Revenue Share Agreement Template for Indonesia

A Revenue Share Agreement is a commercial contract that establishes how parties will divide revenues generated from joint business activities, partnerships, or collaborative ventures in Indonesia. This legally binding document ensures transparent revenue allocation while maintaining compliance with Indonesian commercial law and tax regulations.

When do you need this document?

You need this agreement when entering technology partnerships where platform owners share advertising or subscription revenues with content creators. Distribution partnerships require revenue sharing agreements when manufacturers work with local distributors to share sales proceeds. Joint ventures between Indonesian and foreign companies use these agreements to allocate profits according to investment contributions and operational roles. Franchise arrangements need revenue sharing structures to define how franchise fees and ongoing royalties are calculated and distributed. Marketing partnerships often involve revenue sharing when affiliate marketers or business development partners receive commission-based compensation tied to sales performance.

Key legal considerations

Revenue definition clauses must clearly distinguish between gross revenue, net revenue, and deductible expenses to prevent disputes over calculation methods. Payment terms should specify currency, frequency, and methods while addressing foreign exchange considerations for international partnerships. Audit rights provisions allow parties to verify revenue calculations and maintain financial transparency throughout the relationship. Taxation clauses must address Indonesian withholding tax obligations under Law No. 36 of 2008, particularly for payments to foreign entities. Termination provisions should cover revenue sharing during wind-down periods and final settlement procedures. Performance metrics and minimum revenue thresholds help protect parties from underperforming partnerships that could affect the viability of the arrangement.

Legal requirements in Indonesia

Indonesian Civil Code requires revenue sharing agreements to meet fundamental contract validity requirements including legal capacity of parties, lawful consideration, and clear mutual consent. Companies must ensure proper corporate authorization for revenue sharing arrangements under Law No. 40 of 2007 on Limited Liability Companies. Foreign investment revenue sharing requires compliance with Law No. 25 of 2007 on Investment, including any restrictions on foreign ownership or profit repatriation. Tax compliance under Government Regulation No. 94 of 2010 mandates proper income tax calculation and withholding for revenue distributions. Documentation requirements include maintaining detailed revenue records, supporting calculations, and providing regular reporting to comply with Indonesian accounting standards and tax authority requirements.