Asset Purchase Agreement Template for Indonesia
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What is a Asset Purchase Agreement?
An Asset Purchase Agreement is essential for transactions involving the transfer of specific assets in Indonesia. This document is typically used when a buyer wishes to acquire particular assets rather than shares in a company, allowing for selective acquisition of desired assets while leaving liabilities with the seller unless specifically assumed. The agreement must comply with Indonesian legal requirements, including the Civil Code (Kitab Undang-undang Hukum Perdata) and relevant regulatory frameworks. It's particularly important when the transaction involves regulated assets, requires governmental approvals, or includes land rights under the Basic Agrarian Law. The document should be drafted in both Indonesian and English languages if involving foreign parties, with the Indonesian version prevailing in case of inconsistencies. Special attention must be paid to tax implications, asset registration requirements, and any sector-specific regulations that may affect the transfer.
About the Asset Purchase Agreement
An Asset Purchase Agreement is a crucial legal document that governs the transfer of specific business assets from a seller to a buyer in Indonesia. Unlike share purchase agreements, this document allows you to selectively acquire particular assets while leaving unwanted liabilities with the seller, providing greater control over what you're actually purchasing.
When do you need this document?
You need an Asset Purchase Agreement when acquiring specific business assets rather than entire companies. This includes purchasing manufacturing equipment, intellectual property, customer lists, inventory, or real estate from existing businesses. The document is essential when you want to avoid inheriting the seller's debts, legal disputes, or regulatory issues. It's particularly valuable in distressed asset situations, business restructuring, or when expanding operations through strategic acquisitions of competitor assets.
Key legal considerations
The agreement must clearly identify all assets being transferred, including detailed descriptions, serial numbers, and registration details where applicable. Purchase price allocation across different asset categories affects tax treatment and requires careful structuring. Representations and warranties from the seller protect you against undisclosed liabilities, defects, or title issues. Due diligence provisions allow thorough asset inspection before completion. The document should address employee transfer obligations under Indonesian labor law if applicable, and include comprehensive indemnification clauses for pre-closing liabilities.
Legal requirements in Indonesia
Asset Purchase Agreements in Indonesia must comply with the Indonesian Civil Code and Law No. 40 of 2007 on Limited Liability Companies for corporate sellers. Foreign buyers must consider Law No. 25 of 2007 on Investment regarding ownership restrictions on certain asset types. Government Regulation No. 24 of 2018 requires proper business licensing for asset transfers, while Law No. 28 of 2007 mandates tax compliance including transfer taxes and VAT obligations. Land transfers require compliance with the Basic Agrarian Law and registration with the National Land Agency. The agreement should be executed before a public notary for certain high-value transactions, and both Indonesian and English versions may be required for foreign parties, with the Indonesian version taking legal precedence.
GOVERNING LAW
Applicable law
This Asset Purchase Agreement is drafted to comply with Indonesia law. Key legislation includes:
Law No. 40 of 2007 on Limited Liability Companies: Regulates corporate entities and their authority to enter into asset purchase agreements
Law No. 25 of 2007 on Investment: Governs foreign investment and ownership of assets in Indonesia
Government Regulation No. 24 of 2018 on Online Single Submission: Regulates business licensing and asset transfer registration requirements
Law No. 28 of 2007 on Tax: Covers tax implications and obligations related to asset transfers
Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment: Relevant for asset purchase warranty provisions and seller's solvency representations
Law No. 5 of 1960 on Basic Agrarian Law: Essential if the assets include land or buildings
Minister of Trade Regulation No. 76 of 2018: Regulates specific requirements for certain types of asset transfers and registrations
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