join venture

Joint Venture is a separate unit which involves two or more active participants as partners. Sometimes also referred to as strategic alliances, which include a variety of partners, including nonprofit organizations, businesses and public sector. According to Peter Mahmud joint venture is a contract between two companies to form a new company, the new company is called joint venture. Meanwhile, according to Erman Rajagukguk understanding is a collaboration between the owners of foreign capital with the owner of the national capital under the agreement, so the sense is more skewed in the joint venture that is international. Both the sense that it has a joint venture agreement is an agreement, it must meet the legal conditions of the agreement under the provisions of Article 1320 Civil Code. But in a joint venture arrangement is outside the Civil Code, because joint ventures are included in the agreement that are not named and is not regulated in the Civil Code.
Based on the understanding of the two figures above, we can know the elements contained in the joint venture are:
a. cooperation between national and foreign capital owners
b. form a new company between foreign and national entrepreneurs
c. based on contractual or treaty
But not all enterprises must set up a joint venture between the owners of foreign capital with the owner of the national capital. Types of joint venture agreements, among others:
a. Domestic joint venture
Domestic joint venture established between companies located in the country.
b. International joint venture
International joint venture was established in Indonesia by the two companies where one of them foreign companies.
There are two (2) the specific nature of foreign investment, according to Robert Gilpin, namely:
a. Multi / trans-national (PMN / PTN) make direct investments in foreign countries (foreign direct investment, "FDI"), through the establishment of subsidiaries or branches of companies or takeover of a foreign company, with the goal of supervising the management of a production unit in a foreign country, which is different from investment fortofolio purchase shares in a company.
b. A PMN marked by a parent company and a group of subsidiary or branch companies in different countries with a single container along with the resources management, finance and engineering with vertical integration and sentralisai decision. Judging from the countries involved in PMN, then there are 2 (two) countries linked the country of origin of investment (home state) with the host country (host state) or state that is central to PMN (home country) with another country which is where companies conducts operations or kegiatanya (host country).
According to Erman Rajagukguk understanding of the above joint venture should have its foreign element, it is important we also review our understanding of foreign investment. Definition of foreign investment according to Article 1 of Law No. 1 / 1967 "The definition of foreign investment in this Act only covers direct foreign investment undertaken by or under the provisions of this Act and who used to run the company in Indonesia, in the sense of direct capital owners bear the risk of the investor. "In order to attract foreign investment to Indonesia in general involves three things: that there are opportunities in the economic, legal certainty and political stability. Basically, the joint venture company established on the existence of agreements between foreign and national investors. Sarna employment agreement contains rights and obligations of the parties. The position of the parties in the management determined based on the percentage ownership of company shares. Percentage of shares between foreign and national investors are usually not the same. In general, national investors are minority shareholders, while foreign investors are the majority. This causes the majority shareholders tend to master the management of joint venture companies.
As for the conditions to attract foreign capital are:
a. Terms of economic benefits (economic opportunity)
Namely the existence of economic opportunities for investors, such as close to natural resources, availability of raw materials, availability of locations to establish the plant, availability of labor and the prospective market.
b. Terms of Rule of Law (legal certainity)
Governments must be able to enforce the law and provide security guarantees. Application of regulations and policies, especially the consistency of law enforcement and security and improve the judicial and legal system is a very important requirement in order to attract investors.
c. Terms political stability (political stability)
Foreign investment in a country heavily influenced by the factor of political stability (political stability). The conflict between the political elite or in masyaratkat will affect the investment climate. In addition, not solid socio-political conditions have a significant influence on investment flows.
Capital investment to provide benefits to all parties, not only for investors but also for the economy of the country where capital is invested and for the country of origin of the investors. The government determines the areas of business that require capital investment by various regulations. In addition, the government also determines the amount of capital and the comparison between the national capital and foreign capital. This is done so that such investments can be directed to a goal to be achieved. Not the danger is often a country is unable to determine freely its economic policy, because of the influence and interference of foreign governments.
This is because due to limited capital, skills and technologies owned by our country, and the many countries that require the presence of foreign investors to invest in his country. The government can not just rely on tax revenues, results of oil and non-oil exports, domestic savings and foreign aid. If only rely on these sources, the Indonesian economic growth rate will not increase, for that's needed foreign investment. Indonesia needs foreign capital because:
a. To provide employment;
b. Implement import substitution to boost foreign exchange;
c. Encouraging export to earn foreign exchange;
d. Building lagging regions and infrastructure;
e. For industrialization or technology transfer.
Foreign investment is expected as one source of financing in the construction of infrastructure such as ports, telecommunications, air transportation, drinking water, electricity, clean water, roads, railroads. Foreign investment is needed to develop the technology and the improvement of science, therefore, required substantial funds.