What is a joint venture contract? When should editing be done?

Article overview

A joint venture contract is an agreement between two or more parties to combine resources and share risks and profits to carry out a common business project. This is a popular form of cooperation among businesses that want to expand markets, develop new products or exploit investment opportunities without having to shoulder all the risks themselves. Through the following article, Long Phan will provide customers with detailed information about joint venture contracts.

When is it necessary to draft a joint venture contract?
When is it necessary to draft a joint venture contract?

What is a joint venture contract? Characteristics of joint venture contracts

A joint venture contract is a document containing the parties’ agreement on business cooperation in the form of establishing a new company owned by both parties.

The joint venture contract will have the following characteristics:

  • The purpose of the contract is to establish a new joint venture enterprise;
  • The agreement in the contract is essentially a capital contribution to establish a new business;
  • Regarding the subject of the contract, because the joint venture contract requires the participation of both domestic and foreign investors, for the contract to be valid, the foreign investor must have an additional investment registration certificate;
  • The content of the contract must include agreements related to the establishment of the business, including: type of business, charter,…

When is it necessary to draft a joint venture contract?

Joint venture contracts are often chosen by parties in the following cases:

  • One party wants to expand business activities but does not have enough financial or other potential;
  • In fields such as real estate, oil and gas, manufacturing or high technology, investments requiring large amounts of capital, highly specialized techniques, and risk sharing are necessary. At this time, the parties will need a joint venture contract to clarify the responsibilities, rights and obligations of each party;
  • When the parties wish to share knowledge, experience, and techniques related to business;
  • When a foreign partner wants to take advantage of business opportunities in a specific business industry;
  • In some cases, legal regulations in specific countries may require a joint venture contract to ensure the legal rights of the participating parties, while protecting the public interest.
Cases requiring business contract agreement
Cases requiring business contract agreement

Contents required in a joint venture contract

When agreeing to establish a joint venture contract, the parties should pay attention to the following:

  • Terms on information of parties;
  • Specific purpose of the joint venture contract;
  • Terms of ensuring business secrets and confidential information;
  • Clauses on force majeure cases, factors related to security and public order in a country that can lead to the contract being invalid;
  • Agreement on applicable law;
  • Dispute resolution provisions;
  • Terms related to investment incentives;
  • Provisions on the characteristics of the joint venture enterprise to be established;
  • Terms on the rights and obligations of the parties.
Content of a joint venture contract
Content of a joint venture contract

Latest joint venture contract form

Currently, because there are no specific legal regulations on joint venture contracts as well as the form provided by the law, the content of the joint venture contract will be based on the agreement of the parties as well as the legal regulations related to the business activities of this enterprise, the conditions of the business investment subject. Below, Long Phan will provide the most used joint venture contract form in 2024. We invite you to refer to:

>> See sample joint venture contract here.

Guidance service for drafting standard joint venture contracts at Long Phan

At Long Phan, we provide guidance on drafting standard joint venture contracts, helping you establish a solid and transparent cooperation agreement. Below are the outstanding services we provide:

  • Consulting on regulations related to joint venture activities.
  • Consulting on the rights and obligations of the parties when participating in a joint venture contract.
  • Instructions on drafting joint venture contracts in accordance with regulations.
  • Support reviewing and re-examining drafted contracts to ensure the rights of both parties.
  • Support in the process of negotiating contract terms, helping the parties reach consensus.
  • Advise on resolution methods when disputes arise.
  • Consulting on other related issues.

Joint venture contract drafting guidance service at Long Phan not only helps you ensure compliance with regulations but also helps build a sustainable and effective cooperative relationship. We are committed to providing you with comprehensive support, from the first steps of preparation until the contract is signed and actual implementation. Please contact Long Phan via the hotline: 0906735386 for advice and support in drafting a standard joint venture contract today!