Main advantages of joint venture comprise:
- The overseas company finds it less burdensome financially to expand internationally as the local partner also contributes to the equity capital of such a venture.
- Large projects requiring huge capital outlays and manpower are executable as a result of joint ventures.
- The overseas business company benefits from a local partner's knowledge of the host countries regarding the competitive conditions, language, culture, business systems and political systems.
- In many instances entering into a foreign market is very expensive and involves risk. To prevent this, sharing the expenses and/or risks with a local partner under joint venture agreements would be beneficial.