Share Sale Agreement Template for Indonesia

A Share Sale Agreement is your legal framework for transferring ownership in an Indonesian company through the sale of shares. This document governs the entire transaction process, from initial negotiations to final completion, ensuring compliance with Indonesian corporate law while protecting both buyer and seller interests throughout the share transfer.

When do you need this document?

You'll need a Share Sale Agreement when selling or acquiring shares in an Indonesian limited liability company (PT). This includes situations where existing shareholders exit the business, new investors join the company, or when restructuring ownership arrangements. The agreement is essential for both partial stake sales and complete business acquisitions. You'll also require this document when selling shares to foreign investors, as Indonesian law imposes specific ownership restrictions and approval requirements for foreign investment in certain sectors.

Key legal considerations

Your Share Sale Agreement must address several critical elements under Indonesian law. The purchase price and payment terms need clear specification, including any escrow arrangements or deferred payments. Warranties and representations from the seller protect you as the buyer from undisclosed liabilities or misrepresentations about the company's condition. Conditions precedent, such as regulatory approvals or due diligence completion, must be clearly defined with specific deadlines. The agreement should also cover tax obligations, particularly capital gains tax implications for the seller, and specify which party bears responsibility for various transaction costs and stamp duties.

Legal requirements in Indonesia

Under Law No. 40 of 2007 on Limited Liability Companies, share transfers must comply with specific procedural requirements. The company's articles of association may contain restrictions on share transfers, including pre-emption rights for existing shareholders. For transactions involving foreign buyers, you must ensure compliance with Law No. 25 of 2007 on Capital Investment, which sets ownership limits for foreign investors in various sectors. Large transactions may trigger merger control requirements under Law No. 5 of 1999 on Anti-Monopoly legislation. The transfer typically requires board of directors' approval and must be recorded in the company's shareholder register. Additionally, depending on the company's sector, you may need approval from relevant regulatory bodies such as the Financial Services Authority (OJK) for financial institutions or sector-specific ministries for regulated industries.