the BKPM Regulation 5/2025 paid-up capital PMA Indonesia regime — serves as a derivative of Government Regulation No. 28 of 2025 (PP 28/2025) on the Implementation of Risk-Based Business Licensing. It replaces the previous structure under PP No. 5 of 2021.
The regulation refines Indonesia’s risk-based licensing system, introducing several key adjustments, including Investment Realization Reporting (LKPM) updates and new paid-up capital requirements for Foreign Investment Companies (PMA Companies).
Background: Transition from PP No. 5/2021 to PP No. 28/2025
PP No. 28/2025 modernizes Indonesia’s risk-based licensing model by improving coordination between ministries and agencies through the Online Single Submission (OSS) platform.
The issuance of Perka BKPM 5/2025 is part of this broader transition, providing the technical framework to ensure alignment between investment procedures, reporting, and capital regulations.
In practice, these updates are designed to streamline processes, enhance transparency, and strengthen Indonesia’s position as a competitive investment destination in Southeast Asia.
Moreover, the unified OSS-based ecosystem ensures that business licensing, risk assessment, and investment reporting now operate under one coherent digital system.
Key Update: Lower Paid-Up Capital for PMA Companies
One of the most notable policy changes introduced under Perka BKPM 5/2025 is the reduction of the minimum paid-up capital for PMA companies — from IDR 10 billion to IDR 2.5 billion.
This adjustment allows small and medium-scale foreign investors to enter the Indonesian market more easily, while maintaining the same minimum investment value.
Despite this reduction, the minimum investment threshold remains above IDR 10 billion per business field (five-digit KBLI classification) and per project location, excluding land and buildings.
Therefore, the BKPM Regulation 5/2025 paid-up capital PMA Indonesia framework maintains strong financial standards while encouraging broader participation among investors.
Broader Regulatory Implications
The impact of Perka BKPM 5/2025 extends beyond capital adjustments. It introduces a set of refinements that affect operational and reporting obligations for businesses, such as:
- Investment Realization (LKPM) Reporting: Updates on submission timelines and content requirements.
- Manpower and Expatriate Reporting: Improved coordination between BKPM and the Ministry of Manpower.
- Sectoral Integration: Enhanced alignment between ministries through the OSS system.
These reforms aim to enhance compliance oversight while simplifying the overall operational process. As a result, companies under risk-based categories can expect more transparent and predictable procedures.
Impact on Foreign Investors
For foreign investors and multinational enterprises, the BKPM Regulation 5/2025 paid-up capital PMA Indonesia reform brings several key implications:
- Simplified Capital Structuring: Investors can now incorporate PMA entities with a minimum paid-up capital of IDR 2.5 billion.
- Consistent Investment Requirement: The minimum total investment value remains above IDR 10 billion.
- Enhanced Reporting Obligations: Accurate and timely LKPM submissions are now more critical than ever.
- Regulatory Continuity: Existing PMA companies remain valid but must align future filings with the new OSS standards.
Together, these changes strike a balance between investment accessibility and governance discipline, ensuring both investor flexibility and regulatory control.
Conclusion
Perka BKPM 5/2025, issued as a derivative of PP No. 28/2025, represents a major milestone in Indonesia’s evolving investment landscape.
By reducing the paid-up capital for PMA companies to IDR 2.5 billion while retaining the minimum investment threshold above IDR 10 billion, the government demonstrates its commitment to inclusive growth and regulatory efficiency.
For both new and existing investors, understanding these changes under the BKPM Regulation 5/2025 paid-up capital PMA Indonesia framework is essential. Adapting early will help ensure strategic alignment, regulatory compliance, and smooth market entry within Indonesia’s risk-based OSS ecosystem.