4) venture EnterpriseThis form of capital contribution shared with foreign partners to build factories in the country in which the two sides jointly owned and operated. Developing countries often lack of capital, technology and management capacity, should all have policies to attract foreign investment.A company can produce in the country of the partnership to take advantage of low labour, avoid high import tariffs, reduce transport costs when bringing products to market, access to premises, or source material from which to step into a different market. For example, the only way to avoid high tariff on a foreign company when, in the countries of the European Community, is able to invest in a country in the EC, and then pass that went forward on a EC other. Generally when a firm invests in production outside the country, they often use the products of the factories in which export back to the country, as many Japanese and American companies usually do for years.Joint ventures help for corporate advantage when penetrating foreign markets.However, the venture also has drawbacks. That is the disagreement between the two sides about the business strategy, about the Division of profit.
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