Joint Ventures
Home / Joint Ventures
Joint Ventures in India
The firm specializes in advising foreign companies on their joint ventures with their Indian partners. The services cover drafting, vetting and finalizing the Joint Venture Agreement or Shareholding Agreements prior to the commencement of the incorporation of the joint venture company.
The firm’s founding partner who has 25 plus years of experience in this area handles this area assisted by experienced associates.
Setting up a Joint Venture Company in India
A Foreign Company can choose to opt for the Joint Venture route in India if it becomes necessary due to compulsion of law for taking on an Indian partner. If the Sectoral Cap of the Foreign Direct Investment Policy of the Government of India does not permit a foreign company to hold the full 100% of the equity of an Indian company, in such a case the foreign company or foreign individual must identity and finalize an Indian partner who will hold shares to the extent prescribed in the Indian company
In such cases the firm assists the foreign companies in drafting and finalizing the Joint Venture Agreement or Shareholding Agreements prior to the commencement of the incorporation of the joint venture company. Care is also taken to incorporate the terms of the joint venture in the Articles of Association of the Joint Venture Company.
Even if the law permits 100% shareholding by the foreign company in an Indian incorporated company, it might be necessary for the foreign company to opt for the Joint Venture route wherein technology and financial contribution comes in from an Indian company or the foreign investor decides to utilize the already established distribution or marketing network of the Indian partner.
In the case of a Joint Venture, the foreign investment part of the joint venture is approved either through the automatic approval route (if the business areas fall under the automatic approval route) or through prior approval from the Foreign Investment Promotion Board (FIPB).
A Foreign Company must compulsorily take the Joint Venture route in all those sectors where 100% FDI is not permitted. For e.g. Insurance, Banking, Aviation etc. See Sectoral Cap for more information.