INTERNATIONAL JOINT VENTURE CONTRACT - Contract Template and Sample
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The International Joint Venture (www.globalnegotiator.com) governs the relationship between two companies based in different countries, and which set up a third company (the Joint Venture).
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INTERNATIONAL JOINT VENTURE CONTRACT - Contract Template and Sample
- 1. INTERNATIONAL JOINT VENTURE CONTRACT 1. Definition 2. Parties to the Contract 3. Main clauses and sample 3.1 Object of the Joint Venture 3.2 Territory 3.3 Capital stock 3.4 Organization 3.5 Share of profit and losses 4. Law applicable 5. Model Contract www.globalnegotiator.com
- 2. This contract governs the relationship between two companies based in different countries, and which set up a third company (the Joint Venture). This new company would usually be based in the same country as one of the two partner companies, with the intention of jointly establishing an activity with its own objectives: research, commercialization, production, etc. The contract establishes all the agreements necessary to start up and then manage the Joint Venture. 1. DEFINITION www.globalnegotiator.com
- 3. Both parties of the Joint Venture are registered companies. For each party, the following has to be included: • Name of company, full address and nationality. • Company type: public limited company, limited liability company, etc. • Name and position of company representative who signs the agreement. • Tax ID number of both parties. 2. PARTIES TO THE CONTRACT www.globalnegotiator.com
- 4. Some of the most important clauses in the International Joint Venture Contract are as follows: • Object of the Joint Venture • Territory • Capital stock • Organization • Share of profit and losses 3. MAIN CLAUSES AND SAMPLE See sample International Joint Venture Contract www.globalnegotiator.com
- 5. “Both Parties agree to join resources and endeavours according to the stipulations of the present contract in order to: Alternative A. Develop jointly ....................................................................................” Alternative B. Exploit jointly……………....................................................................” Alternative C. Research jointly…………....................................................................” Alternative D. Commercialize jointly...........................................................................” Alternative E. Produce jointly ……………................................................................” 3.1 OBJECT OF THE JOINT VENTURE See sample International Joint Venture Contract
- 6. Alternative A. “The territory in which the Joint Venture is concerned shall be exclusively the whole of .................... [mention country or countries].” Alternative B. “The territory in which the Joint Venture is concerned shall be initially the whole of .................... [mention country or countries], and at a later stage the territory that includes .................... [mention country or countries].” 3.2 TERRITORY See sample International Joint Venture Contract
- 7. “The Capital Stock of the Joint Venture shall be .................... [include amount and currency]. Company A shall contribute .......... % of the Capital Stock and Company B shall contribute .......... % of the Capital Stock.” 3.3 CAPITAL STOCK See sample International Joint Venture Contract
- 8. “The Board of Directors of the company shall be responsible for the general management of the business and affairs thereof, acting according to the legislation of the country in which the Joint Venture is established.” “The Board shall consist of .......... members, of whom .......... shall be appointed by Company A, and .......... by Company B.” “The Board shall meet every .......... months at a minimum, in/at .......... [mention place], or at any other time or place which the Chairman of the Board sees fit.” 3.4 ORGANIZATION See sample International Joint Venture Contract
- 9. “Both Parties shall take a share in the profits and losses of the Joint Venture in proportion to their stake of the Capital Stock.” “Unless otherwise determined by the Parties, the share of profits shall be paid within thirty days of the approval of the Annual Accounts, and within six months of the end of the financial year.” “The Parties may agree that either of them shall receive in advance a part or the whole of their share of the profits.” 3.5 SHARE OF PROFITS AND LOSSES See sample International Joint Venture Contract
- 10. The International Joint Venture Contract shall be drafted taking into account the principles established for the International Trade Centre UNCTAD/OMC for Joint Venture contracts. The parties are free to submit any conflicts regarding the agreement to International Arbitration or to the Laws of the country of one of the parties. They will normally be subject to the Laws of the country where the Joint Venture is established. 4. LAW APPLICABLE See sample International Joint Venture Contract
- 11. In order to obtain the model contract in Word format and the user guide, click on: International Joint Venture Contract 5. MODEL CONTRACT www.globalnegotiator.com