Joint Ventures (JV) are a form of cooperation in which two or more parties agree to pool their resources for the purpose of accomplishing a new project or any other business activity.
The Joint Venture is a distinct entity, separate and apart from the participants’ other business interests and is often set up as a newly registered company (NewCo), with financing provided entirely or partially by the participants.
A Joint Ventures is a typical cooperation model used to partner up with a local business to enter a foreign market. The cooperation may envisage the supply of technology for the construction and operation of a new local production facility or a simpler commercial cooperation whereby the local JV entity may add value to imported products and services. Some countries have restrictions on foreigners entering their market, making a JV with a local entity almost the only way to enter the country.
When the participants get together for the pursuit of a temporary business such as construction project, the cooperation may instead be set up in the form of a consortium, which is a temporary association formed to undertake an assignment that requires the provision of resources by all of its members.
What do we offer?
BEN provides assistance for the development and set-up of new ventures.
We hold the experience and methodology to assist you in all the phases of work:
- Scouting and identification of local partners
- Market survey
- Preparation of the feasibility study
- Preparation of the business plan
- Preparation of the JV agreement (or consortium agreement)
- Information for financing institutions
- Preparation of the division of work (DOW)
- Finalization of the negotiation with the partners.
Regardless of the legal structure used for the cooperation, the most important document will be the JV or consortium agreement, that sets out all of the partners’ rights and obligations.
The objectives of the cooperation, the initial and subsequent contributions of the partners, the governance rules, the procedures for the organization of operations and the right to the profits (and responsibility for losses) of the cooperation are all set out in the initial agreement. It is important to draft it with care, to avoid misunderstandings and risks.
We do believe that the set-up of a JV may be an important strategic move for your company, and a professional and expert support may be extremely beneficial.