Document background
A Sweat Equity Contract is utilized when a company, typically an Indonesian PT (Perseroan Terbatas), wishes to compensate service providers with company ownership instead of traditional monetary payment. This arrangement is particularly common in startup environments, professional services, and technology sectors where cash conservation is crucial for business growth. The document must comply with Indonesian Company Law and related regulations, including specific requirements for share issuance, foreign ownership restrictions if applicable, and corporate governance standards. It typically includes detailed service specifications, equity vesting schedules, performance milestones, and provisions for protecting both parties' interests. This type of agreement is especially relevant for early-stage companies seeking to attract talent or professional services while preserving cash resources.
