INTERNATIONAL JOINT VENTURE AgREEmENT

1. Definition2. Parties to the Agreement3. 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 losses4. Applicable Law5. Model Agreement

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This agreement 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 agreement establishes all the agreements necessary to start up and then manage the Joint Venture.

1. DEFINITION

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Both parties of the Joint Venture are registered companies. For each party, the following has to be included:

• Nameof company,fulladdressandnationality.• Companytype:publiclimitedcompany,limitedliability company, etc.• Nameandpositionof companyrepresentativewhosigns the agreement. • TaxIDnumberof bothparties.

2. PARTIES TO THE AgREEmENT

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Some of the most important clauses in the InternationalJointVentureAgreementareasfollows:

• Objectof theJointVenture• Territory• Capitalstock• Organization• Shareof profitandlosses

3. mAIN CLAUSES AND SAmPLE

SeesampleInternationalJointVentureAgreement

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“Both Parties agree to join resources and endeavours according to the stipulations

of the present agreement in order to:

Alternative A. Develop jointly ....................................................................................”

Alternative B. Exploitjointly……………....................................................................”

Alternative C.Researchjointly…………....................................................................”

Alternative D. Commercialize jointly...........................................................................”

Alternative E.Producejointly……………................................................................”

3.1 OBJECT OF THE JOINT VENTURE

See sample International Joint Venture Agreement

Alternative A. “The territory in which the Joint Venture is concerned

shallbeexclusivelythewholeof ....................[mention country or

countries].”

Alternative B. “The territory in which the Joint Venture is

concernedshallbeinitiallythewholeof ....................[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 Agreement

“The Capital Stock of the Joint Venture shall be ....................

[includeamountandcurrency].CompanyAshallcontribute

.......... % of the Capital Stock and Company B shall

contribute .......... % of the Capital Stock.”

3.3 CAPITAL STOCK

See sample International Joint Venture Agreement

“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 ..........

[mentionplace],oratanyothertimeorplacewhichtheChairmanof the

Board sees fit.”

3.4 ORgANIZATION

See sample International Joint Venture Agreement

“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

withinsixmonthsof theendof thefinancialyear.”

“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 Agreement

TheInternationalJointVentureAgreementshallbedrafted taking into account the principles established for theInternationalTradeCentreUNCTAD/OMCforJointVenture agreements.

The parties are free to submit any conflicts regarding the agreementtoInternationalArbitrationortotheLawsof thecountry of one of the parties. They will normally be subject to the Laws of the country where the Joint Venture is established.

4. APPLICABLE LAw

See sample International Joint Venture Agreement

InordertoobtainthemodelagreementinWord format and the user guide, click on:

InternationalJointVentureAgreement

5. mODEL AgREEmENT

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