Introduction
The Indonesian government, through the Investment Coordinating Board (BKPM), has introduced a series of updates under BKPM Regulation No. 5 of 2025 (Perka BKPM 5/2025).
These adjustments refine Investment Realization Reporting (LKPM) procedures and foreign investment requirements, aligning them with the risk-based licensing (OSS-RBA) framework.
The changes aim to increase transparency, data accuracy, and regulatory supervision across all sectors.
Key Adjustments to LKPM Reporting
BKPM Regulation 5/2025 introduces several important modifications that affect how companies — especially Foreign Investment Companies (PMA) — fulfill their LKPM obligations.
The revisions focus on reporting deadlines, exemptions, and investment value criteria.
1. Revised Reporting Deadlines
The new rule harmonizes the LKPM submission timeline for businesses of different sizes and risk categories.
Companies are now required to submit quarterly or semiannual reports, depending on their OSS-RBA classification.
This uniform reporting structure helps BKPM monitor investment realization more effectively and ensures consistent compliance across industries.
2. Narrowed LKPM Exemptions
BKPM has limited the number of businesses exempt from LKPM reporting.
Only micro enterprises and state- or region-funded projects (APBN/APBD) remain excluded.
Previously exempt sectors — such as banking, non-bank financial institutions, and insurance — are now required to report their investment realization through the OSS-RBA system.
This ensures more comprehensive and transparent national investment data.
3. Updated Investment Value Criteria
The regulation reaffirms that foreign investment projects must maintain a minimum investment value exceeding IDR 10 billion per five-digit KBLI and per project location, excluding land and building costs.
This ensures that foreign participation remains focused on large-scale, high-impact investments, while domestic players continue to drive micro and small business sectors.
The rule reflects Indonesia’s commitment to attracting quality, sustainable foreign investment rather than speculative inflows.
Why These Changes Matter for Investors
For PMA companies and foreign investors, these updates carry important compliance implications.
The government’s goal is to simplify processes while enhancing digital oversight through the OSS system.
Investors should:
- Review their OSS-RBA and LKPM reporting schedules;
- Verify that reported values match declared project commitments;
- Assess whether their business qualifies for any LKPM exemption; and
- Coordinate with legal and accounting teams to ensure timely, consistent submissions.
Accurate LKPM reporting remains crucial for eligibility in investment incentives and license renewals.
Strengthening Investment Governance
These revisions under BKPM Regulation 5/2025 represent Indonesia’s continued effort to strengthen investment governance and financial accountability.
By clarifying timelines, narrowing exemptions, and maintaining the IDR 10 billion threshold, the government promotes both ease of doing business and regulatory discipline.
The reforms are designed to create a predictable, transparent, and credible investment environment for global investors.
Conclusion
The updates introduced under BKPM Regulation No. 5 of 2025 strike a balance between simplifying LKPM procedures and reinforcing oversight of foreign investment.
For PMA companies, understanding and adapting to these new reporting requirements — including timelines, exemptions, and minimum investment values — is key to ensuring compliance and maintaining smooth business operations in Indonesia’s evolving investment climate.