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Simple Investment Agreement for Indonesia

Simple Investment Agreement Template for Indonesia

A Simple Investment Agreement under Indonesian law is a legally binding document that establishes the terms and conditions for an investment transaction between investors and a company. The agreement complies with Indonesian Investment Law (Law No. 25 of 2007) and related regulations, incorporating essential provisions for share subscription, investor rights, and company obligations. This document serves as the primary framework for protecting both investor and company interests while ensuring compliance with local regulatory requirements, including those set by the Investment Coordinating Board (BKPM) and Financial Services Authority (OJK).

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What is a Simple Investment Agreement?

The Simple Investment Agreement is a fundamental legal document used in Indonesian business transactions to formalize investment relationships between investors and companies. This agreement is particularly relevant for early-stage investments, startup funding rounds, and small to medium-sized investment transactions in Indonesia. The document must comply with Indonesian Investment Law and related regulations, including requirements from BKPM and OJK. It typically covers essential elements such as investment amount, share allocation, investor rights, warranties, and governance provisions. The Simple Investment Agreement is designed to be more straightforward than complex shareholders' agreements while still providing adequate protection for all parties involved. It's commonly used when the investment structure is relatively straightforward and doesn't require extensive special terms or multiple classes of shares.

What sections should be included in a Simple Investment Agreement?

1. Parties: Identification of the investor(s) and the company, including their full legal names, registration numbers, and addresses

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

3. Definitions: Definitions of key terms used throughout the agreement

4. Investment Amount and Shares: Details of the investment amount, number and class of shares to be issued, price per share, and payment terms

5. Completion: Conditions precedent, completion mechanics, and timing for the investment

6. Warranties and Representations: Standard warranties from the company and founders regarding the business, assets, and legal compliance

7. Investor Rights: Basic investor protection rights, including information rights and pre-emptive rights

8. Transfer Restrictions: Restrictions on the transfer of shares and any lock-up periods

9. Confidentiality: Obligations regarding confidential information and announcements

10. Notices: Process for giving formal notices under the agreement

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

What sections are optional to include in a Simple Investment Agreement?

1. Anti-Dilution Protection: Protection for investors against future down rounds, included when negotiated by sophisticated investors

2. Board Appointment Rights: Rights of investors to appoint directors, included when investors require board representation

3. Founder Commitments: Specific commitments from founders including non-compete and full-time commitment, included when founders are key to the business

4. Future Funding Rounds: Framework for future investment rounds, included when multiple rounds are anticipated

5. Tag-Along Rights: Rights of investors to join in sales by other shareholders, included for minority investor protection

6. Drag-Along Rights: Rights to force minority shareholders to join in a company sale, included when exit possibilities are important

7. Performance Targets: Specific business targets and consequences, included when investment is linked to performance milestones

What schedules should be included in a Simple Investment Agreement?

1. Schedule 1: Company Information: Detailed corporate information including share capital structure, subsidiaries, and material contracts

2. Schedule 2: Warranties: Detailed warranties given by the company and founders

3. Schedule 3: Completion Requirements: List of documents and actions required for completion

4. Schedule 4: Share Capital Table: Pre and post-investment share capital structure

5. Schedule 5: Business Plan: Summary of company's business plan and use of investment proceeds

6. Appendix A: Deed of Adherence: Template deed for new shareholders joining the agreement

7. Appendix B: Board Resolution: Pro-forma board resolution approving the investment

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

E-commerce

Financial Services

Healthcare

Education Technology

Agriculture Technology

Manufacturing

Renewable Energy

Consumer Goods

Digital Services

Food and Beverage

Retail

Transportation and Logistics

Relevant Teams

Legal

Finance

Corporate Development

Investment

Compliance

Risk Management

Corporate Secretariat

Business Development

Executive Leadership

Strategic Planning

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Director

Legal Counsel

Corporate Secretary

Investment Manager

Business Development Director

Finance Manager

Compliance Officer

Risk Manager

Corporate Lawyer

Investment Analyst

Board Director

Managing Partner

Venture Capital Associate

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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