Overseas Joint Ventures

Overseas joint ventures are an alternative to exporting. They enable companies to establish a presence in an overseas market and can in many cases act as a stepping stone to neighbouring markets.

For some companies, overseas joint ventures can be a lower risk way of expanding overseas, in that the risk and cost will be shared between two partners. However, as with any partnership the two parties must be equally committed to the venture, and in an ideal world will work together to try to reduce the associated risks.

Overseas joint ventures are usually undertaken by companies who can see the advantage of working with another party to share knowledge and experience, as well as financial and organisational resources.

Research shows that thousands of joint ventures are undertaken successfully each year. This is due to careful and meticulous planning, trust between the two partners and a shared understanding of the aims of the joint venture.

Failure to plan a joint venture properly may lead to failure of the partnership and could – if the worst happens – prove costly and have a negative impact on the existing business in the UK.

Simon Bedford, UK Trade & Investment’s regional international trade advisor for overseas joint ventures and investment said: “Companies throughout Yorkshire and Humber are increasingly considering joint ventures as an alternative to direct export. In some cases they may currently be working with an agent or distributor and believe the time is right to look at other market entry strategies. In other cases, the company may simply wish to establish a presence overseas and having considered the options (Branch office, Licensing, Strategic Alliance, Subsidiary, and Acquisition) decide that a Joint Venture offers the best solution.

“Whatever the reason for undertaking a joint venture, it is vital that the person or people responsible for setting it up understand how much time they will need to commit to getting it right – and this includes carrying out extensive research before they even consider a partner for the venture.

“In my role at UK Trade & Investment I am able to offer tailored advice to any company in the region considering a Joint Venture or other type of Foreign Direct Investment (FDI). It is best when businesses involve us as early as possible as it is by working with a company and understanding what they want to achieve that we can be of most value. We can look at the alternatives and then offer the support and assistance to ensure they are undertaking the most appropriate market entry strategy for themselves. “

Click here for more information on joint ventures and to access two downloadable UKTI guides.