Introduction
Following the issuance of BKPM Regulation No. 5 of 2025 (Perka BKPM 5/2025), the Indonesian government has lowered the minimum paid-up capital for Key Foreign Investment Companies (PMA) from IDR 10 billion to IDR 2.5 billion.
Despite this adjustment, PMA companies are still required to meet the minimum investment realization value and to document both financial components — paid-up capital and investment value — accurately in their corporate and OSS licensing records.
This regulatory shift aims to simplify administrative entry for investors while maintaining strong compliance standards across Indonesia’s investment landscape.
Key Requirements in PMA Legal Documentation
Under the new regulation, PMA companies must ensure that their legal and licensing documents clearly reflect two core financial components:
1. Paid-Up Capital in the Articles of Association
Each PMA company’s Articles of Association (Anggaran Dasar) must specify a minimum paid-up capital of IDR 2.5 billion.
This figure represents the amount shareholders are required to contribute upon company establishment and serves as the basis for corporate structuring and equity division.
2. Investment Value in the OSS System
In addition to corporate documentation, companies must also declare their investment value through the Online Single Submission (OSS-RBA) system.
This value must exceed IDR 10 billion per five-digit KBLI business field and project location, excluding land and building costs.
Together, these two elements distinguish administrative capital used for incorporation from investment value commitments used for government monitoring and reporting.
Ongoing Obligation to Realize and Report Investment
Although the paid-up capital threshold has been lowered, PMA companies remain obligated to realize and report their investment activities exceeding IDR 10 billion per KBLI and project.
This obligation is fulfilled through the LKPM (Investment Realization Report) submitted periodically to BKPM.
The LKPM serves as a verification mechanism to ensure that declared investments are genuinely implemented and aligned with regulatory commitments.
Failure to comply — including non-reporting or failure to meet realization targets — may result in administrative sanctions, such as license suspension or limited access to OSS services under the risk-based licensing framework.
Administrative Simplification, Compliance Reinforced
While the capital reduction policy aims to simplify administrative processes and attract more diverse investors, it does not weaken compliance standards.
All PMA companies must continue to:
- Maintain transparent financial reporting;
- Keep their OSS data updated in line with the new capital provisions;
- Ensure accurate disclosures in their Articles of Association; and
- Submit LKPM reports within the prescribed deadlines.
This dual approach preserves the balance between ease of doing business and investment accountability, supporting a more transparent investment environment.
Importance for Foreign Investors
For both new and existing investors, compliance begins with accurate documentation.
A well-structured capital record combined with consistent OSS reporting demonstrates good governance and improves investor credibility during audits or licensing renewals.
Legal advisors and corporate secretaries should regularly review and reconcile all PMA documents — including deeds of establishment, Articles of Association, and OSS filings — to ensure full alignment with Perka BKPM 5/2025 requirements.
Conclusion
The enactment of BKPM Regulation No. 5/2025 provides greater flexibility by reducing the minimum paid-up capital to IDR 2.5 billion.
However, every PMA company must still declare and realize investment values exceeding IDR 10 billion per business field and project, and report those through LKPM.
By aligning legal documentation and OSS reporting, companies ensure compliance, avoid administrative risks, and strengthen their credibility in Indonesia’s growing and transparent investment ecosystem.