Sponsorship Broker Agreement Template for Indonesia

A Sponsorship Broker Agreement is a specialized contract that establishes the legal relationship between a rights holder and a professional intermediary who will secure sponsorship opportunities on their behalf. Under Indonesian law, this agreement must comply with the Civil Code provisions on contracts while meeting specific licensing and business requirements set forth in Trade Law No. 7 of 2014 and related regulations.

When do you need this document?

You need a Sponsorship Broker Agreement when you own valuable sponsorship rights but lack the expertise, networks, or time to effectively market them to potential sponsors. This is common for sports clubs, entertainment venues, event organizers, media properties, and content creators who want to monetize their audience reach through sponsorship deals. The agreement is particularly crucial when working with brokers who will have significant authority to negotiate terms, access confidential information, or represent your brand in the marketplace. If you're planning to grant exclusive territory rights or allow sub-brokerage arrangements, a formal agreement becomes essential to protect your interests and ensure compliance with Indonesian business regulations.

Key legal considerations

The agreement must clearly define the scope of the broker's authority, whether exclusive or non-exclusive, and specify territorial limitations. Commission structures should be detailed, including payment terms, circumstances triggering commission entitlement, and any caps or minimum guarantees. You should carefully address confidentiality obligations, as brokers often access sensitive commercial information about your operations and sponsor relationships. The contract should specify performance standards, reporting requirements, and termination conditions to protect against underperformance. Risk allocation clauses are critical, particularly regarding liability for broker representations to potential sponsors and compliance with advertising standards. Consider including provisions for dispute resolution through arbitration, as this is often more efficient for commercial disputes in Indonesia.

Legal requirements in Indonesia

Under Indonesian law, sponsorship brokers may require business licensing under Government Regulation No. 24 of 2018 on Electronic Integrated Business Licensing Services, particularly if they operate as formal intermediaries or trading companies. The agreement must comply with Minister of Trade Regulation No. 67 of 2013 regarding language requirements for certain commercial contracts. If the sponsorship involves foreign investment or cross-border elements, provisions of Law No. 25 of 2007 on Investment may apply. For media and entertainment sponsorships, compliance with Law No. 33 of 2009 on Film Industry regulations may be necessary. The contract should address tax obligations, as broker commissions are subject to Indonesian withholding tax requirements. Ensure the agreement includes proper dispute resolution mechanisms that comply with Indonesian civil procedure, and consider whether bank guarantees or other security arrangements are appropriate based on the transaction size and broker's financial standing.