If you are doing business in Indonesia or planning a business investment, understanding LKPM (Investment Activity Report) is essential. Many businesses struggle with correct and timely LKPM reporting. Mistakes can lead to LKPM penalties and sanctions or affect your business license.
In this article, we will highlight five common LKPM mistakes to avoid and practical tips for better LKPM compliance in Indonesia.
Why LKPM matters for businesses in Indonesia
The LKPM report helps BKPM (Indonesia’s Investment Board) track the progress of business operations and investment realization. The government ensures that your business investment aligns with the approved plans through these reports.
Here is why it matters:
- Maintain the validity of your business licenses
- Prove ongoing investment activity
- Build transparency with the government
- Identify and resolve issues before audits or compliance reviews
Missing or incorrect reports can lead to issues, including delays or penalties. To protect your business and reputation, submit your investment report in Indonesia correctly and on time.
Read more: A compliance guide about the LKPM Report for your business
Is LKPM reporting mandatory?
This report is mandatory for many businesses in Indonesia, especially those with an investment license from the OSS (Online Single Submission) system.
Any company with a business license issued through OSS must submit quarterly the investment reports in Indonesia, even if there is no investment activity yet. This applies to:
- Foreign-owned companies (PT PMA)
- Local companies with investment licenses
- Companies in early or pre-operational stages
Remember, late submission can delay your next license approval, leading to penalties and sanctions. Ensuring timely submissions is crucial for maintaining business continuity in Indonesia.
5 common mistakes to avoid when reporting LKPM
Many businesses make avoidable mistakes when submitting their investment reports. These errors can lead to rejection, delays, or even problems with your business license, significantly impacting your operations in Indonesia.
Here are the five most common mistakes to avoid:
1. Reporting the wrong period
Some companies confuse the reporting period. Make sure your quarterly investment report covers the correct dates. Double-check your LKPM OSS account to confirm the schedule.
2. Inaccurate financial data
Incorrect investment values or operational costs are big red flags for BKPM reporting. Always verify your numbers before submitting them, especially for foreign capital and asset reporting.
3. Not reporting when there is “No Activity”
Even if your business has yet to start operations, you still need to submit an investment report. Just mark the report as “no activity.” Skipping this step can cause compliance issues.
4. Using the wrong OSS account
Some businesses use a personal OSS account instead of the company account. This mistake can prevent your LKPM online submission from being properly recorded.
5. Late submissions
Submitting through OSS can be delayed, leading to warnings or sanctions. Set reminders for your team and submit ahead of the deadline.
Important things to consider when reporting LKPM
To stay compliant and avoid issues with your online LKPM submission, here are some key points every business should keep in mind:
Use the correct business license
Ensure your OSS business license is active and matches your business activities.
Match data with your financial records
Keep your report figures consistent with your internal financial records. Questions can be raised during audits or inspections if the numbers do not match.
Report on time
Stick to the deadlines—most businesses have quarterly ones. Please set up reminders so you do not miss them. Timely reporting is crucial to avoid penalties and maintain a good standing with the authorities.
Update company info in OSS
Any changes in your business activities or address should be updated in the OSS system. Your company registration details must always match the OSS records, ensuring accurate and up-to-date information for smooth operations.
Partner with a local agency
Working with a trusted local agency can help streamline your LKPM reporting process. They understand the latest BKPM requirements, manage document submissions, and ensure you never miss a deadline. This is especially useful if you are new to business in Indonesia or lack in-house expertise.
Read more: Navigating Business Incorporation in Indonesia
How InCorp simplifies LKPM reporting
LKPM reporting is essential for keeping your business legal and running smoothly in Indonesia. Nevertheless, it can be tricky, especially if you are new to the system or do not have local support.
InCorp Indonesia (an Ascentium Company) offers complete LKPM reporting services to ensure timely report submission without errors. Our expert teams know the rules and care for the details, so you do not have to worry.
With InCorp, you get:
- Quick help with all your investment reports
- On-time submissions via OSS
- Support for local and foreign companies
Ready to invest in Indonesia? Contact us today and let us help you stay compliant and focused on your business growth.
Frequently Asked Questions
What is the most common mistake in LKPM reporting?
Many businesses report the wrong period. Always make sure your quarterly report covers the correct dates listed in your OSS account.
Do I still need to report LKPM if my business has no activity?
Yes. Even if there’s no activity, you must submit a “no activity” report. Skipping this step can cause compliance issues.
Why is accurate financial data important in LKPM reporting?
Incorrect investment values or costs may raise red flags with BKPM and lead to rejection. Always match your report with your financial records.
Can I use my personal OSS account for LKPM reporting?
No. You must use your company’s OSS account. Using a personal account can prevent proper submission.
What happens if I submit LKPM late?
Late submissions can result in warnings or sanctions. Set reminders and submit ahead of deadlines to avoid penalties.
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Disclaimer
The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.
We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.
Verified by
Ales Cina
Consulting Manager at InCorp Indonesia
Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights.
