Software License Agreement in Indonesia: Template, Key Clauses and Local Law (2026)

A software license agreement is the contract that gives a user the right to use software the licensor owns, on defined terms, without transferring ownership. In Indonesia these agreements are governed mainly by copyright law, and there is one local step that foreign licensors often miss: the recordal of license agreements with the intellectual property office. This guide explains the local law, the clauses that matter, and a template outline. It is general information, not legal advice. ## How is software protected in Indonesia? Software is protected as a copyright work. The Copyright Law (Law No. 28 of 2014) treats computer programs, including source code and object code, as protected creations. Protection arises automatically when the work is created, so formal registration is not required for the copyright to exist. Recordation of a copyright work with the Directorate General of Intellectual Property (DGIP) is optional and serves as evidence of ownership. Because software is copyright, a license agreement is a grant of permission to use that copyright work. The licensor keeps ownership; the licensee gets defined usage rights. ## The recordal of license agreements This is the step to plan for. Under the Copyright Law and related intellectual property laws, a license agreement should be recorded with the DGIP at the Ministry of Law. The practical significance is enforceability against third parties: an unrecorded license may not be effective against third parties, which can matter in a dispute or an insolvency. Implementing rules (including Government Regulation No. 36 of 2018 on recordation of intellectual property license agreements) set out the process, and in some cases the underlying work must be recorded before its license can be recorded. Treat recordal as a compliance item to confirm and schedule, not an afterthought. ## The Indonesian language requirement Where an Indonesian party is involved, Article 31 of Law No. 24 of 2009 calls for an Indonesian-language version of the agreement. Courts have in the past voided English-only contracts with Indonesian parties, and while a 2023 Supreme Court circular softened that position, the low-risk route is a bilingual Indonesian and English agreement, executed together, naming the version that prevails. ## Electronic delivery and acceptance Software is often licensed online through a clickwrap or shrinkwrap flow. The Electronic Information and Transactions Law (Law No. 11 of 2008, as amended) recognises electronic contracts and signatures, so an online acceptance can bind the licensee if the conditions for a valid contract are met and the terms were genuinely available to read. ## Key clauses in a software license agreement | Clause | What it should cover | | --- | --- | | Grant of licence | Scope: perpetual or term, exclusive or non-exclusive, number of users or devices | | Permitted use | Internal use, locations, environments, and any usage metrics | | Restrictions | No reverse engineering beyond what law allows, no sublicensing, no transfer | | Delivery and acceptance | How the software is delivered and when it is accepted | | Fees and payment | Licence fee, maintenance fee, currency, taxes, late payment interest | | Intellectual property | Licensor keeps ownership; feedback and any custom work | | Maintenance and support | Updates, patches, support levels, if included | | Warranties | Limited performance warranty, disclaimer of implied warranties to the extent allowed | | Indemnity | IP infringement indemnity from the licensor | | Limitation of liability | Cap and exclusion of indirect loss | | Confidentiality | Protect source code and non-public materials | | Term and termination | Duration, termination for breach, effect on the licence | | Audit | Licensor's right to verify compliance with usage limits | | Governing law and disputes | Governing law, and court or arbitration | ## Open-source components Most commercial software includes open-source components under their own licences. A license agreement should address this honestly: identify that open-source is used, confirm the licensor's rights to distribute it, and make clear that open-source terms govern those components. This avoids a mismatch between what the agreement grants and what the underlying licences require. ## A template outline you can adapt 1. Parties and definitions 2. Grant of licence and scope 3. Permitted use and restrictions 4. Delivery, installation and acceptance 5. Fees, taxes and payment 6. Maintenance and support, if any 7. Intellectual property and open-source components 8. Warranties and disclaimers 9. IP infringement indemnity 10. Limitation of liability 11. Confidentiality 12. Term and termination 13. Audit rights 14. Governing law, language and dispute resolution, with recordal noted ## Common mistakes to avoid - Forgetting to record the license agreement with the DGIP, weakening it against third parties.

• An English-only agreement with an Indonesian licensee.
• A vague licence grant that does not define users, devices or term.
• Ignoring open-source components already inside the software.
• No IP infringement indemnity to protect the licensee. ## Keeping software licences organised A software business licenses to many customers, and a buyer licenses many products. Either way the work repeats: draft from a consistent template, check the grant and the caps, track renewal and maintenance dates, record where recordal is needed, and keep the signed version straight. Doing that in scattered files is where usage limits and renewal dates get lost. Teams increasingly keep drafting, per-clause risk review, version history and date tracking in one connected workspace. Adira is an AI contract workspace built for exactly that. Adira is India-first today, and deeper non-India jurisdiction support, including Indonesia, is on its roadmap, so confirm Indonesian copyright and recordal specifics with local counsel. This article is general information and not legal advice.