Sales Referral Agreement Template for Indonesia

A Sales Referral Agreement is a legally binding contract that formalizes the relationship between a principal company and a referrer who introduces potential customers in exchange for commission payments. Under Indonesian law, this agreement must comply with the Civil Code (KUH Perdata) and various commercial regulations to ensure enforceability and protect both parties' interests.

When do you need this document?

You need a Sales Referral Agreement when establishing commission-based partnerships with individuals or companies who will refer customers to your business. This document is essential for technology companies partnering with local consultants, manufacturers working with sales agents, service providers collaborating with industry professionals, or any business seeking to expand through referral networks. The agreement is particularly valuable in Indonesia's relationship-driven business environment where formal documentation legitimizes informal networking practices. You should use this agreement before any referral activities begin to establish clear expectations, prevent disputes, and ensure compliance with Indonesian tax and employment laws.

Key legal considerations

Your Sales Referral Agreement must clearly distinguish the referrer as an independent contractor rather than an employee to avoid inadvertent employment relationships under Government Regulation No. 35 of 2021. The commission structure must comply with Indonesian income tax laws, including proper withholding tax obligations under Law No. 36 of 2008. Anti-corruption clauses are essential to ensure compliance with Indonesian anti-bribery laws, particularly when dealing with government clients or state-owned enterprises. The agreement should include data protection provisions if referrers will handle customer information, ensuring compliance with privacy regulations. Territory restrictions, exclusivity terms, and intellectual property protections must be carefully drafted to avoid conflicts with Indonesian competition law and trade regulations.

Legal requirements in Indonesia

Under the Indonesian Civil Code, your Sales Referral Agreement must meet fundamental contract formation requirements including clear offer and acceptance, lawful consideration, and parties with legal capacity. The agreement must be written in Bahasa Indonesia if either party is an Indonesian entity, and witness signatures are required for enforceability in Indonesian courts. Commission payments are subject to Indonesian withholding tax obligations, typically ranging from 15-26% depending on the referrer's tax status and residency. The agreement must specify tax responsibilities and ensure compliance with trade regulations under Law No. 7 of 2014. If the agreement involves electronic communications or digital transactions, it must comply with the Electronic Information and Transactions Law (ITE Law). All parties should be properly identified with complete legal names, registration numbers for companies, and current addresses to ensure legal validity and enforceability.