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An Advisory Agreement is a legal contract where a company or individual hires an expert advisor to provide guidance, recommendations, and strategic input. In Indonesia, these agreements commonly cover business consulting, financial planning, or technical advisory services, following guidelines from the Financial Services Authority (OJK) when involving regulated sectors.

The agreement spells out key details like the advisor's duties, payment terms, confidentiality rules, and service duration. Indonesian law requires these contracts to be clear about the scope of advisory work, especially when dealing with foreign consultants under Ministry of Manpower regulations. They help protect both parties by setting clear expectations and legal boundaries for the advisory relationship.

Consider implementing an Advisory Agreement when bringing in external expertise for business strategy, financial planning, or technical guidance. This agreement becomes essential before engaging consultants or advisors in Indonesia, particularly when seeking specialized knowledge in regulated sectors like banking, capital markets, or fintech.

The agreement proves especially valuable when expanding into new markets, restructuring operations, or navigating complex regulatory requirements under OJK supervision. Indonesian companies often need these agreements when hiring foreign advisors, ensuring compliance with Ministry of Manpower regulations while protecting intellectual property and maintaining confidentiality throughout the advisory relationship.

• Advisory Board Agreement: Used when forming a formal advisory board, outlining multiple advisors' roles, meeting schedules, and collective decision-making processes
• Business Advisor Agreement: Focuses on general business strategy and operational guidance, typically for one-on-one consulting relationships
• Financial Consulting Services Agreement: Specifically designed for financial advisory services, including investment guidance and compliance with OJK regulations

• Companies and Business Owners: Engage advisors to access expertise for growth, restructuring, or market expansion while protecting their interests
• Professional Advisors: Consultants, industry experts, and strategic advisors who provide specialized knowledge under Indonesian consulting regulations
• Legal Teams: Draft and review Advisory Agreements to ensure compliance with OJK requirements and Ministry of Manpower guidelines
• Corporate Secretaries: Manage documentation, ensure proper execution, and maintain records of advisory relationships
• Foreign Consultants: Provide international expertise while adhering to Indonesian work permit requirements and local business regulations

• Advisor Details: Gather full legal name, qualifications, and work permit status for foreign advisors under Indonesian regulations
• Scope Definition: Clearly outline advisory services, deliverables, and timeline aligned with business objectives
• Compensation Structure: Document fee arrangements, payment schedules, and any performance-based incentives
• Compliance Check: Review OJK requirements if dealing with financial services or regulated sectors
• Document Generation: Use our platform to create a legally-sound Advisory Agreement that includes all mandatory elements under Indonesian law
• Final Review: Verify all confidentiality clauses, intellectual property rights, and termination conditions are clearly stated

• Party Information: Complete legal names, addresses, and registration details of both advisor and client
• Service Scope: Detailed description of advisory services, deliverables, and performance metrics
• Term and Termination: Clear start date, duration, and conditions for ending the agreement
• Compensation Terms: Fee structure, payment schedule, and reimbursement policies
• Confidentiality: Protection of business secrets under Indonesian trade secret laws
• Governing Law: Explicit reference to Indonesian law and jurisdiction for dispute resolution
• Regulatory Compliance: Specific mentions of relevant OJK regulations and licensing requirements

An Advisory Agreement differs significantly from an Agency Agreement, though both involve one party providing services to another. Let's explore the key distinctions between these commonly confused documents in the Indonesian legal context.

• Scope of Authority: Advisory Agreements limit the advisor's role to providing recommendations and guidance, while an Agency Agreement grants the agent power to act on behalf of the principal and make binding decisions
• Legal Liability: Advisors typically bear responsibility only for the quality of their advice, while agents can create direct legal obligations for their principals
• Regulatory Framework: Advisory Agreements focus on OJK compliance for specialized consulting, while Agency Agreements fall under broader Indonesian Civil Code provisions for representation
• Duration and Commitment: Advisory relationships are often project-based or periodic, while agency relationships typically involve ongoing operational involvement and deeper integration with the principal's business