Share Subscription Agreement Template for Indonesia

A Share Subscription Agreement is a fundamental legal document that governs the issuance and subscription of new shares in Indonesian companies. When you're raising capital for your business or investing in Indonesian companies, this agreement establishes the binding terms between the company issuing shares and the subscribers acquiring them. The document ensures compliance with Indonesian corporate law while protecting the interests of all parties throughout the transaction process.

When do you need this document?

You'll need a Share Subscription Agreement when your Indonesian company is issuing new shares to raise capital, whether for startup funding rounds, business expansion, or strategic partnerships. This document is essential when bringing in new investors, conducting pre-IPO funding rounds, or when existing shareholders want to increase their stake through additional share purchases. Foreign investors particularly require this agreement to comply with Investment Coordinating Board (BKPM) regulations and foreign ownership restrictions. The agreement is also necessary when companies need to meet minimum capital requirements or restructure their shareholding arrangements.

Key legal considerations

Your Share Subscription Agreement must include comprehensive warranties and representations from both the company and subscribers to protect against potential liabilities. The document should specify detailed payment terms, including subscription price calculations, payment schedules, and default provisions. You need to address pre-emptive rights of existing shareholders and ensure proper disclosure of material information about the company's financial position and business operations. The agreement must also cover completion conditions, such as regulatory approvals, due diligence satisfaction, and board resolutions. Anti-dilution provisions and transfer restrictions should be clearly defined to protect investor interests and maintain corporate control structures.

Legal requirements in Indonesia

Under Law No. 40 of 2007 on Limited Liability Companies, your agreement must comply with specific provisions regarding share capital, authorized shares, and shareholder rights. The document requires notarization by a licensed Indonesian notary public and must be executed in Indonesian language for legal validity. Foreign investment transactions must obtain approval from BKPM and comply with the Negative Investment List restrictions on foreign ownership percentages. You must ensure compliance with minimum authorized capital requirements under Government Regulation No. 29 of 2016, particularly for companies with foreign shareholders. The agreement must also align with Capital Markets Law No. 8 of 1995 if the transaction involves securities regulations, and all parties must meet Indonesian residency or representation requirements for legal standing.