Joint Venture
Share ownership with a local partner
Definition
A company jointly owned with a local business, often used where foreign ownership is restricted or local resources are essential.
Suited for
- Sectors with foreign ownership caps
- Projects needing local licences, land or government relationships
Common legal structures
- Joint venture company
- Shareholders' agreement and articles
Preparation
- Partner due diligence
- Agree contributions, governance and exit
- IP ownership
Limitations
- Limited control
- Slower decision-making
Tax notes
- Profit distribution and withholding tax
- Pricing of transactions with either partner
Key risks
- Partner disputes
- Leakage of technology and trade secrets
- Shared compliance liability
Steps
- 1Find partner
- 2Due diligence
- 3Negotiate terms
- 4Approvals and registration
- 5Operations and governance