The Indonesian government has enacted BKPM Regulation No. 5 of 2025 on 1 October 2025, which came into force on 2 October 2025.
Based on a report by CNBC Indonesia in July 2025, the Ministry of Investment and Downstream Industry/BKPM had already announced revisions to three implementing regulations under Government Regulation No. 5 of 2021.
The regulation was officially uploaded to the Ministry of Investment and Downstream Industry/BKPM website (https://jdih.bkpm.go.id/) and provides updated guidelines on investment facilities.
With its enactment, three earlier rules have been revoked and declared invalid: BKPM Regulation No. 3 of 2021 on the Integrated Electronic Risk-Based Business Licensing System, BKPM Regulation No. 4 of 2021 on licensing services and investment facilities, and BKPM Regulation No. 5 of 2021 on licensing supervision.
The new framework follows up on Government Regulation No. 28 of 2025 concerning the implementation of risk-based business licensing. It establishes procedures for the application, issuance, amendment, extension, and revocation of licences, with all processes carried out through the OSS-RB system.
Minimum Investment and Capital Requirements for PMA
BKPM Regulation 5/2025 introduces provisions on the minimum investment value for foreign direct investment (PMA).
According to Article 26 (2), PMA entities are categorised as large enterprises and must meet a minimum total investment of more than IDR 10 billion, excluding land and buildings, per five-digit KBLI business field per project location.
For limited liability companies, the regulation sets a stricter capital requirement. As stipulated in Article 26 (9), each PMA company must have a minimum paid-up or contributed capital of IDR 2.5 billion.
To maintain transparency, Article 27 (1) states that the paid-up capital cannot be transferred from the business entity’s account for at least 12 months from the date of payment.
Exceptions apply only if the funds are used for asset purchases, building construction, or operational activities.
The regulation also clarifies that while the investment threshold remains at IDR 10 billion for most sectors, exceptions are applied to specific industries. For example, large-scale trading, food and beverage services, construction services, and industries with a single production line remain subject to the standard threshold.
In contrast, for property, accommodation, agriculture, plantations, livestock, and aquaculture, the investment value can include land and buildings.
Strengthening Oversight and Reporting Obligations
Another significant change under BKPM Regulation 5/2025 is the adjustment of the LKPM reporting deadline, giving businesses additional time to submit their investment activity reports.
This aims to improve compliance and provide a more accurate reflection of business progress.
By consolidating licensing provisions and revoking outdated regulations, the government hopes to establish a clearer legal foundation for foreign investment. With the capital lock-up requirement, investors are expected to demonstrate stronger long-term commitments to Indonesia’s economy.
Need advice on licensing to ensure you remain compliant with the latest regulations? Contact Lets Move Indonesia for professional assistance.
