California businesses may want to look into joint ventures as a way to expand into the international market. Joint ventures allow a company to create an agreement with a foreign entity that is already established and operating under the laws of another country. This process is often much quicker than trying to form a new business in that country. For example, it avoids many of the complications associated with business structure, product liability and taxes.
There are two basic types of joint ventures: corporate or equity joint ventures and non-corporate joint ventures. In the first type, a new entity is created in the country where it is formed. The second type uses a contractual arrangement that does not create a new entity. Entering into either type of joint venture arrangement will require an agreement that details ownership and operating guidelines that are consistent with the laws of the country where the joint venture is formed. In many cases, this will mean drawing up articles of incorporation and bylaws.