Advisor Contract Template for Indonesia

An Advisor Contract is a legally binding agreement that establishes the terms and conditions for professional advisory services in Indonesia. This document creates a clear framework between your company and external advisors, whether individuals or firms, while ensuring compliance with Indonesian legal requirements including the Civil Code and relevant employment regulations.

When do you need this document?

You need an Advisor Contract when engaging external professionals to provide specialized expertise to your business. This includes situations where you're hiring management consultants, financial advisors, legal counsel, technical specialists, or industry experts. The contract is essential when establishing advisory board relationships, engaging retired executives as strategic advisors, or contracting with professional services firms. It's particularly important when the advisory relationship involves access to confidential information, strategic planning, or long-term business guidance. Companies also require this document when engaging foreign advisors, as it helps establish proper work authorization and tax compliance under Indonesian law.

Key legal considerations

Your Advisor Contract must clearly distinguish between independent contractor and employee relationships to avoid unintended employment obligations under Law No. 13 of 2003 on Manpower. Include comprehensive confidentiality clauses to protect your business information, as Indonesian law provides limited default protection for trade secrets. Address intellectual property ownership explicitly, particularly for any recommendations, strategies, or materials developed during the advisory engagement. Consider including non-compete and non-solicitation provisions, though these must be reasonable in scope and duration under Indonesian contract law. Payment terms should specify currency, tax withholding responsibilities, and compliance with Law No. 36 of 2008 on Income Tax. Include dispute resolution mechanisms, preferably arbitration clauses that comply with Indonesian arbitration law to avoid lengthy court proceedings.

Legal requirements in Indonesia

Under Indonesian Civil Code provisions, your Advisor Contract must meet basic contract validity requirements including legal capacity of parties, lawful object, and proper consideration. Foreign advisors must comply with Presidential Regulation No. 20 of 2018 regarding foreign worker employment, which may require work permits depending on the nature and duration of services. The contract should specify governing law and jurisdiction, typically Indonesian law for domestic advisory relationships. Tax obligations must be clearly addressed, including Value Added Tax (PPN) if applicable and income tax withholding requirements. For international advisory contracts involving foreign parties, compliance with Law No. 24 of 2000 on International Agreements may be necessary. Ensure the contract includes proper termination clauses and notice periods that align with Indonesian commercial practice and legal requirements.