Financial and other considerations for the setting up of international joint ventures

Abstract

International joint ventures have an important role to play as the world moves towards becoming a global market. This study analyses the considerations taken by promoters in joint venture formulation and the feasibility of operating through such a strategy in Malta. A survey conducted among operating joint ventures, as well as Maltese and foreign enterprises operating locally indicated an upward trend in joint venture set up. It is also found that proper feasibility studies together with the setting out of comprehensive Joint Venture Agreements enhance the chances for success and longevity of a joint venture. Financial considerations carry a lot of weight in a joint venture decision, and suggestions by which joint ventures could benefit are made. Joint ventures are also seen to require special additional reporting , and fiscal incentives specifically aimed at joint venturers are thought to be beneficial. Management and cultural diversity of these entities are also discussed. In international joint ventures, an appreciation must be shared of what makes a mutually beneficial partnership to achieve long-term benefits that neither party could achieve alone.