Business Contracts Indonesia 2026 | Legal Guide

Q: Do contracts in Indonesia need to be in Indonesian language?

Yes. UU 24/2009 requires contracts involving Indonesian parties to be in Bahasa Indonesia. Best practice is bilingual (Indonesian/English) with a clause stating the Indonesian version prevails in case of conflict.

Q: Are verbal contracts enforceable in Indonesia?

Technically yes under Civil Code, but practically unenforceable without evidence. Always use written contracts with proper signatures and witnesses. Notarization adds legal weight for high-value agreements.

Q: What dispute resolution clause should I include?

Include a tiered clause: negotiation first, then mediation, then arbitration (BANI for domestic, SIAC for international). Avoid Indonesian courts if possible — arbitration is faster, more predictable, and enforceable under the New York Convention.