WHAT IS A JOINT VENTURE?

WHAT IS A JOINT VENTURE?

In the context of the growing global economy, forms of corporate cooperation have also become diverse and abundant to optimize benefits as well as minimize risks. One of the popular models chosen by businesses to cooperate and share resources is the joint venture model.

A joint venture is not only a concept but also a flexible business strategy, helping businesses take advantage of the combined power of different partners. This is one of the most popular forms of joint ventures today that bring opportunities and challenges. So what is a Joint Venture Company? What types of joint ventures are there? Let’  s find out with Siglaw Law Firm through the article below to have a comprehensive view of the importance and effectiveness of joint venture companies in business today.

A joint venture company is a joint venture between two or more domestic enterprises, domestic enterprises and foreign enterprises, between foreign enterprises on the basis of a joint venture contract.

A joint venture company is established in the form of a limited company or share. In particular, the participating parties will have the scope of capital contribution at the enterprise.

Conditions for establishing a joint venture company

According to the provisions of the Enterprise Law 2020, to establish a joint venture company, investors also need certain conditions. The following are some conditions for establishing a joint venture company:

(1) About the subject (investor)

– Individuals: Must have full capacity for civil acts, not while serving imprisonment and other administrative penalties as prescribed.

– Legal entity: legally established, still operating at the time of making the investment.

(2) Financial

– The financial capacity of the investor must correspond to the amount of capital committed to invest in the project. That is, the investor must be able to afford the committed capital

– The bank that keeps the amount invested in the company is a legal bank and is licensed to operate in Vietnam

(3) Legal capital of the company: meet the requirements under Vietnamese law on joint venture companies

(4) In accordance with Vietnamese law, international treaties Vietnam has signed or recognized

In addition to the conditions for establishing a specific joint venture company, enterprises must ensure the conditions for establishing other companies as prescribed by law.

Advantages of Joint Venture Company

(1) A joint venture company is a form of company that really brings many advantages to both Vietnamese and foreign investors.

(2) Participation in a joint venture company not only benefits from profit sharing in proportion to contributed capital but also opens up opportunities to access modern science, and advanced level of economic management. This helps to improve the professional and managerial level of Vietnamese investors

(3) For foreign partners, participation in a joint venture company provides an advantage over the likelihood of success, especially in the local business and legal environment. The understanding and support from Vietnamese investors helps to minimize risks and increase the chances of success, while creating strong competition in the local market.

Although a joint venture company brings many advantages, the form of joint venture enterprise also has disadvantages, specifically as follows:

 (1) Language differences: Joint ventures with foreign enterprises will face many difficulties for enterprises that are still weak in international languages. Especially the language of the business being ventured. Differences are not only in language but also in traditions, customs, customs, business fashion, so conflicts can arise that are not easy to resolve.

(2) Documents and procedures are also quite many and troublesome: If enterprises do not want to waste time, save costs when establishing a joint venture company

(3) Easy to disagree: because the nature of the two companies is separate, when cooperating in joint ventures and implementing strategies to unify the purpose and development direction of the business, there will be conflicting views, easily causing internal conflicts

The reason why you should choose Siglaw Law Firm to establish a joint venture company

1. Legal Compliance: Siglaw Law Firm has a team of experienced legal experts in many fields such as corporate legal, Sublicenses, FDI investment in Vietnam, Work Permit, Intellectual Property, Outward Investment, M&A …. By using professional services, businesses ensure that the company establishment process takes place quickly and efficiently. The use of legal services helps ensure your licensing process is fully compliant with legal regulations, minimizes legal risks, and avoids potential problems in the future
2. Save Time: The process of obtaining a license to set up a joint venture can be tricky. The preparation of documents and the implementation of related procedures can be time-consuming and require professionalism. Using the service helps businesses save time and effort, focusing on the main business. By using the services of Siglaw Law Firm, you can reduce pressure and save time, helping your business focus on other important business activities
3. Professional and Accurate: Professional services will ensure that every procedure and file is prepared correctly and professionally. This helps avoid errors that can cause complexity and cost later on. Besides, Siglaw Law Firm can provide consulting and support services in the process of resolving all legal issues related to the establishment of a joint venture company, helping your business run all activities in the right and legal way
4. Reduce legal risks: Failure to implement sufficient processes and procedures can create great legal risks for businesses. Using a professional service helps mitigate this risk and ensure that the business operates legally.

Above is some basic information Joint venture company. If you have any questions about  the Joint Venture Company Formation Service, you can contact Siglaw Law Firm directly for assistance!

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

• vphn@siglaw.com.vn
• vphcm@siglaw.com.vn

Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.

Southern branch: A9.05 BLOCK A, SkyCenter Building, 5B Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam.

Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City

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