Madaan & Co.

Attorneys at law

International Joint Ventures &

International Joint Ventures, How to draft International Joint Ventures, Legal Aspects of International Joint Ventures, Joint Venture Law, International Joint Venture Agreements
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What is a Joint Venture
How to Enter into a Joint Venture Agreement?

International Joint Ventures


What is a Joint Venture

A typical International Joint Venture is between:

  1. Two international parties, (individuals or companies), incorporate a company. Business of one party is transferred to the company and as consideration for such transfer, shares are issued by the company and subscribed by that party. The other party subscribes for the shares in cash.
  2. The above two parties subscribe to the shares of the joint venture company in agreed proportion, in cash, and start a new business.
  3. Promoter shareholder of an existing company and a third party, who/which may be individual/company, one of them non-resident or both residents, collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash.

Some practical aspects of formation of international joint venture companies and the prerequisites which the parties should take into account are enumerated herein after.

In some countries joint ventures are a separate legal entity, whereas in others they could be any of the available corporate entities.


How to Enter into a Joint Venture Agreement?

Selection of a good local partner is the key to the success of any joint venture. Once a partner is selected generally a Memorandum of Understanding or a Letter of Intent is signed by the parties highlighting the basis of the future joint venture agreement.

International joint ventures should be carefully drafted to avoid complications later on. Lawyers from all jurisdictions involved should be consulted early on.

A Memorandum of Understanding and a Joint Venture Agreement must be signed after consulting lawyers well versed in international laws and multi-jurisdictional laws and procedures.

Before signing the joint venture agreement, the terms should be thoroughly discussed and negotiated to avoid any misunderstanding at a later stage. Negotiations require an understanding of the cultural and legal background of the parties.

Before signing a Joint Venture Agreement the following must be properly addressed:

  • Dispute resolution agreements
  • Applicable law
  • Force Majeure
  • Holding shares
  • Transfer of shares
  • Board of Directors
  • General meeting
  • CEO/MD
  • Management Committee
  • Important decisions with consent of partners
  • Dividend policy
  • Funding
  • Access
  • Change of control
  • Non-Compete
  • Confidentiality
  • Indemnity
  • Assignment.
  • Break of deadlock
  • Termination

The Joint Venture agreement should be subject to obtaining all necessary governmental approvals and licenses within specified period.

See Also

Contact us for setting up joint venture in India

Foreign Investors Establishing Joint Venture in India

Foreign investors planning to joint venture in India are required to seek governmental approval before setting up joint venture in India. See Articles below.

Some approvals are automatic, - RBI Approvals - though application is required for those approvals.

Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed.

See our FDI in India Sector wise Guide for more information on various conditions of investing in India.

Also see Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties


Contact us for setting up joint venture in India


Joint Ventures
Incorporating Corporation in India
Foreign Companies Incorporating in India
Taxes for Foreign Companies in India
Trademarks in India
Dispute Resolution

Services Offered by Us

Madaan & Co. has helped US companies & Foreign companies in setting up their Joint Venture operations in India. Business Joint Ventures are more likely to be beneficial, if Joint Venture Entry Strategies are carefully formulated. Negotiating Joint Ventures properly is very important for a win-win Joint Venture. Proper drafting of Joint Venture Agreements are very important for the success of any joint venture. We can help you in setting up your Joint Venture: from entry strategies, to negotiations to drafting agreements to compliance programs.

Click here to Contact us for setting up Joint Venture in India

Our lawyers include those admitted to bar in the United States of America and India. They have undertaken legal matters in the USA, India and Europe. They understand the multi-cultural and the multi-jurisdictional aspects of international business in this age of globalization. They include those educated at Harvard Law School, Harvard University in the USA and premier universities in India. They believe in high moral and legal ethics. .

Contact us for:
  • Incorporating in a company in India
  • Opening a Branch Office
  • Opening a Project Office
  • Setting up Joint Ventures in India
  • Setting up a subsidiary in India
  • Drafting Agreements
  • Negotiating Agreements
  • Setting up Outsourcing in India
  • Dispute Resolution


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