Free Legal Advice Philippines

Disclaimer: This web site is designed for general information only and does not create attorney-client relationship. Persons accessing this site are encouraged to seek independent counsel for legal advice regarding their individual legal issues.

Log in

I forgot my password




You are not connected. Please login or register

Joint Venture Between Two Foreign Companies

View previous topic View next topic Go down  Message [Page 1 of 1]

1 Joint Venture Between Two Foreign Companies on Sat Oct 22, 2016 9:13 am

dnnschua


Arresto Menor
We wish to enter into a bidding which normally allows 100% Foreign companies to join due to the impossibility of local companies to complete the project. Certain circumstances, both financially and legally, necessitate Foreign Company A to JV with Foreign Company B. Our Local Company will merely represent them.

Question:
Is this allowed?

I cannot find anything in RA9184 about this scenario.

Typically, JVs are required to be at least 60% Filipino owned but if 100% foreign companies are allowed, is a 100% Foreign JV also allowed? The goods to be supplied are obviously impossible for a local supplier to deliver and our local company does not want to take on the risk and get involved in the JV in case anything goes wrong.

The Annex of 9184 regarding foreign suppliers are fulfilled but it never mentions anything about 100% Foreign JVs.

Has anyone else ever seen this scenario?

View user profile

Lunkan


Reclusion Perpetua
Some info:

"Is this allowed?"
I suppoused NOT,
but you don't tell enough what it is. There are a few exceptions.
/"Export businesses" (which for instance some Call Centers are included in). (I suppouse that's NOT your case.)
/and some retail businesses, but then a high minimum investment is demanded.

Perhaps a solution idea?
LET the Filipino company own 60 % (or perhaps even whole) so it get 60 % of the NET results, but solve the difference by
higher import price from the foreign companies,
or PERHAPS (=I'm not sure) it can be solved by foreign companies give loan or own EQUIPMENT and LEASE that to the company/JV in the Philippines. (Leasings and loans are some bad though in tax point of view.)

But if it's bidding at a public project, then there are more restrictions, but I don't know what.

View user profile

dnnschua


Arresto Menor
It's a public bidding to supply goods. Not a construction project.
None of the equipment involved is in the country.

Our local company does not want to join the JV because of the relatively high level of risk involved.

View user profile

Lunkan


Reclusion Perpetua
dnnschua wrote:It's a public bidding to supply goods. Not a construction project.
None of the equipment involved is in the country.

Our local company does not want to join the JV because of the relatively high level of risk involved.
Oh. Then there is some extra demands.

What's the risk? Don't the goverrment pay if you winn the bidding? Smile

Perhaps you can solve it by the foreign companies own the products, and the Philppine company/JV have them on commision.
I mean IF they need to be there before the bidding.
Perhaps compleete by a paragraph redicing the risk for the Filipino.

View user profile

Sponsored content


View previous topic View next topic Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum