Joint Venture contract and its advantages in Mexico

 

The Joint Venture contract allows for physical as well as moral people to contribute with capital, technology, distribution channels, personel, market knowledge and others in a common specific objective that requires this contributions and capacities.

With this contract different efforts, risks benefits and even responsibilities are shared towards a common goal. What’s more, each party doesn’t compromise its independence or modifies its identities whatsoever, they’re just joint to an objective.

Furthermore, there are different types of Joint ventures such as strategic alliance, co-inversion and contractual; for this to happen there must be at least two involved parties, that for the most part national moreal people or abroad that which to improve their own condition through market positions in the other party parts offering as counter-loan competitive advantages, market expansion possibilities among others.

Because there’s not yet an immediate regulation in mexican legislation to conceive this kind of contract, there must be a regulation in its undoubtedly market character. Being that, the few regulations that the Trad Chamber offers in its 77th and 88th articles that regulate usable dispositions referring Trading Contracts as a whole. Abroad UNIDROIT principle may apply , especially in international trading contracts.

Among the legal requirements for a Joint Venture contract its established a party relationship with negotiations among both parties, terms that must be stipulated through out the contract, as well as obligations and rights from each of the corresponding parts regarding the project, adding to that there must be a definition in the type of contributions and capital or goods that each party brings into play, which is why the type of currency will be the base for all the referring transactions.

Joining what was said before, there could be a public notary validation, however, the formalization of such contract is convenient because it allows that the business transaction can be considered in account to the creation of new companies and influence in the private sector, the after mention contributes to the design of favorable politics for the business people foreseeing the economic wealth and the generation of opportunities for the community.

That being said we can conclude that the Joint Venture contract is a mechanism that offers an optimal solution for the inclusion of new markets when there are not enough resources by which then offers advantages for the exploitation of these, plus, a wide implementation of complex processes that will allow to efficientize time and money.