Joint venture is a form really brings many advantages for Vietnamese and foreign investors. Dragon Law Firm with high reputable lawyers shall support with overview information of joint venture enterprise.
Legal Capital
Legal capital of the joint venture enterprise must be at least 30% invested capital. For the investment project of infrastructure construction, projects in the province to encourage investment, reforestation projects, projects with a large scale, this ratio may be lower, but no less 20% invested capital and must be approved by investment license agency.
Capital contribution ratio of the party or parties of foreign joint venture will be agreed by the parties, but not less than 30% of legal capital of the joint venture enterprise.
Based on the field of business, technology, market, business efficiency and other economic - social benefits of projects, the investment licensing agencies may consider to allow foreign joint venture party have lower capital contribution ratio, but not less than 20% of legal capital.
Features of the joint venture enterprise are coordinated to contribute capital to invest in production and business of foreign investors and Vietnamese investors. The ratio of capital contribution of each party will decide to participate in the management level of the enterprise, enjoy the profit rate as well as risks.
Advantages
For Vietnamese investors, joining in joint venture enterprise, they not only share the profits in proportion of capital contribution, but also can access to the modern technology, advanced economic management skills. For the foreign party, the advantage is guaranteed a higher opportunity of success because the legal and business environment can be controlled by Vietnamese party.
Disadvantages
However, the form of joint venture enterprise also has the disadvantages. The tightly bound in a common legal entity between the parties completely different not only languages but also about traditions, customs, habits, business style, so it may arise conflicts is not easy to solve.
Having high experience in providing the legal solutions on foreign investment in Vietnam, Dragon Law will support to our Customers at the following contact:
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Dragon Law Firm - Hotline: 1900.599.979
Website: www.vanphongluatsu.com.vn - www.dragonlaw.vn
Email: dragonlawfirm@gmail.com
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