Joint Venture Distribution Agreement Template for Indonesia

The Joint Venture Distribution Agreement is essential for foreign companies seeking to establish a distribution presence in Indonesia while complying with local ownership and investment regulations. This document type is particularly relevant when foreign manufacturers or suppliers wish to partner with local Indonesian entities to distribute products in the Indonesian market. The agreement must carefully balance the requirements of Indonesian investment law, which may restrict foreign ownership in distribution businesses, with commercial objectives. It typically includes detailed provisions on corporate governance, distribution rights, territory allocation, and operational matters. The document structure ensures compliance with Indonesian legal requirements, including Law No. 25 of 2007 on Investment and various trade regulations, while protecting both parties' interests in the joint venture relationship.

1. Parties: Identification of the joint venture partners and their legal details

2. Background: Context of the joint venture distribution arrangement and parties' intentions

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Formation of Joint Venture: Details of the JV company formation, capital structure, and shareholding

5. Business Scope: Defined scope of joint venture business and distribution rights

6. Capital and Funding: Initial capital contributions, future funding obligations, and capital structure

7. Distribution Rights and Obligations: Specific distribution rights, territories, and obligations of the parties

8. Management and Control: Governance structure, board composition, and decision-making processes

9. Product Supply and Distribution Terms: Terms governing product supply, pricing, and distribution arrangements

10. Financial Matters: Financial management, accounting principles, and profit distribution

11. Intellectual Property Rights: IP ownership, licenses, and usage rights

12. Confidentiality: Protection of confidential information and trade secrets

13. Non-Competition: Restrictions on competitive activities

14. Term and Termination: Duration of agreement and termination provisions

15. Consequences of Termination: Rights and obligations upon termination

16. Force Majeure: Provisions for unforeseen circumstances affecting performance

17. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law

18. General Provisions: Standard legal provisions including notices, amendments, and severability