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The JV Contract Agreement is a crucial document used when establishing a joint venture in Indonesia, particularly when foreign investment is involved. It serves as the primary agreement governing the relationship between partners and must comply with Indonesian investment laws, including the Positive Investment List (Presidential Regulation No. 10 of 2021) which specifies foreign ownership limitations. The document is essential for businesses seeking to enter the Indonesian market through partnership with local entities, requiring careful consideration of local regulatory requirements, corporate governance structures, and investment protections. The agreement typically includes detailed provisions on capital contribution, management control, profit sharing, technology transfer, and dispute resolution mechanisms, all within the framework of Indonesian law. This document is particularly important given Indonesia's mandatory local partnership requirements in certain sectors and the need for clear documentation of rights and obligations between foreign and domestic partners.

1. Parties: Identification of the JV partners, including full legal names, registration numbers, and addresses

2. Background: Context of the JV formation, including business objectives and partners' expertise

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Formation of Joint Venture Company: Details of the JV company establishment, including name, form, and registration requirements

5. Capital Structure and Funding: Initial capitalization, shareholding ratios, and future funding obligations

6. Business Scope and Objectives: Defined scope of JV activities and business objectives

7. Board Composition and Management: Governance structure, board composition, voting rights, and management appointments

8. Shareholder Rights and Obligations: Key rights and responsibilities of each JV partner

9. Reserved Matters: Decisions requiring special approval from shareholders or board members

10. Transfer of Shares: Rules governing share transfers, including right of first refusal and tag-along rights

11. Financial Matters: Financial management, dividend policy, and accounting principles

12. Intellectual Property Rights: Ownership and usage rights of IP brought into or developed by the JV

13. Confidentiality: Protection of confidential information and trade secrets

14. Non-Competition: Restrictions on competitive activities by JV partners

15. Term and Termination: Duration of the JV and grounds for termination

16. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

17. General Provisions: Standard boilerplate clauses including notices, amendments, and severability