Types of cooperation

It may be the case that there is no attractive option to acquire a
domestic business at the intended point in time and that setting
up a domestic business is also out of the question under the
given circumstances. In such cases it might make sense to
cooperate with domestic businesses through joint ventures and
strategic alliances.

Cooperating with strong, domestic partners
will help investors tap into new markets, resources, and technol-
ogies, reach a critical mass to generate more growth, or share
the risks of equity or technology-intensive projects.

Strictly speaking, a joint venture is based on a contractual
agreement between two or more parties undertaking to pursue
economic activity together. A joint venture is also a company
in its own right where different partners join forces and share
in the control, risk and proft of the company. The purpose is to
pursue the agreed project in the common interest of all parties
involved. Unlike in a merger, the parties generally maintain
their independence and collaborate only when pursuing the
goals of the joint project. Strategic alliances, on the other hand,
are Joint Ventures based on a contractual relationship without
forming a legal entity.

A joint venture created under company law is taxed according to
the chosen legal form, the companies involved, and the regula-
tions of the countries of residence concerned