Late or incorrect LKPM reporting exposes foreign companies in Indonesia to escalating administrative sanctions that can end in business suspension or license revocation. Under Perka BKPM No. 5/2025, PT PMA entities must treat LKPM compliance as a core regulatory obligation, not a routine formality. We regularly advise foreign investors that even operationally inactive companies remain fully subject to these rules through the OSS-RBA system.
Also read; What is LKPM Reporting in Indonesia: Definition, Legal Basis, OSS-RBA Process and Compliance Guide
Understanding LKPM Obligations for PT PMA
LKPM, or the Investment Activity Report, functions as the government’s primary monitoring tool for foreign investment. Medium and large PT PMA must submit LKPM quarterly, while small enterprises report semi-annually. Each submission captures investment realization, workforce data, production progress, and compliance commitments recorded in the OSS system.
Accuracy matters as much as timeliness. Incomplete or inconsistent data triggers verification flags and directly affects your compliance rating.
If you want a deeper understanding of LKPM obligations for foreign-owned companies, we recommend reviewing our detailed guide on LKPM for PMA and foreign companies in Indonesia. That article explains reporting scope, data structure, and common compliance pitfalls in practical terms.
Sanctions for Late LKPM Reporting
Failure to submit LKPM for two consecutive reporting periods initiates a structured sanction process. Authorities issue written warnings in three stages. The first warning provides 30 days to comply, followed by a second warning with 15 days, and a third with only 10 days.
If you ignore these warnings, the consequences escalate. Temporary suspension of business activities may follow, along with administrative fines whose amounts are determined by regulators. Continued non-compliance ultimately leads to suspension or revocation of your business license.
Sanctions for Incorrect or Incomplete LKPM
Incorrect LKPM submissions are not treated lightly. Errors, missing data, or unverified information result in a poor compliance rating, typically below 60. This status obligates you to correct and resubmit the report within the allowed verification window.
Repeated inaccuracies signal systemic non-compliance. In practice, this can trigger restrictions on business activities, reviews of your NIB, and revocation of investment facilities previously granted to your company.
Escalation Risks for Foreign Companies
Poor LKPM compliance extends beyond reporting penalties. We often see direct impacts on license renewals, immigration processes such as KITAS extensions, and increased audit exposure. In severe cases, unpaid fines or unresolved suspensions result in full revocation of Perizinan Berusaha and closure of registered business locations.
How to Respond to LKPM Warnings
Warnings are delivered through the OSS-RBA portal and official notifications. You must log in using your NIB credentials, formally acknowledge the warning, and submit corrected or overdue LKPM within the specified timeframe. Once verification is approved, sanctions are automatically lifted and marked as resolved.
Correcting Overdue or Rejected Reports
Submitting overdue LKPM requires precise reconciliation of investment realization, labor data, and operational status. Verification teams assess consistency against your licenses and KBLI activities. Completing corrections before escalation deadlines is critical to preventing license-level consequences.
How We Help You Stay Compliant
As an advisory team working closely with foreign investors, we see LKPM reporting as part of a broader compliance ecosystem. Through InvestinAsia’s Indonesia LKPM Reporting Services, we support you from data preparation and OSS submissions to correction handling and regulator communication. Our role is to reduce your compliance risk so you can focus on operating and scaling your business in Indonesia with confidence.
Contact us now for FREE consultation and get a special offer!
Frequently Asked Questions
What happens if a PT PMA submits LKPM late?
Late submissions trigger written warnings and can escalate to business suspension and license revocation if unresolved.
Are incorrect LKPM reports penalized even if submitted on time?
Yes. Inaccurate or incomplete reports result in poor compliance ratings and mandatory corrections.
Can LKPM sanctions be removed?
Yes. Sanctions are lifted automatically after overdue or corrected LKPM reports are approved through OSS-RBA.
Does LKPM compliance affect immigration matters?
Indirectly, yes. Poor compliance increases scrutiny during KITAS extensions and audits.
Is LKPM mandatory for dormant foreign companies?
Yes. PT PMA must report LKPM regardless of operational activity unless licenses are formally adjusted.
