Intercompany Loan Agreement Template for Indonesia

The Intercompany Loan Agreement is essential for corporate groups operating in Indonesia seeking to establish formal lending arrangements between related entities. This document is particularly crucial when implementing group financing strategies, managing internal cash flows, or providing financial support to subsidiaries or affiliated companies. It must comply with Indonesian regulatory requirements, including those set by the Financial Services Authority (OJK) and Bank Indonesia, especially regarding foreign currency transactions, debt-to-equity ratios, and transfer pricing regulations. The agreement typically includes comprehensive terms covering loan amounts, interest calculations, repayment schedules, security arrangements, and regulatory compliance mechanisms, while considering Indonesian tax implications and reporting obligations.

1. Parties: Identification of the lender and borrower companies, including their complete legal names, registration numbers, and registered addresses

2. Background: Context of the loan arrangement, relationship between the parties, and purpose of the loan

3. Definitions: Definitions of key terms used throughout the agreement, including financial terms, regulatory references, and technical terminology

4. Loan Facility: Details of the loan amount, currency, purpose, and availability period

5. Interest: Interest rate, calculation method, payment dates, and default interest provisions

6. Drawdown: Conditions and procedures for drawing down the loan, including notice requirements and drawdown mechanics

7. Repayment: Terms of repayment, including schedule, prepayment provisions, and mandatory prepayment events

8. Representations and Warranties: Standard representations and warranties from both parties, including corporate authority and regulatory compliance

9. Covenants: Positive and negative undertakings by the borrower, including financial covenants and reporting requirements

10. Events of Default: Circumstances constituting default and consequences thereof

11. Tax Provisions: Treatment of taxes, including withholding tax requirements and gross-up provisions

12. Regulatory Compliance: Compliance with Indonesian laws, including OJK regulations and Bank Indonesia requirements

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirmation of Indonesian law as governing law and jurisdiction for disputes

15. Execution: Signature blocks and execution requirements