For some business actors, the issuance of NIB (Nomor Induk Berusaha) and business licensing through the Online Single Submission (OSS) system is often regarded as the final stage of the legality process. Once the license is obtained, business owners' attention usually shifts directly to sales, marketing, and business expansion.
In fact, holding a business license carries ongoing obligations (post-licensing compliance). One crucial obligation that is often overlooked is the submission of the Investment Activity Report (LKPM).
Many business actors are not yet aware of the magnitude of the risk and sanctions for not reporting LKPM in OSS if they ignore this obligation. Supervision of business licensing is now digitally integrated. Non-compliance or late reporting can result in administrative sanctions, operational suspension, up to the most fatal risk of permanent revocation of the NIB and business license.
What Is LKPM?
The Investment Activity Report (LKPM) is a periodic report on the progress of investment realization, employment absorption, production capacity, as well as the obstacles faced by business actors. Reporting is done online through the supervision subsystem on the official OSS portal.
In general, the information that must be reported in the LKPM includes:
- Fixed Capital Realization: Expenditures for land acquisition, building/office construction, purchase of machinery, vehicles, and operational equipment.
- Working Capital Realization: The company's operational expenditures during the current reporting period.
- Employment Absorption: The number of Indonesian Workers (TKI) and Foreign Workers (TKA) employed.
- Production & Marketing Realization: Details of production activity volume and sales value of goods/services.
- MSME Partnership: Realization of cooperation with local micro, small, or cooperative businesses.
- Business Problems: Technical, regulatory, sectoral licensing constraints, as well as other field obstacles experienced.
Stages of LKPM Reporting
LKPM reporting is differentiated based on the stage of business development:
- Construction/Preparation Stage: Applies to business activities that are still in the process of construction, renovation, equipment procurement, or not yet commercially operating. The focus of reporting lies in the realization of the initial investment value.
- Production/Operational Stage: Applies to business activities that have started producing or serving consumers commercially. The focus of reporting shifts to production capacity, turnover, and routine operations.
Who Is Required to Report and When Is the LKPM Reporting Deadline?
All business actors that have obtained an NIB and business license are required to submit LKPM in accordance with risk-based licensing supervision regulations (Risk-Based Approach). However, the obligation and frequency of reporting are differentiated based on business scale:
- Micro Enterprise: Exempted from the obligation to submit LKPM.
- Small Enterprise: Required to submit reports every 6 months (Semiannually).
- Semester I: January–June period.
- Semester II: July–December period.
- Medium & Large Enterprise: Required to submit reports every 3 months (Quarterly).
- Quarter I: January–March period.
- Quarter II: April–June period.
- Quarter III: July–September period.
- Quarter IV: October–December period.
Stages of Gradual Sanctions for Not Reporting LKPM
The government applies strict supervision of LKPM compliance. Violations of the reporting schedule will be subject to administrative sanctions in stages:
- Written Warning: Given 3 consecutive times through the OSS system. Business actors are given a deadline to immediately complete or correct the report.
- Temporary Suspension of Business Activities: If the warning letter is not followed up, OSS will freeze licensing access and temporarily halt business operations.
- Revocation of Business License: The most severe stage of sanctions where the NIB, business license, and the company's compliance status are permanently revoked.
How to Report LKPM Through the OSS System
The LKPM reporting process is carried out independently through the OSS supervision subsystem with the following steps:
- Access the OSS Portal: Log in to the company's OSS account using the registered Access Rights.
- Select the Reporting Menu: Navigate to the Reporting âž” LKPM menu.
- Determine the Project/KBLI: Select the business activity or KBLI number to be reported.
- Fill in the Realization Data: Enter the figures for realized fixed capital, working capital, and labor in accordance with the company's actual conditions.
- Include Business Constraints: Explain the investment or licensing obstacles faced (if any).
- Submit & Monitor Status: Review the draft report, click Submit, then monitor its status until verified by the relevant ministry/agency.
Why Is LKPM Reporting Very Important for Business?
In addition to avoiding administrative sanctions, submitting LKPM provides strategic benefits for the company:
- Means for Facilitating Constraints: The government can provide assistance or facilitation for resolution if the company reports sectoral licensing obstacles.
- Legal Due Diligence Requirement: A clean LKPM compliance track record becomes one of the crucial documents during legal audit due diligence, banking cooperation, or the entry of new investors.
- Maintaining Legality & PKP Status: Keeping all licenses active so that operations, invoicing, and the obligation of the Annual SPT can run smoothly.
FAQ on LKPM Reporting
Are micro enterprises required to report LKPM?
Micro enterprises are exempt from the obligation to submit LKPM. However, business actors are still required to ensure that the business scale classification on the NIB is in accordance with the initial working capital.
If the business has no sales yet or is still in preparation, must it still report?
Yes. For the small, medium, and large business categories, activities still in the construction/preparation stage are still required to report LKPM by including the realization of the initial investment capital that has been spent.
Is LKPM reporting subject to a fee?
No. LKPM reporting through the official OSS portal is free of charge.
What should be done if the LKPM report has the status "Correction"?
Open the revision notes from the evaluator on the OSS portal, adjust the data or supporting documents requested, then resubmit the report before the correction deadline ends.
Maintain Legality and Post-Licensing Compliance with Awan Kusuma Legalitas
Handling the legality of business establishment is only the first step. Ensuring post-licensing compliance such as LKPM submission and fulfillment of routine legal documents is the key to your business sustainability.
The Awan Kusuma Legalitas team is ready to assist with all your company legality and compliance needs. We provide services for the establishment of business entities through PT (Perseroan Terbatas) Establishment as well as Sole Proprietor PT Establishment, issuance of NIB (Nomor Induk Berusaha) and operational licenses, PKP confirmation, PKP, adjustment of the articles of association through Company Deed Amendment, to assistance with Annual SPT and LKPM reporting. With us, your business grows safely, professionally, and always complies with regulations.
Want to consult regarding LKPM reporting assistance or improving business licenses in OSS?Contact the Awan Kusuma Legalitas Team via WhatsApp now for integrated licensing consultation!
