The Government of Indonesia has issued the latest provisions relating to the Regulation of the Minister of Investment and Downstreaming/Head of the Investment Coordinating Board Number 5 of 2025 (“BKPM Regulation 5/2025”), which revokes three previously applicable regulations, namely the BKPM Regulation Number 5 of 2021 concerning Guidelines and Procedures for Supervision of Risk-Based Business Licensing (“BKPM Regulation 5/2021”), the BKPM Regulation Number 3 of 2021 concerning the Electronic Integrated Risk-Based Business Licensing System (“BKPM Regulation 3/2021”), and the BKPM Regulation Number 4 of 2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities (“BKPM Regulation 4/2021”).
Through this SWILU Edition 21, we focus on four significant changes regulated under BKPM Regulation 5/2025, which are the minimum capital limit, the minimum retention period (Sinking Fund) for PMA Company, the adjustment to the submission schedule of Investment Activity Report (LKPM), and sanctions for non-compliance with the capital requirements of PMA Company, as described below:
- Change in Provision of Minimum Paid-Up Capital for PMA Company
Article 26 paragraph (10) BKPM Regulation 5/2025
“The minimum capital requirement for Foreign Capital Investment (PMA Company) as referred to in paragraph (9) is a subscribed/paid-up capital of at least Rp2,500,000,000.00 (two billion five hundred million Rupiah) per limited liability company, unless otherwise determined based on the provisions of statutory regulations.”
As per the wording of this article, Perka BKPM 5/2025 amends the amount of Paid-Up Capital for PT PMA. In the previous regulation, Perka BKPM 4/2021, the minimum Paid-Up Capital requirement for PMA was set at Rp10,000,000,000.00 (ten billion Rupiah), and there was no specific regulation concerning the mechanism of deposit or the minimum retention period (Sinking Fund) for the ownership of this Paid-Up Capital amount.
As the article stipulates above, BKPM Regulation 5/2025 amends the amount of Paid-Up Capital for PT PMA. In the previous regulation, BKPM Regulation 4/2021, the minimum Paid-Up Capital requirement for PMA Company was set at Rp10,000,000,000.00 (ten billion Rupiah), and there was no specific regulation concerning the mechanism of deposit or the minimum retention period (Sinking Fund) for the ownership of this Paid-Up Capital amount.
However, BKPM Regulation 5/2025 does not change the minimum investment value requirement for PMA Company, which remains at Rp10,000,000,000.00 (ten billion Rupiah) per five-digit Indonesian Industrial Classification (“KBLI”) business sector per project location.
- Obligation to Retain Paid-Up Capital for Minimum of 12 (Twelve) Months
Furthermore, Article 27 paragraphs (1) and (2) of BKPM Regulation 5/2025 specifically regulate that the Paid-Up Capital for PMA Company cannot be transferred out of the company’s account (Sinking Fund) for a minimum period of 12 (twelve) months, calculated continuously from the moment the Paid-Up Capital is placed/deposited in the Company’s account, which is consistent with the obligation of the PMA Company in submitting the Investment Activity Report (LKPM).
- Change in the Deadline for Reporting Investment Activity Report (“LKPM”)
There is a change in the provision regarding the deadline for LKPM submission, which was previously regulated in Perka BKPM 5/2021 and subsequently amended in BKPM Regulation 5/2025. The changes to these dates are listed as follows:
| Reporting Period | End Date of LKPM Reporting Period Under BKPM Regulation 5/2021 (Outdated) | End Date of LKPM Reporting Period Under BKPM Regulation 5/2025 (Inforce) |
| Quarter I | April 10th | April 15th |
| Quarter II | July 10th | July 15th |
| Quarter III | October 10th | October 15th |
| Quarter IV | January 10th of the following year | January 15th of the following year |
With the issuance of BKPM Regulation 5/2025, the Government of Indonesia extends the reporting period for the LKPM Report for PMA Company.
- Sanctions for Non-Compliance with Provisions of Paid-Up Capital
PMA Company that fails to comply with the minimum capital provisions as stipulated in BKPM Regulation 5/2025 and other related provisions concerning capitalization for PMA Company may be subject to sanctions in the form of:
- Written Warning;
- Temporary suspension of business activities;
- Imposition of administrative fines;
- Imposition of police compelling force (daya paksa polisional);
- Revocation of license/certification/approval; and/or
- Revocation of basic requirements, Business Licensing (PB), and/or Business Licensing for Micro and Small Enterprises (PB UMKU).
For assistance with PMA Company Capital Consultation, LKPM Reporting, and other legal services from SW Counselors at Law, please contact:
Bella Siboro, S.H.
Senior Associate
T. (+6221) 2222-0200
Dupuis Sola Scriptura, S.H.
Associate
T. (+6221) 2222-0200
E. dupuis.scriptura@shinewing.id
