Document background
The Simple Royalty Agreement serves as a fundamental legal instrument for businesses operating in Indonesia who wish to monetize their intellectual property rights or utilize others' IP through a licensing arrangement. This document is particularly relevant in the Indonesian market where IP commercialization is growing rapidly and foreign investment in local businesses is increasing. The agreement needs to comply with Indonesian Civil Code requirements, relevant IP laws, and tax regulations, especially concerning withholding tax on royalty payments. The Simple Royalty Agreement typically includes provisions for payment terms, calculation methods, reporting requirements, and audit rights, while addressing specific Indonesian regulatory requirements such as mandatory registration of certain IP licenses with the Directorate General of Intellectual Property. This document is essential for both domestic and international businesses engaging in IP licensing transactions within Indonesia.
