A Complete Explanation of Joint Ventures that Must Be Known
Do you have a business idea and want to work with other parties? Or you might be considering a business with shared capital? In this article, Journal will discuss the joint venture. What is a joint venture? Joint Venture is a company established by two or more business entities to conduct joint business within a certain period. The two companies are companies originating from within the country with companies from abroad (foreign).
Referring to Law No. 25 of 2007, this joint venture can be categorized as a form of foreign investment activities. The main purpose of establishing a joint venture is for companies that provide economic power to the parent company to gain mutual benefit.
Keep in mind, a joint venture is different from a CV (capital venture). The difference is that the life of the joint venture is shorter than the CV. Members of joint ventures are usually called venture / partners / allies. One of the joint venture companies in Indonesia is PT Nestle Indofood Citarasa Indonesia. PT Nestle Indofood Citarasa Indonesia is a combination of two companies, PT Nestle S.A and PT Indofood Sukses Makmur Tbk.
Regulations Regarding Joint Venture
The regulations on joint ventures are regulated by the law, government regulation and ministerial decree. The following rules have been made:
1. Law Number 1 of 1967 Article 23 concerning Foreign Investment
2. PP Number 7 of 1993 concerning Shareholders of Foreign Investment Companies
3. PP Number 20 Year of Share Ownership in Companies established in the context of foreign investment
4. Decree of the Minister of State for Investment Fund Mobilization / Chairperson of the Investment Coordinating Board Number: 15 / SK / 1994 concerning the provisions on the implementation of share ownership in companies established in the context of foreign investment.
Types of Joint Ventures
There are two types of joint venture contracts, namely domestic and international joint ventures. According to article 8 paragraph (1) of the Decree of the State Minister for Mobilization of Investment Funds / Chairman of the Investment Coordinating Board Number: 15 / SK / 1994 concerning the provisions on the implementation of share ownership in companies established in the context of foreign investment, the business sectors that are required to establish joint venture companies are :
– Production, transmission and distribution of electricity to the public
– Drinking water
– public train
– Atomic power generation
– Mass media or mass media
Joint ventures must be carried out by foreign investment with domestic companies. This is because the business is classified as important for the country and controls the lives of many people. While businesses that are prohibited from planting respectively are fields related to national defense, such as the production of weapons, machinery, blasting equipment, and war equipment.