The synergistic use of knowledge, systems, equipment and resources is, in most cases, good for the company. Through the joint venture, companies strengthen each other through their sharing and potential. As a form of cooperation, the joint venture is particularly suited to the realization of large projects that would be too difficult or, at the very least, very demanding for a single company. Another objective is to put ourselves in a comfortable position in relation to the competition. In addition, it is often a way to open new markets by working with local partners or simply to put its interests ahead of those of the competition. Some of the topics discussed in a shareholder pact are: The long-standing collaboration between car manufacturers BMW and Brilliance is one of the best known examples of joint ventures. The partners operate in two Chinese factories producing several BMW models, as well as in a factory dedicated to the production of engines. Airbus, Europe`s largest aircraft manufacturer, and Bomber, a Canadian manufacturer of trains and aircraft, have also established cooperation focused on the production and trade of C-Series medium-range aircraft. Joint ventures with commercial enterprises are permitted with the importation of used facilities and machinery. It is not uncommon for more companies to cooperate in synergy. When this cooperation takes place at the international level, with a common objective, we are talking about joint ventures, one of the most widespread forms of business-to-business cooperation. Joint ventures are generally companies active in international markets, which also affects their taxation.
The two different models, contractual and social, also differ in these terms. Indeed, a joint incorporated company follows the normal rules of corporate taxation, while for the joint venture without its own legal personality, the tax burden remains owed to the parent companies. The joint venture is an agreement between two or more companies, of the same nationality or of different nations, that pool their resources to carry out a project and share the risks and revenues generated. The AJE law exists between a Chinese partner and a foreign company. It is available in both Chinese (official) and English (with the same validity) limited liability. Before China`s accession to the WTO – and thus the WFOe – the EJVs dominated. In EJV mode, partners share profits, losses and risks in proportion to their respective contributions to the company`s share capital. These degenerate in the same proportion as the increase in social capital. Normally, the joint venture can be created in the form of a contract or a real company (capital and non-capital), depending on the needs, including time, of the participants.