Brämer & Partner International Project Management


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Joint Ventures

For medium sized enterprises

Kinds of Joint Ventures

In a contractual joint venture the two or more involved companies just conclude a cooperation agreement. This contract regulates the form of collaboration, the contribution of risk and know-how, the target of the cooperation and the allocation of profits. All parties maintain full control over their investment. When indicated this variant is easy to cease and therefore it has low risk. On the other hand it is often not strong enough to achieve the set goals on the target market.

The much stronger but also riskier form of cooperation is the equity joint venture. Here the two (ore more) joint venture partners establish a common company in the target market and assume jointly the financial risk and the management responsibility for the joint venture company. Very often it is absolutely necessary to act in such way because of restrictive regulations in the target country. On the other hand it is usually the only possibility to keep control and influence on the market development, especially when your own business location is in another country. However, one side will learn a lot about technologies, products and/or manufacturing processes of the other side and may use that knowledge after the end of the joint venture for own purposes.

Strategic Motives

There are many reasons why it can be strategic meaningful to establishing of a joint venture together with a German partner. First and foremost, the joint venture is for the development of an international target market. This oftentimes means for the supplier a lot of obstacles which he doesn't know prior to market entry.

The joint venture partner on the ground has just such extensive market knowledge and is well connected in the target market. On the other hand he needs additional imported products to expand his business. Another motive can be the pooling of technical know-how or the utilization of production capacity directly in the target country (e.g. for license production).

In Germany for foreigners or foreign corporations it is possible to own companies or found subsidiaries, but you need at least a general manager on site.

Our services for you

1. Preparation

Prior to the project, we first clarify whether a joint venture is the right alternative for achieving the objectives set. Then we create a profile based on your specified parameters of the optimal joint venture partner. Finally, we clarify the legal and economic feasibility of the project.

2. Implementation

The detailed implementation depends on the nature of the intended joint ventures, on any peculiarities of the target country and on your contribution in the context of the project. Therefore, the following points can be adapted or extended.

  • Selection and analysis of potential joint venture partner in the target country (you'll get a detailed report about all potential partners)
  • Initiation of negotiations (if desired discretely)
  • Negotiation management
  • Preparation and adaptation of the joint venture agreement, including legal, fiscal and economic conditions
  • Formation of the joint venture company
  • Recruiting
  • Implementation of controlled processes in the joint venture company

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