Yes, LKPM non-compliance can freeze your NIB in Indonesia. This is not a theoretical risk. Under BKPM regulations integrated into the OSS system, repeated failure to submit LKPM can result in administrative sanctions that escalate to NIB suspension or freezing. For foreign-owned companies operating as PT PMA, this directly impacts your ability to run, expand, or even legally maintain your business presence in Indonesia.
As an advisory team working closely with foreign investors, we see this issue arise most often when companies underestimate LKPM as a procedural formality. In reality, it is a core compliance instrument monitored by BKPM and embedded into Indonesia’s licensing ecosystem. If you want a deeper breakdown of how penalties escalate, you can also read our detailed explanation on Penalties and Sanctions for Late or Incorrect LKPM Reporting for Foreign Companies in Indonesia.
What Is LKPM and Why It Is Legally Binding
LKPM, or Laporan Kegiatan Penanaman Modal, is a mandatory quarterly investment activity report submitted through the OSS system. Every business holding an NIB, including PT PMA, must submit LKPM regardless of operational status.
The report covers investment realization, workforce data, production, exports, and compliance obligations under BKPM Regulation No. 5/2025. Importantly, all KBLI codes listed in your NIB must be reported. Even if there is no activity, a zero LKPM report is still required. From a regulatory standpoint, non-reporting is treated as non-compliance, not inactivity.
How LKPM Non-Compliance Leads to NIB Freezing
BKPM applies a progressive sanction mechanism. The process does not jump directly to NIB freezing, but it can reach that stage quickly if violations persist.
The typical escalation starts with written warnings issued through OSS. If LKPM is still not submitted, BKPM may impose restrictions on business activities. Continued non-compliance, especially for two consecutive quarters, has led to temporary NIB freezes in real cases.
Once your NIB is frozen, OSS access can be blocked. This affects license renewals, amendments, and operational approvals. In practical terms, your company becomes administratively paralyzed until compliance is restored.
Compliance Scoring and Increased Regulatory Scrutiny
Under BKPM Regulation No. 5/2025, LKPM compliance is now part of an OSS-based compliance scoring system. Businesses are rated from Very Good to Poor. A poor score increases supervision intensity and raises the likelihood of audits.
For foreign investors, this often triggers broader reviews of KBLI alignment, capital realization, and licensing validity. What starts as a missed report can expand into a full compliance examination if left unresolved.
Also read: Steps to Appeal or Resolve LKPM Late Filing Sanctions
Quarterly Deadlines You Cannot Miss
LKPM must be submitted quarterly with fixed deadlines:
- April 15
- July 15
- October 15
- January 15
Each deadline applies to the previous quarter. Missing these dates is automatically logged by OSS. There is no grace period, and manual explanations do not replace submission.
What to Do If Your NIB Is Already Frozen
If your NIB is frozen due to LKPM non-compliance, resolution is possible but disruptive. You must conduct a compliance audit, submit all overdue LKPM reports accurately, and formally appeal to BKPM. Reinstatement can take weeks or months, during which your operations remain constrained.
This is why prevention is far more efficient than correction. We always advise clients to treat LKPM as part of their core governance, not an administrative afterthought.
For a foundational understanding of reporting obligations, see our guide on LKPM Reporting for PMA and Foreign Companies in Indonesia.
How We Help You Stay Fully Compliant
As an expert team assisting foreign companies across industries, we handle LKPM reporting end to end. Our approach ensures accurate KBLI coverage, timely submission, and alignment with OSS compliance scoring.
Through InvestinAsia’s Indonesia LKPM Reporting Services, we help you avoid sanctions, maintain a strong compliance profile, and protect your NIB from suspension risks. For investors focused on long-term stability, this is not just reporting support. It is risk management.
Contact us now for FREE consultation and get a special offer!
Frequently Asked Questions
Can a single missed LKPM freeze my NIB?
A single missed report usually triggers a warning. However, repeated non-compliance can escalate to NIB freezing.
Do inactive companies still need to submit LKPM?
Yes. Zero activity must still be reported for all KBLI codes listed in the NIB.
How long can an NIB remain frozen?
In real cases, freezes have lasted up to two months or longer, depending on audit and appeal resolution.
Does LKPM affect future licensing approvals?
Yes. Poor compliance scores increase supervision and complicate license amendments and expansions.
Is OSS the only channel for LKPM submission?
Yes. LKPM must be submitted through the OSS system. External explanations do not replace OSS filings.
