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Letter Of Investment Agreement for Indonesia

Letter Of Investment Agreement Template for Indonesia

A Letter of Investment Agreement under Indonesian law serves as a formal document outlining the terms and conditions of an investment transaction between parties. It encompasses key elements such as investment amount, shareholding details, conditions precedent, and closing mechanics, all while adhering to Indonesian investment regulations, including Law No. 25 of 2007 on Investment and relevant foreign investment restrictions. The document provides a legally binding framework that protects both investor and investee interests while ensuring compliance with local corporate and investment laws.

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What is a Letter Of Investment Agreement?

The Letter of Investment Agreement is a crucial document in Indonesian business transactions, used when an investor (domestic or foreign) intends to make a capital investment in an Indonesian company. This document type is essential for formalizing investment terms while ensuring compliance with Indonesian investment laws, including Law No. 25 of 2007 and the Positive Investment List (Presidential Regulation No. 10 of 2021). The agreement typically covers investment amount, shareholding details, conditions precedent, representations and warranties, and closing mechanics. It's particularly important in contexts where parties need a formal but relatively straightforward investment document that bridges the gap between an initial term sheet and more complex definitive agreements.

What sections should be included in a Letter Of Investment Agreement?

1. Parties: Full legal names and addresses of the investor(s) and investee company

2. Background: Context of the investment, brief description of the company and purpose of the investment

3. Definitions: Key terms used throughout the agreement

4. Investment Amount: Specific amount to be invested and currency

5. Investment Terms: Form of investment (equity, convertible note, etc.) and key terms

6. Conditions Precedent: Conditions that must be met before the investment is made

7. Closing Mechanics: Process and timeline for completing the investment

8. Representations and Warranties: Standard declarations by both parties about their capacity and authority

9. Governing Law: Confirmation of Indonesian law as governing law

10. Signatures: Execution blocks for all parties

What sections are optional to include in a Letter Of Investment Agreement?

1. Multiple Closing Provisions: Required when investment will be made in multiple tranches

2. Special Rights: For cases where investor receives specific rights (board seat, veto rights, etc.)

3. Anti-dilution Protection: Protection mechanisms for investor's ownership percentage

4. Tag-Along Rights: Right to join in sale of shares by other shareholders

5. Foreign Investment Provisions: Required when investor is not Indonesian

6. Currency Conversion: Required when investment is made in foreign currency

7. Regulatory Compliance: Special provisions for regulated industries

What schedules should be included in a Letter Of Investment Agreement?

1. Schedule A - Company Information: Corporate details, shareholding structure, and capitalization table

2. Schedule B - Investment Terms Summary: Detailed breakdown of investment terms and valuations

3. Schedule C - Conditions Precedent Checklist: List of all conditions to be satisfied before closing

4. Schedule D - Required Regulatory Approvals: List of necessary government or regulatory approvals

5. Schedule E - Closing Deliverables: List of documents and actions required at closing

6. Appendix 1 - Form of Board Resolution: Template for company board resolution approving investment

7. Appendix 2 - Form of Shareholders Resolution: Template for shareholders' approval if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions












































Clauses


































Relevant Industries

Technology

Manufacturing

Financial Services

Real Estate

Infrastructure

Agriculture

Mining

Renewable Energy

E-commerce

Healthcare

Education

Food and Beverage

Retail

Transportation

Tourism

Relevant Teams

Legal

Finance

Corporate Development

Investment

Compliance

Risk Management

Executive Leadership

Corporate Secretariat

Business Development

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Investment Director

Corporate Secretary

Legal Counsel

Investment Manager

Finance Director

Business Development Director

Compliance Officer

Risk Manager

Board Member

Managing Director

Investment Analyst

Corporate Development Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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