Joint ventures require more of a direct investment than licensing and require training, management assistance and technology transfer. Joint ventures can be equity or non-equity partnerships. Equity joint ventures are contractual arrangements with equal partners. Non-equity ventures involve the host country partner in the arrangement with a greater percentage. In some countries, a joint venture is the only way for a foreign company to set up operations.
Laws often require that a certain percentage of stock belong to a citizen of the host country.
Foreign manufacturing joint ventures are risky in that geographical and cultural factors may interfere with the smooth running of operations. You will have to deal with entirely new management, located in a different country, whose first language may not be English. Partner Selection Issues Finding a suitable partner is critical to the success of any licensing or manufacturing joint venture arrangement. However, this can be a time consuming and difficult process without proper assistance. Recognizing this fact, the United States government has a special program to facilitate overseas partner selection.