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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.

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