Master Receivables Purchase Agreement Template for Indonesia

A Master Receivables Purchase Agreement is a comprehensive legal framework that governs the ongoing sale and purchase of receivables between a seller and purchaser in Indonesia. This agreement establishes the terms and conditions for multiple receivables transactions over time, creating an efficient structure for companies to monetize their accounts receivable while providing investors with a regulated investment vehicle under Indonesian law.

When do you need this document?

You need this agreement when establishing a receivables purchase program where a company regularly sells its receivables to financial institutions or investors. This is particularly common for businesses with steady cash flow needs, such as manufacturing companies selling to distributors, service providers with recurring billings, or exporters seeking immediate payment for overseas sales. The agreement is essential when multiple parties are involved, including servicers, security agents, and guarantors, as it coordinates their roles and responsibilities. Financial institutions also require this document when structuring receivables financing facilities or when setting up special purpose vehicles for receivables investment programs.

Key legal considerations

The agreement must clearly define the assignment mechanism to ensure valid transfer of receivables under Indonesian Civil Code provisions. Purchase price calculations, including discount rates and payment terms, require precise formulation to avoid disputes and ensure commercial viability. Representations and warranties sections must address the quality and collectibility of receivables, with appropriate remedies for breaches. The document should include detailed eligibility criteria specifying which receivables can be purchased, including credit quality, maturity periods, and debtor requirements. Servicing provisions must outline collection procedures, reporting obligations, and handling of disputed receivables. Security arrangements, if applicable, must comply with Law No. 42 of 1999 on Fiduciary Security, including proper registration requirements.

Legal requirements in Indonesia

Under Indonesian law, receivables purchase agreements must comply with the Indonesian Civil Code's provisions on assignment of rights, particularly regarding notification requirements to debtors and the assignor's liability for the existence of receivables. The agreement must address currency requirements under Law No. 7 of 2011, especially if dealing with foreign currency receivables or if Indonesian Rupiah denomination is mandatory. Financial institutions involved as purchasers must ensure compliance with OJK regulations under Law No. 21 of 2011, including licensing requirements and prudential standards. If the arrangement involves fiduciary security over receivables, registration with the Fiduciary Registration Office is mandatory under Law No. 42 of 1999. The document must also consider Indonesian tax implications, including VAT treatment of receivables sales and withholding tax obligations. Cross-border transactions require additional compliance with foreign exchange regulations administered by Bank Indonesia.