Document background
The Inter Company Loan Agreement is essential for documenting financial arrangements between related corporate entities in Indonesia. It is commonly used when a parent company provides financing to its subsidiary, or when companies within the same group structure engage in internal financing arrangements. The agreement must comply with Indonesian regulatory requirements, including Law No. 40 of 2007 on Limited Liability Companies, transfer pricing regulations, and foreign exchange controls. This document is particularly crucial for demonstrating arm's length transactions to tax authorities and ensuring proper corporate governance. It typically includes detailed terms on loan amount, interest calculation, repayment schedule, events of default, and security arrangements, while incorporating necessary provisions for regulatory reporting and compliance with Indonesian corporate and banking laws.
