The Intercompany Service Agreement is essential for Indonesian companies operating within group structures that share resources, expertise, or support functions. This document is particularly relevant in the context of Indonesian business operations where companies need to formalize internal service arrangements while ensuring compliance with local regulations, particularly transfer pricing rules and corporate governance requirements. The agreement is commonly used when one entity provides administrative, technical, management, or operational services to another related entity, and requires careful structuring to address Indonesian tax authority scrutiny, currency control regulations, and sector-specific compliance requirements. It serves as a crucial document for demonstrating arm's length transactions and maintaining proper corporate governance in accordance with Law No. 40 of 2007 on Limited Liability Companies and related regulations.
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1. Parties: Identification of the service provider and service recipient companies, including registration details and authorized representatives
2. Background: Context of the agreement, relationship between the parties, and purpose of the service arrangement
3. Definitions: Definitions of key terms used throughout the agreement
4. Scope of Services: Detailed description of services to be provided, including service standards and deliverables
5. Term and Termination: Duration of the agreement, renewal provisions, and termination rights
6. Service Fees and Payment Terms: Pricing methodology, payment schedule, currency, and invoicing requirements
7. Performance Standards: Service levels, KPIs, and quality standards
8. Representations and Warranties: Standard warranties regarding capacity, authority, and service quality
9. Confidentiality: Protection of confidential information exchanged during service provision
10. Intellectual Property: Ownership and usage rights of IP created or used in service delivery
11. Liability and Indemnification: Allocation of risks and responsibilities between parties
12. Force Majeure: Events excusing performance and related procedures
13. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law
14. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment
1. Regulatory Compliance: Required when services are in regulated sectors like financial services or healthcare
2. Data Protection: Required when services involve processing of personal or sensitive data
3. Staff and Employment: Required when services involve deployment of personnel between companies
4. Insurance: Required for high-risk services or when mandated by corporate policies
5. Anti-Corruption: Required when dealing with government-linked companies or high-risk sectors
6. Foreign Exchange Compliance: Required for cross-border service arrangements
7. Tax Compliance: Detailed tax provisions required for complex service arrangements or high-value contracts
8. Business Continuity: Required for critical services or when mandated by industry regulations
1. Service Description Schedule: Detailed description of each service category and specific services
2. Service Levels and KPIs: Detailed performance metrics, measurement methods, and reporting requirements
3. Fee Schedule: Detailed breakdown of fees, calculation methodology, and cost allocation
4. Transfer Pricing Study: Documentation supporting arm's length nature of pricing
5. Personnel Schedule: List of key personnel, roles, and responsibilities if applicable
6. Technical Requirements: Technical specifications and requirements for service delivery
7. Governance and Escalation Procedures: Detailed procedures for contract management and issue resolution
8. Required Regulatory Permits: List of permits and licenses required for service provision
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Financial Services
Technology
Professional Services
Energy
Mining
Consumer Goods
Healthcare
Telecommunications
Logistics
Real Estate
Infrastructure
Relevant Teams
Legal
Finance
Tax
Compliance
Corporate Secretarial
Treasury
Operations
Risk Management
Commercial
Procurement
Shared Services
Relevant Roles
Chief Financial Officer
Legal Director
Tax Director
Compliance Officer
Corporate Secretary
Finance Manager
Legal Counsel
Transfer Pricing Manager
Operations Director
Risk Manager
Commercial Director
Group Services Manager
Treasury Manager
Procurement Manager
Shared Services Director
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