The Construction Joint Venture Agreement is essential for parties seeking to collaborate on construction projects in Indonesia while complying with local regulatory requirements. This document is particularly relevant when combining technical expertise, financial resources, or local market knowledge between domestic and international partners, or between complementary local firms. It must address specific requirements under Indonesian law, including the Construction Services Law (Law No. 2 of 2017), Investment Law (Law No. 25 of 2007), and various implementing regulations. The agreement typically details capital contributions, profit-sharing arrangements, governance structures, operational responsibilities, and compliance requirements. It's commonly used for large-scale infrastructure projects, commercial developments, or industrial facilities where pooling of resources and expertise is advantageous.
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1. Parties: Identification of the JV partners, including their full legal names, registration details, and addresses
2. Background: Context of the JV formation, description of the construction project, and partners' expertise
3. Definitions: Definitions of key terms used throughout the agreement
4. Formation of Joint Venture: Legal structure, name, registered address, and purpose of the JV
5. Capital Contributions: Details of initial and ongoing capital contributions from each partner
6. Ownership and Profit Sharing: Percentage of ownership and mechanism for profit/loss distribution
7. Management and Control: Governance structure, board composition, voting rights, and decision-making processes
8. Scope of Works: Detailed description of construction project scope and deliverables
9. Roles and Responsibilities: Specific duties and obligations of each JV partner
10. Project Execution: Project timeline, milestones, and execution methodology
11. Financial Management: Banking arrangements, accounting practices, and financial controls
12. Staff and Resources: Personnel commitments, equipment contributions, and resource management
13. Representations and Warranties: Partners' declarations regarding their capacity and authority
14. Compliance and Permits: Responsibility for obtaining and maintaining necessary licenses and permits
15. Term and Termination: Duration of JV and grounds for termination
16. Dispute Resolution: Procedures for resolving disputes between partners
17. Governing Law: Confirmation of Indonesian law as governing law and jurisdiction
18. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement
1. Foreign Investment Provisions: Required when one or more partners are foreign entities, addressing specific foreign investment requirements
2. Technology Transfer: Include when the JV involves transfer of construction technology or knowledge
3. Local Content Requirements: Required when project must meet specific local content quotas
4. Insurance and Indemnification: Detailed section needed for high-risk construction projects
5. Environmental Compliance: Required for projects with significant environmental impact
6. Force Majeure: Detailed provisions for projects in areas prone to natural disasters or political instability
7. Anti-Corruption Compliance: Enhanced provisions when required by foreign partners or international funding
8. Intellectual Property Rights: Include when JV involves proprietary construction methods or designs
1. Schedule 1 - Project Details: Detailed specifications of the construction project
2. Schedule 2 - Capital Contributions: Detailed breakdown of each partner's capital and asset contributions
3. Schedule 3 - Construction Schedule: Detailed project timeline and milestones
4. Schedule 4 - Equipment Schedule: List of equipment to be provided by each partner
5. Schedule 5 - Key Personnel: List of key staff and their roles from each partner
6. Schedule 6 - Insurance Requirements: Details of required insurance coverage
7. Schedule 7 - Forms of Certificates: Template certificates for various project stages
8. Schedule 8 - Technical Specifications: Detailed technical requirements and standards
9. Appendix A - Partner Licenses: Copies of relevant construction and business licenses
10. Appendix B - Site Documents: Site plans, permits, and related documentation
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