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The Agency Fee Agreement is a crucial document for companies seeking to expand their commercial presence in Indonesia through local representatives. This agreement type is commonly used when a company (Principal) wishes to engage a local agent to promote and sell their products or services in the Indonesian market without establishing their own direct presence. The document must comply with Indonesian legal requirements, particularly the Civil Code (Kitab Undang-undang Hukum Perdata) and Trade Law No. 7 of 2014. It typically includes detailed provisions on commission calculations, payment terms, territory definitions, and performance expectations. The agreement should be structured to address both parties' commercial interests while ensuring compliance with local agency registration requirements and regulatory frameworks. Special attention is given to currency regulations, tax implications, and mandatory local law provisions.

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

2. Background: Context of the agreement, brief description of the Principal's business, and purpose of the agency arrangement

3. Definitions: Key terms used throughout the agreement, including 'Agency Services', 'Territory', 'Commission', 'Customers', etc.

4. Appointment and Scope: Formal appointment of the Agent and detailed description of authorized services and activities

5. Territory and Exclusivity: Geographic area of operation and whether the agency is exclusive or non-exclusive

6. Agent's Obligations: Detailed responsibilities, performance standards, and compliance requirements

7. Principal's Obligations: Support, information, and resources to be provided by the Principal

8. Commission Structure: Calculation method, rates, and timing of commission payments

9. Payment Terms: Invoice procedures, payment methods, currency, and payment deadlines

10. Term and Termination: Duration of agreement, renewal terms, and termination conditions

11. Confidentiality: Protection of confidential information and trade secrets

12. Governing Law and Dispute Resolution: Applicable law and method of resolving disputes

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