A Joint Venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity.
In a JV, each of the participants is responsible for profits, losses, and costs associated with it. However, the venture is its own entity, separate from the participants’ other business interests. Although they are a partnership in the colloquial sense of the word, they can take on any legal structure- there will be no transfer of ownership and a new company may be formed.
In the United Arab Emirates, the joint venture is one of the most popular forms of doing business, as it allows foreign entrepreneurs or companies to associate with a local company under a contractually binding agreement. Likewise, the joint venture offers the same protection and advantages as a Limited Liability Company.
At present, there is no particular or specific law that sets of JV regulations. However, there are pieces of regulations that show how a particular JV might be formed and operate, one of which is the United Arab Emirates Commercial Companies Law.
Thus, before entering into a joint venture, it is strongly recommended to seek expert opinion or advice from any lawyers in the country.