Consultancy agreement in Indonesia: Template, Key Clauses and Local Law (2026)

What is a consultancy agreement in Indonesia, and when do you need one? A consultancy agreement in Indonesia is a contract between a company (the client) and an independent consultant who provides expert services for a fee. You need one when you want expertise without taking on an employee: advisory work, a defined project, or specialist support delivered by someone running their own business. The key thing to understand before you draft is that Indonesia does not have a strong, settled category of the individual independent contractor the way some common-law countries do. The main framework for work by individuals is employment law, so a consultancy arrangement that looks and behaves like a job carries a real risk of being treated as employment, with the permanent protections and costs that follow. A genuine consultancy sits on the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata), which lets parties agree their own terms, rather than on the Manpower Law. The safest consultancy is one with a company or a professional who clearly runs an independent business, controls how the work is done, serves other clients, and is paid against invoices. Two general rules still apply. Under Law No. 24 of 2009, an agreement with an Indonesian party should be in the Indonesian language, bilingual if English is also needed. And payments attract withholding tax: a fee to a domestic service provider is generally subject to Article 23 income tax, while a fee to a foreign provider is subject to Article 26. This article is general guidance, not legal advice. Have an Indonesian lawyer and tax adviser review a consultancy agreement before you rely on it. Last verified October 2026. ## Indonesia consultancy agreement template Copy the block below and fill the bracketed fields. Issue it in Bahasa Indonesia, or bilingual with Bahasa prevailing. ```

CONSULTANCY AGREEMENT / PERJANJIAN KONSULTANSI This Consultancy Agreement (the "Agreement") is made on [DATE] BETWEEN: [CLIENT NAME], a company at [address] (the "Client") AND [CONSULTANT NAME], of [address], NPWP [tax number] (the "Consultant") 1. SERVICES The Consultant provides the services in Schedule 1 (the "Services") and decides the manner, means and hours of performing them, using its own skill, tools and personnel. 2. INDEPENDENT STATUS The Consultant acts as an independent service provider, not an employee, and is not entitled to wages, BPJS, THR, leave or other employee benefits. The Consultant serves other clients and runs its own business. 3. FEES AND TAX The Client pays IDR [AMOUNT], invoiced [schedule] and due within [N] days. The Client withholds Article 23 income tax from a domestic Consultant (or Article 26 from a foreign Consultant) and remits it, and gives the Consultant the withholding slip. VAT (PPN) is added where the Consultant is a registered taxable entrepreneur. 4. INTELLECTUAL PROPERTY Deliverables created for the Client belong to the Client on full payment, and the Consultant assigns those rights. The Consultant keeps its pre-existing material and licenses it for use in the deliverables. 5. CONFIDENTIALITY AND DATA The Consultant keeps the Client's information confidential, uses it only for the Services, and complies with the Personal Data Protection Law for any personal data it processes. 6. TERM AND TERMINATION The Agreement runs from [START] for [term]. Either party may end it on [N] days notice, or at once for material breach. Fees earned to the end date remain payable. 7. LIABILITY To the extent the law allows, the Consultant's total liability is capped at [the fees paid], and neither party is liable for indirect loss. 8. GOVERNING LAW AND LANGUAGE This Agreement is governed by Indonesian law and made in the Indonesian language [and English, with the Indonesian version prevailing]. Signed: Client: __________________ Consultant: __________________ Name / title / date Name / title / date

- **Fees and tax (clause 3).** Withhold Article 23 income tax on a service fee to a domestic provider and Article 26 on a fee to a foreign provider, then remit and issue the slip. Add VAT (PPN) where the consultant is a registered taxable entrepreneur. State clearly whether the fee is before or after these taxes, and confirm current rates with a tax adviser.
- **Intellectual property (clause 4).** Assign deliverables on payment and let the consultant keep its background material, since commissioned work is not automatically the client's.
- **Confidentiality and data (clause 5).** Where personal data is handled, the Personal Data Protection Law (Law No. 27 of 2022) applies, so bind the consultant to it.
- **Language (clause 8).** Issue the agreement in Bahasa Indonesia, or bilingual, because an Indonesian-only or bilingual document is far safer than an English-only one with an Indonesian party. ## Key local-law points - **No strong independent-contractor category.** Work by individuals is viewed mainly through employment law, so a consultancy that behaves like a job can be reclassified as employment, bringing minimum wage, BPJS, THR and termination protections. Engaging a company or a clearly independent professional is safer than engaging an individual who works like staff.
- **Language.** Law No. 24 of 2009 requires an agreement with an Indonesian party to be in Bahasa Indonesia. Indonesian courts have voided English-only contracts with Indonesian parties.
- **Withholding tax.** Article 23 (domestic) and Article 26 (foreign) income tax apply to service fees, and VAT may apply. Getting the withholding wrong leaves the client exposed.
- **Personal Data Protection Law.** Where personal data is processed, Law No. 27 of 2022 imposes duties the agreement should reflect. ## Red flags to avoid - Engaging one individual full-time, exclusively and under your daily control, then calling them a consultant. That is the pattern most likely to be treated as employment.
- An English-only agreement with an Indonesian consultant, which risks unenforceability.
- Ignoring Article 23 or Article 26 withholding, leaving the client liable for the shortfall.
- No IP assignment, so ownership of deliverables is unclear.
- Promising none of the employee benefits in writing while behaving as an employer in practice. Keep the engagement genuinely independent, the language compliant and the tax treatment clean, and the template above will serve most Indonesian consultancy arrangements. ## Where a contract workspace helps The template produces one sound consultancy agreement. The ongoing work is the part that repeats across many engagements: keeping the independence language consistent so none drifts toward employment, keeping bilingual versions aligned, getting Article 23 and Article 26 withholding right each time, and tracking when each engagement ends. Drafting from a standard tuned to how your company engages consultants, having the classification and tax wording flagged as you review, and tracking every term can sit in one AI contract workspace instead of scattered files and tax notes. [Adira](https://adiralaw.com) is one such workspace. Its established depth today is in Indian corporate law, so Indonesian specifics are a roadmap capability rather than settled, and local output should be reviewed by an Indonesian adviser. The idea stands on its own: when drafting, review and tracking live in one place, a consultancy arrangement is far less likely to quietly turn into an employment problem.