In accordance with BKPM Regulation No. 5 of 2021, it is mandatory to make LKPM and report it to BKPM. The report can also be submitted via the Risk-Based Online Single Submission (OSS) page. The Investment Coordinating Board (BKPM) emphasizes the importance of LKPM (Investment Activity Report) reporting for all business actors who have business licenses in Indonesia. This obligation aims to monitor the progress of investment realization and ensure that business activities run in accordance with the provisions.
However, there are still many business actors who ignore this obligation. BKPM reminds that not reporting LKPM can have a number of serious consequences, both administrative and impacting business continuity. The provisions for sanctions for those who do not report LKPM are written in Article 47 paragraph (1) of BKPM Regulation Number 5 of 2021, along with a list of penalties that business people will receive.
Administrative sanctions as referred to in article 47 paragraph (1), in the form of:

1. Written warning.
2. Temporary suspension of business activities.
3. Revocation of business license.
4. Revocation of business licenses to support business activities.

Furthermore, Article 47 paragraphs (2) and (3) of BKPM Regulation 5/2021 explains that administrative sanctions are given to business actors who commit minor violations, moderate violations, or serious violations and are imposed in stages.
Administrative sanctions for not reporting LKPM can be described as follows:
Sanctions for LKPM Written Warning
Sanctions in the form of the first, second, and third written warnings are given if the business actor commits minor violations (Article 55 paragraph (2) of BKPM Regulation 5/2021).
One of these minor violations is when the business actor does not submit LKPM for 2 (two) consecutive periods (Article 55 paragraph (1) letter b of BKPM Regulation 5/2021).
The first, second, and third written warnings for such minor violations are imposed on business actors 3 (three) times in a row (Article 56 paragraph (1) of BKPM Regulation 5/2021).
The LKPM sanctions based on the provision of the first, second, and third written warning sanctions are (Article 56 paragraph (2) of BKPM Regulation 5/2021):

1. The first written warning is given within 30 days;
2. The second written warning is given within 15 days; and
3. The third written warning is given within 10 days.

The enforcement of the written warning is effective as of the date the warning letter is sent through the OSS System and notified to the Business Actor via electronic mail.

Temporary Suspension
In addition to the first and last written warnings, business actors who commit moderate violations may also be subject to LKPM sanctions in the form of temporary suspension of business activities.
The imposition of sanctions for temporary suspension of business activities can occur if (Article 59 paragraph (1) of BKPM Regulation 5/2021):

1. Business actors who do not provide written responses and follow-up within 10 days from the issuance of the third warning letter or 30 days of the first and last warning letters; or
2. the results of field inspections prove the occurrence of moderate violations.

Against the Temporary Suspension of Business Activities as referred to in paragraph (3), the Business Actor within 30 (thirty) Days must (Article 59 paragraph (4) of BKPM Regulation 5/2021):

1. Provide a response to the Temporary Suspension of Business Activities through the OSS System; and
2. Perform fulfillment of obligations, responsibilities, and/or other provisions in accordance with the provisions of laws and regulations.

Revocation of Business Licenses
If after 30 days from the temporary suspension there is no follow-up or improvement, the last sanction imposed is the revocation of business licenses.
The revocation of business licenses in question is in the form of (Article 61 paragraph (2) of BKPM Regulation 5/2021):

1. Revocation of Business Identification Number (NIB);
2. Revocation of Standard Certificate; and/or
3. Revocation of Permit.