Master Services Agreement in Indonesia: Template, Key Clauses and Local Law (2026)

What a master services agreement does A master services agreement (MSA) is the framework contract that sets the terms for an ongoing services relationship, so each individual project can be ordered under a short statement of work (SOW) without renegotiating the legal terms every time. The MSA holds what stays the same across projects: liability, intellectual property, confidentiality, data protection, payment mechanics and dispute resolution. Each SOW then describes one engagement, its scope, deliverables, timeline and price. For an Indonesian supplier or customer, an MSA saves time and reduces disputes, but Indonesian law adds one requirement that does not apply in most other countries and that can decide whether the contract is valid at all: the language of the agreement. This page explains the key clauses and how Indonesian law shapes them. It is general information, not legal advice. For a specific deal, confirm the position with an Indonesian lawyer. ## The language requirement: read this before anything else Under Law No. 24 of 2009 on the National Flag, Language, Emblem and Anthem, Article 31 requires that a memorandum of understanding or agreement involving an Indonesian state institution, an Indonesian government body, an Indonesian private entity or an Indonesian citizen be made in the Indonesian language (Bahasa Indonesia). A foreign-language version may be used alongside it, and the parties can agree which language prevails. Presidential Regulation No. 63 of 2019 confirms that such documents should include an Indonesian version together with any foreign-language version. This matters because Indonesian courts have, in some cases, treated the absence of an Indonesian version as a ground to declare a contract null and void. In a well-known decision, the West Jakarta District Court in 2013 held an English-only loan agreement void for breaching the language law, a position later supported on appeal. Court practice has been inconsistent, but the risk is real. The safe approach for an MSA with an Indonesian party is to prepare a bilingual agreement, signed in both Indonesian and the foreign language, with a clear clause on which language controls in case of a discrepancy. ## Is a master services agreement binding in Indonesia? Yes, when the four conditions for a valid agreement in Article 1320 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata) are met: the consent of the parties, the capacity to contract, a specific subject matter, and a lawful cause. Article 1338 gives a validly made agreement the binding force of law between the parties (the principle of pacta sunt servanda) and recognises freedom of contract. Electronic contracts are recognised under the Electronic Information and Transactions Law (Law No. 11 of 2008, as amended by Law No. 19 of 2016 and Law No. 1 of 2024) and Government Regulation No. 71 of 2019, though the language requirement still applies. ## Key clauses in an Indonesian master services agreement ### Structure: MSA and statements of work State that the MSA sets the governing terms, that services are ordered through SOWs, that each SOW is subject to the MSA, and which prevails if they conflict (usually the MSA, unless a SOW expressly varies a term). Confirm no SOW is binding until both parties sign it. ### Language and governing version Given the language law, include a clause confirming the agreement is executed in Indonesian and in the foreign language, and which version prevails if there is a discrepancy. This is not boilerplate in Indonesia; it goes to validity. ### Services and performance standards Describe the services at a framework level and set the standard of performance, such as professional delivery in line with industry practice. Project-specific scope lives in the SOW. ### Fees, payment and tax Set how fees are charged, invoiced and paid across SOWs, including currency and late-payment terms. Note that Indonesia generally requires the use of the Rupiah for domestic transactions, subject to exceptions, so address currency carefully. On tax, services are generally subject to value added tax (VAT, known as PPN), and withholding tax (PPh) can apply to service payments. State whether fees are inclusive or exclusive of VAT and how withholding is handled. ### Intellectual property Decide who owns the deliverables and who keeps background intellectual property. Software and creative works are protected by copyright under the Copyright Law (Law No. 28 of 2014), so ownership and licences should be set out expressly. A common position is that each party keeps what it brings and the customer owns the specific deliverables once paid for, with the supplier keeping its reusable tools. ### Confidentiality Protect each party's confidential information, define what it covers and excludes, and set the duration of the obligation and how information is handled on termination. ### Data protection Where the services involve personal data, the Personal Data Protection Law (Law No. 27 of 2022) applies. It distinguishes the data controller, which determines the purpose of processing, from the data processor, which acts on the controller's instructions, and places primary responsibility on the controller. If the supplier processes personal data on the customer's behalf, govern that under a data processing agreement reflecting the Law's requirements, including consent, security and breach handling. ### Warranties, liability and indemnities Give practical warranties and disclaim broad implied terms where the law allows. Cap liability, commonly by reference to fees over a defined period, with carve-outs for items that should not be capped, such as confidentiality breaches, data protection failures or intellectual property infringement indemnities. ### Term, termination and transition Set the MSA term and renewal, the right to terminate for breach, insolvency or convenience, and the effect on open SOWs. Note that Articles 1266 and 1267 of the Civil Code have historically affected termination, so termination clauses are often drafted to waive the need for a court decision to terminate, where permitted. Include a transition or wind-down clause. ### Governing law and dispute resolution Choose Indonesian law where the deal is centred there. For disputes, the courts are the default, but many commercial contracts choose arbitration, for example through the Indonesian National Board of Arbitration (BANI), for a private and enforceable outcome. ## A simple master services agreement structure 1. Parties, recitals and definitions

2. Structure: MSA, SOWs and order of precedence
3. Language and governing version
4. Services and performance standards
5. Fees, invoicing, payment, currency and tax
6. Intellectual property ownership and licences
7. Confidentiality
8. Data protection and processing
9. Warranties, limitation of liability and indemnities
10. Term, termination (addressing Articles 1266 and 1267) and transition
11. Governing law (Indonesia) and dispute resolution
12. General: assignment, notices, force majeure, entire agreement ## Common mistakes in Indonesian MSAs - Signing an English-only MSA with an Indonesian party, risking a challenge to its validity under the language law.

• No prevailing-language clause, so a discrepancy between versions has no agreed resolution.
• Leaving currency and tax (VAT and withholding) silent, creating payment disputes.
• Vague intellectual property ownership, so both sides claim the deliverables.
• Termination clauses that ignore the Civil Code position on judicial termination. ## Keeping master services agreements under control An MSA is never just one document. It is a framework with a growing stack of SOWs beneath it, each adding obligations, deliverables, milestones and payment dates, and in Indonesia each often exists in two languages. The hard part is not signing the MSA. It is keeping every SOW consistent with it, keeping the Indonesian and foreign-language versions aligned, tracking obligations and renewals across the relationship, and knowing which version of each document is the agreed one. That work is the same whether you run one MSA or a dozen, and it is far easier when drafting, per-clause risk review, version history and obligation tracking live in one place rather than across inboxes and shared drives. A single AI contract workspace such as Adira is built around that idea: draft the MSA and its SOWs, see the risky positions clause by clause, track the dates and obligations, and keep one trusted version. Adira is India-first today, with other jurisdictions and additional languages including Indonesian on its roadmap, so for Indonesia-specific positions, including the language requirement, you would still confirm the detail with counsel. The point to take is the direction: a services relationship you can manage is one where the MSA and every SOW stay in one place, consistent, with their obligations and dates in view.