The Government of Indonesia, through the Indonesia Investment Coordinating Board (BKPM), has issued Regulation No. 5 of 2025 concerning Guidelines and Procedures for the Implementation of Risk-Based Business Licensing and Investment Facilities through the OSS System  (“Regulation 5/2025”). This Regulation repeals and supersedes three (3) previous regulations that are no longer in effect, namely:

• BKPM Regulation No. 3 of 2021 on the Electronic Integrated Risk-Based Business Licensing System (Perka BKPM 3/2021);
• BKPM Regulation No. 4 of 2021 on the Guidelines and Procedures for Risk-Based Business Licensing and Investment Facilities (Perka BKPM 4/2021); and
• BKPM Regulation No. 5 of 2021 on the Guidelines and Procedures for Supervision of Risk-Based Business Licensing (Perka BKPM 5/2021).

Regulation 5/2025 aims to provide legal certainty and ease of doing business for entrepreneurs within the framework of risk-based licensing. It also serves as a follow-up to Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Business Licensing. This regulation introduces several improvements to the guidelines and procedures for business licensing and the provision of investment facilities, all integrated through the OSS-RBA system. Among the key updates are the extension of the Investment Activity Report (LKPM) reporting deadline, exemptions for certain LKPM submissions, and revisions to investment value requirements.

One of the significant changes introduced in Regulation 5/2025 is the adjustment of the LKPM submission deadline. Through this regulation, the Government of Indonesia has officially extended the LKPM reporting deadline, which was previously set on the 10th day of the reporting month, to the 15th day, as stipulated in Article 285 paragraph (3) of Regulation 5/2025.

Based on this provision, the LKPM submission schedule is now differentiated according to the scale of the business. For small-scale enterprises, reporting is conducted semi-annually, covering the January–June period, which must be submitted no later than July 15 of the current year, and the July–December period, which must be submitted no later than January 15 of the following year. Meanwhile, medium- and large-scale businesses are required to submit their LKPM on a quarterly basis, with the following schedule:

• Quarter I (January–March): no later than April 15;
• Quarter II (April–June): no later than July 15;
• Quarter III (July–September): no later than October 15; and
• Quarter IV (October–December): no later than January 15 of the following year.

In cases where the reporting deadline coincides with a national holiday, the submission schedule will be adjusted and officially announced through the OSS-RBA system.

In addition to the reporting schedule, Regulation 5/2025 also revises the scope of businesses required to submit LKPM reports. Under Article 286 paragraph (2), all business actors are now required to submit LKPM, except for 2 (two) specific categories Micro enterprises, and Business activities financed by the State Budget or Regional Budget. “Micro enterprises” are defined as those with total capital not exceeding IDR 1,000,000,000 (one billion rupiah) excluding land and buildings used for business or annual sales not exceeding IDR 2,000,000,000 (two billion rupiah).

This marks a key difference from previous regulations, which also exempted upstream oil and gas, banking, non-bank financial institutions, and insurance sectors from LKPM obligations. Under the new regulation, these sectors are no longer exempted and are now required to submit periodic LKPM reports through the OSS-RBA system. Consequently, companies operating in these industries must now adjust their compliance practices accordingly.

Furthermore, with regard to business activities in property development and management as regulated under Article 26 paragraph (6) of Regulation 5/2025, whether in the form of property consisting of an entire building or an integrated housing complex, or in the form of property units that are not part of a single building or an integrated housing complex, the issued and paid-up capital for such business activities may not be transferred from the company’s bank account for a minimum period of 12 (twelve) months from the date it is deposited, except for the purposes of asset acquisition, building construction, and/or company operations.

This provision must be implemented in the form of a commitment through a self-declaration made by the business actor when applying for a Business License through the OSS System. The provision regarding the non-transferability of issued and paid-up capital for property development and management business activities is regulated under Article 27 paragraphs (1) and (2) of Regulation 5/2025.

Certain business sectors, however, are subject to specific exceptions. For instance, wholesale trade, food and beverage services, construction services, and industries with a single production line must still meet the minimum investment threshold of IDR 10,000,000,000, with calculations varying based on KBLI classification and business location. Additionally, in sectors such as property, accommodation, agriculture, plantation, livestock, and aquaculture, the total investment value may include land and buildings.

With the enactment of Regulation 5/2025, the Indonesian government reaffirms its commitment to creating a transparent, efficient, and competitive investment climate. Through these enhancements in risk-based business licensing, LKPM reporting, and minimum investment requirements, it is expected that business actors will find it easier to comply with administrative obligations and conduct their operations sustainably. Ultimately, this regulation is anticipated to encourage greater investment, strengthen investor confidence, and contribute to inclusive and sustainable national economic growth.

If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of many corporate law firms in Indonesia that has handled numerous similar matters, with many experienced and professional corporate and civil lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author:
Budhi Satya Makmur