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Joint Venture Construction Agreement for Indonesia

Joint Venture Construction Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that establishes a joint venture between two or more parties for the purpose of executing construction projects. The agreement combines elements of both joint venture structuring and construction project management, complying with Indonesian investment laws (Law No. 25 of 2007) and construction services regulations (Law No. 2 of 2017). It details capital contributions, profit sharing, project execution responsibilities, governance structure, and risk allocation while ensuring compliance with local content requirements and foreign investment restrictions specific to Indonesia's construction sector.

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Joint Venture Construction Agreement

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What is a Joint Venture Construction Agreement?

The Joint Venture Construction Agreement is essential for construction projects in Indonesia where multiple parties combine their resources, expertise, and capital to undertake significant construction works. This document is particularly relevant when foreign construction companies seek to enter the Indonesian market, as regulations often require collaboration with local partners. The agreement must comply with Indonesia's Investment Law (Law No. 25 of 2007), Construction Services Law (Law No. 2 of 2017), and various implementing regulations that govern foreign ownership limits, local content requirements, and construction permits. It typically includes detailed provisions on capital contribution, profit sharing, project execution, governance structure, and risk allocation, while addressing specific requirements for technology transfer and local workforce development as mandated by Indonesian regulations.

What sections should be included in a Joint Venture Construction Agreement?

1. Parties: Identification of all parties entering into the joint venture construction agreement

2. Background: Context of the agreement, including project overview and parties' intentions

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

4. Joint Venture Formation: Legal structure, name, and registration requirements of the joint venture

5. Capital Contributions: Details of initial and subsequent capital contributions from each party

6. Ownership and Profit Sharing: Shareholding structure and profit/loss distribution mechanisms

7. Project Scope: Detailed description of the construction project, specifications, and deliverables

8. Management and Control: Governance structure, decision-making processes, and management responsibilities

9. Rights and Obligations: Specific rights and obligations of each party in the joint venture

10. Construction Schedule: Project timeline, milestones, and completion dates

11. Financial Provisions: Budget, cost allocation, accounting procedures, and financial management

12. Personnel and Resources: Staffing requirements, resource allocation, and personnel management

13. Compliance and Permits: Regulatory compliance requirements and responsibility for obtaining permits

14. Insurance and Indemnification: Insurance requirements and indemnification obligations

15. Intellectual Property: Ownership and usage rights of intellectual property

16. Confidentiality: Protection of confidential information and trade secrets

17. Term and Termination: Duration of the agreement and termination provisions

18. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

19. Force Majeure: Provisions for handling unforeseen circumstances and force majeure events

20. General Provisions: Standard boilerplate clauses including notices, amendments, and assignments

What sections are optional to include in a Joint Venture Construction Agreement?

1. Local Content Requirements: Required when project must meet Indonesian local content requirements

2. Environmental Compliance: Required for projects with significant environmental impact

3. Community Relations: Required for projects affecting local communities or requiring community engagement

4. Technology Transfer: Required when foreign parties are involved and technology transfer is part of the arrangement

5. Special Tax Provisions: Required when specific tax arrangements or incentives apply to the project

6. Foreign Currency Provisions: Required when project involves significant foreign currency transactions

7. Land Acquisition: Required when project involves land procurement or rights acquisition

8. Security Arrangements: Required for high-security or sensitive projects

What schedules should be included in a Joint Venture Construction Agreement?

1. Project Specifications: Detailed technical specifications and requirements for the construction project

2. Construction Timeline: Detailed project schedule with milestones and deadlines

3. Capital Contribution Schedule: Detailed breakdown of capital contributions and timing

4. Financial Model: Project financial projections and assumptions

5. Personnel Structure: Organization chart and key personnel responsibilities

6. Equipment and Resources: List of required equipment and resources with specifications

7. Insurance Requirements: Detailed insurance coverage requirements and limits

8. Permits and Licenses: List of required permits and licenses with status

9. Quality Assurance Plan: Quality control procedures and standards

10. Health and Safety Plan: Safety procedures and requirements

11. Environmental Management Plan: Environmental protection measures and monitoring procedures

12. Form of Performance Bond: Template for required performance bonds

13. Shareholder Agreement: Detailed terms of shareholder relationships and governance

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

Construction

Infrastructure Development

Real Estate

Industrial Development

Energy

Transportation

Mining

Commercial Property

Hospitality

Healthcare Facilities

Educational Facilities

Telecommunications

Public Works

Residential Development

Relevant Teams

Legal

Construction

Project Management

Finance

Operations

Commercial

Business Development

Risk Management

Compliance

Technical Services

Investment

Corporate Development

Procurement

Joint Venture Operations

Relevant Roles

Chief Executive Officer

Managing Director

Construction Project Manager

Legal Counsel

Chief Financial Officer

Operations Director

Commercial Director

Business Development Manager

Contract Manager

Risk Manager

Joint Venture Manager

Construction Director

Technical Director

Compliance Officer

Project Development Manager

Investment 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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