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The Foreign Agency Agreement is a crucial document for foreign companies seeking to establish a commercial presence in Indonesia through local representation. This agreement type is specifically designed to comply with Indonesian agency laws and foreign investment regulations while protecting the interests of both the foreign principal and the local agent. It is commonly used when a foreign company wants to enter the Indonesian market without establishing a direct presence, preferring to operate through a local agent who understands the market and has established networks. The document must address specific Indonesian legal requirements, including mandatory use of the Indonesian language alongside any foreign language version, and typically includes detailed provisions on territory rights, commission structures, compliance with local regulations, and dispute resolution mechanisms. The agreement must align with Law No. 7 of 2014 on Trade and related regulations governing foreign business relationships in Indonesia.

1. Parties: Identification of the Principal (foreign company) and the Agent (Indonesian entity), including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, brief description of both parties' businesses, and the purpose of the agency relationship

3. Definitions: Definitions of key terms used throughout the agreement, including specific Indonesian legal and business terms

4. Appointment and Scope: Terms of agent's appointment, exclusivity status, and detailed scope of authority

5. Territory: Definition of the geographical area within Indonesia where the agent is authorized to operate

6. Agent's Rights and Obligations: Detailed description of agent's responsibilities, reporting requirements, and performance standards

7. Principal's Rights and Obligations: Principal's commitments, support provisions, and obligations to the agent

8. Commission Structure: Detailed commission calculations, payment terms, and currency specifications

9. Intellectual Property Rights: Protection and usage rights of principal's trademarks, patents, and other IP in Indonesia

10. Confidentiality: Provisions for protecting confidential information and trade secrets

11. Compliance with Laws: Obligations to comply with Indonesian laws, anti-corruption provisions, and reporting requirements

12. Term and Termination: Duration of agreement, renewal terms, and grounds for termination

13. Post-Termination Obligations: Obligations and restrictions following agreement termination

14. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanisms

15. Language: Specification that agreement is in both Indonesian and English, with one version prevailing

16. General Provisions: Standard boilerplate clauses including force majeure, notices, and amendments