Directors of companies in Indonesia, especially PT PMA or foreign-owned companies, are legally responsible for ensuring LKPM reporting is accurate, timely, and compliant. Under Law No. 25 of 2007 on Investment, LKPM is not an administrative formality. It is a statutory obligation tied directly to your investment license and business continuity. As directors, you carry ultimate accountability, even when the task is delegated internally.
At InvestinAsia, we regularly advise foreign directors who underestimate LKPM obligations until compliance risks arise. Understanding your role early protects your company and your position.
Legal Basis and Scope of Responsibility
LKPM, or Laporan Kegiatan Penanaman Modal, is an investment activity report submitted to BKPM through the OSS system. The regulation applies primarily to PT PMA and PT PMDN, with reporting frequency determined by investment scale.
Medium and large companies with investment realization above IDR 5 billion must submit LKPM quarterly. Micro and small companies report biannually. Regardless of frequency, directors remain responsible for the integrity of the data submitted.
From a governance perspective, LKPM duties align closely with directors’ broader obligations over financial reporting, regulatory compliance, and corporate disclosures.
What Directors Are Specifically Responsible For
In practice, your responsibilities as a director include ensuring that LKPM reports accurately reflect actual investment realization, workforce data, operational progress, business constraints, and future investment plans.
You must also ensure consistency between LKPM data and OSS licensing information. Discrepancies between reported investment figures and OSS records often trigger compliance reviews by BKPM or regional DPMPTSP offices.
Even if operational teams compile the data, directors are expected to implement internal controls. This mirrors the standard applied to financial statements, where oversight cannot be fully delegated without supervision.
Also read: Common Mistakes in LKPM Reporting and How to Avoid Them
Submission Process and Director Oversight
LKPM submission is conducted online through the OSS system. Deadlines are strict, such as January 10 for fourth-quarter reporting. Directors may submit directly or appoint an internal coordinator, but the responsibility does not transfer.
BKPM and DPMPTSP authorities review submissions to assess compliance. Incomplete or inconsistent reports may result in follow-ups, clarifications, or enforcement actions. From our experience, proactive director oversight significantly reduces audit risk.
Also read: Can LKPM Non-Compliance Freeze Your NIB in Indonesia?
Risks, Sanctions, and Personal Exposure
Failure to submit LKPM, or submitting inaccurate data, can result in administrative sanctions. These range from written warnings to restrictions, suspension, or even revocation of business licenses.
For PT PMA, this risk is particularly serious because non-compliance may affect access to investment facilities and future licensing approvals. Directors may also face personal exposure if inaccurate reporting materially affects the company’s legal standing.
For a deeper understanding of enforcement outcomes, you can review our analysis on penalties and sanctions for late or incorrect LKPM reporting for foreign companies in Indonesia.
Also read: Steps to Appeal or Resolve LKPM Late Filing Sanctions
Strategic Importance for Foreign Directors
For foreign investors, LKPM is more than compliance. It is a formal communication channel with Indonesian authorities. Accurate reporting builds regulatory trust, supports future expansion approvals, and minimizes operational disruption.
Many foreign directors struggle with local data alignment, OSS technical issues, and interpretation of reporting fields. This is why having a structured compliance approach is essential.
If you are new to this obligation, our detailed guide on LKPM reporting for PMA and foreign companies in Indonesia provides foundational clarity.
How We Support Directors Through LKPM Compliance
At InvestinAsia, we act as an extension of your compliance function. We assist directors in reviewing data accuracy, aligning OSS records, preparing LKPM submissions, and managing communications with BKPM.
Our Indonesia LKPM Reporting Services are designed to reduce director risk while ensuring your company remains compliant and audit-ready. We understand that as a director, your priority is running the business. Our role is to make LKPM compliance predictable and controlled.
Contact us now for FREE consultation and get a special offer!
Frequently Asked Questions (FAQs)
Is the director personally responsible for LKPM reporting?
Yes. Even if the task is delegated, Indonesian investment regulations place ultimate responsibility on the director.
Can LKPM be submitted by a staff member or consultant?
Yes, but director oversight is still required. Errors remain the director’s responsibility.
How often must a PT PMA submit LKPM?
Quarterly for medium and large companies, biannually for micro and small companies.
What happens if LKPM data does not match OSS records?
This may trigger clarification requests, compliance reviews, or administrative sanctions.
Does LKPM affect future business licensing?
Yes. Poor compliance history can delay or block license amendments and expansions.
