LKPM got Rejected? Here Are The Things You Should Know

“Negligence committed by entrepreneurs or enterprises results in the LKPM being rejected automatically, so that entrepreneurs or enterprises end up receiving administrative sanctions from the government.”

For entrepreneurs and enterprises, the Investment Activity Report (Laporan Kegiatan Penanaman Modal  or LKPM) is a mandatory report that must be reported at every quarter of each year. LKPM itself refers to the provisions of Article 1 number 20 of BKPM Regulation No. 5 Tahun 2021 concerning Guidelines and Procedures of Risk-Based Business Permits Supervision, which defined it as a report on the progress of investment realisation and problems faced by entrepreneurs and enterprises that must be prepared and submitted periodically. The purpose of the obligation of entrepreneurs and enterprises to report LKPM is for the Indonesian government to know how the development of investment activities is going, so that the Government can create appropriate policies to support the implementation of investment. It is also hoped that with the existence of LKPM reporting obligation, there will be no unscrupulous investors who take advantage of permits to collect funds illegally.

Some of the problems that are often experienced by entrepreneurs and enterprises when trying to conduct their obligation and report LKPM, is that the LKPM has been reported, however after verification by BKPM, the entrepreneurs and enterprises are required to “revise” the LKPM. However, sometimes the revision is not made but the due date has passed. In some cases, the entrepreneurs and enterprises may, due to negligence or lack of knowledge, not send the LKPM through the correct system, and the LKPM report ends up being saved as a draft. Such negligence by the entrepreneurs and enterprises to not report the LKPM correctly and its revision within the reporting due date causes the LKPM to be rejected automatically by the BKPM.

Negligence by the entrepreneurs and enterprises when submitting LKPM either through the Online Single Submission Risk Based Approach (OSS RBA) or through the website lkpmonline.bkpm.go.id leads to the imposition of administrative sanctions in the form of written warnings, temporary cessation of business activities, or even revocation of business licenses as regulated in the Article 47 paragraph (1) of the BKPM Regulation No. 5 Tahun 2021 concerning Guidelines and Procedures of Risk-Based Business Permits Supervision.

In order to avoid LKPM being rejected, the following things must be checked and confirmed when submitting LKPM:

1. Reporting LKPM within Due Date of Reporting
2. 1. For Small Entrepreneurs and Enterprises, LKPM reporting must be done every 6 months in a year where:
      1. Semester I (1 January – 30 June): Reporting Due Date 10 July
      2. Semester II (1 July – 31 December): Reporting Due Date 10 January the following year
   2. For Medium and Large Entrepreneurs and Enterprises, LKPM reporting must be done every 3 months (quarterly) in a year where:
      1. Quarter I (1 January – 31 March): Reporting Due Date 10 April
      2. Quarter II (1 April – 30 June): Reporting Due Date 10 July
      3. Quarter III (1 July – 30 September): Reporting Due Date 10 October
      4. Quarter IV (1 October – 31 December): Reporting Due Date 10 January the following year
3. Following the instructions in the OSS RBA System or through the website lkpmonline.bkpm.go.id regarding the submission of LKPM is the most important part that is often ignored by Entrepreneurs and Enterprises. This problem is very important to be filled because it can make an evaluation for both the Entrepreneurs and Enterprises and the Government.
4. Make sure all LKPM data has been on ‘sent’ status, there are several obstacles that occur either in the RBA OSS or through the website lkpmonline.bkpm.go.id, which there is no email notification when the Company has successfully sent LKPM so Entrepreneurs and Enterprises must check the status more often LKPM on the homepage of the OSS RBA column or via the website lkpmonline.bkpm.go.id.

Then what if the Entrepreneurs and Enterprises are late in submitting the LKPM? It must be noted that LKPM cannot be submitted outside the specified time. 

In the event the entrepreneurs or enterprises are late in submitting the LKPM, the entrepreneurs or enterprises can accumulate additional investment as much as the application of the LKPM that was too late to be reported, to be submitted in the next LKPM submission. In such conditions, it can be stated in the description or explanation column “Problems faced by the Company”.

If you want to consult and require legal assistance for your company, please contact us via ask@bplawyers.co.id or 082112341235.