Zero LKPM Reports Could Lead to Business Suspension

At the end of 2025, Indonesia's Ministry of Investments (BKPM) reiterated that LKPM reporting is not merely a formality. It is a commitment from companies to the state.

If reports are not submitted or consistently show zero figures, businesses may face administrative consequences ranging from official warnings to temporary suspension of operations and revocation of permits. This issue becomes particularly crucial ahead of the reporting period for the fourth quarter of 2025.

LKPM (Laporan Kegiatan Penanaman Modal) is a report on the progress of investment implementation, which companies submit through the OSS-RBA system.

For the regulator, this document is the primary source of information on whether the company is genuinely operating, using invested funds, and fulfilling declared plans, rather than existing only nominally.

The risk of sanctions typically arises in the following situations:

— Reports are not submitted for two consecutive reporting periods;

— After the first LKPM submission, the company reports zero investment implementation for four consecutive periods;

— The company is stated to be in the construction phase but shows zero for four consecutive reporting periods.

Explanations emphasize that constant zero figures at the construction stage are seen as a sign of a problematic project.

Measures are introduced gradually:

Sanctions do not always involve monetary fines. More often, they entail recording violations and imposing restrictions within the OSS system, complicating any changes to licenses and increasing the likelihood of inspections.

It's not uncommon for a company to be actively operating, constructing facilities, or incurring expenses, yet report zero investment implementation. This is usually due to:

— Uncertainty about which expenses qualify as investments;

— Lack of commentary on the data;

— Incorrectly stated project stage (construction instead of operation and vice versa);

— Lack of reflection of actual progress and unavailability of supporting documents.

Regional authorities strongly recommend that a project still in the construction phase should not display 'zero' for four consecutive periods — there should be project movement with added explanations.

The next reporting concerns the fourth quarter of 2025.

In practice, the OSS system usually sets the submission deadline from January 1 to 10, 2026. However, guidance should be based on the notifications in the OSS personal account and rules applicable to the specific type of activity.

— Determine the duty and frequency of submitting LKPM;

— Check for any consecutive missed submissions for two periods;

— In case of zero implementation:

• Review if investment expenses are correctly accounted for,

• Confirm the correctness of the project stage,

• Add explanations to the data;

— Reconcile accounting documents, payments, contracts, and acts;

— Ensure all figures are truly substantiated.

If there are planned changes in OSS or license updates, it's better not to delay working with LKPM: violations can significantly slow down any procedures.

LKPM requirements are becoming stricter, and this report is no longer seen as a formality. Timely and correct reporting helps avoid restrictions and other sanctions. It's much easier to verify it now than to comply retroactively at the regulator's request.

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