A joint venture is a business contract in which the parties consent to build up, for a fixed time, a new unit and new resources by adding equity. Equity partnerships provide much desirable capital for capable businesses, bringing in finances and a sophisticated shareholder’s eye’s to expand and start on new products and take companies to the next higher standards. An equity partner is a partner in an enterprise who is a partly owner of the company.
For many companies, outsourcing to a third party provider may not be the best solution. There can be a number of reasons for this:
- When your organization is maintaining highly intellectual data or significant technical processes, then obviously powerful operational methodology should followed within quality parameters. In this case it’s very risky to outsource to third party entity. Within certain operational or communication gap, clients may get frustrated by your services. Hence, they may not permit you to handle the projects for long term. And, you will lose the trust from clients.
- Your business may necessitate your offshore constituent to be in your possession. This can particularly be the case for companies that are running towards an Initial Public Offerings or a Mergers & Acquisitions event and are looking to capitalize on their company’s worth. Of course, there is more book fee in owning an offshore operation as opposed to only having a services contract with provider.
Advantages Of Joint Ventures Engagement Model
You will possess the majority of commercial entity that is set up in India, allowing you to add this offshore business as an advantage and assuring that you have the power and possession. This is required to assure your clients and be obedient with their demands.
By partnering up with an organization like Ace Infoway, you can reduce your risk and leverage the local presence and expertise we have built up over the many years in India. Reducing risks will force your business objectives of the organization.
Running your own wholly owned subsidiary will require great investments and it will not be cost-effective at least for the first few years. Within the joint venture, Ace Infoway can leverage its scale and assets to run at a much lower cost level.
Time to Market
Setting up your own wholly owned subsidiary will require a lot of due diligence and it takes a company an average of 6-9 months to establish a captive. By leveraging ACE’s local presence and expertise, you can reduce this by 60% or more.
Set up Process
The deal structures of a joint venture are by far the most complicated when compared to our other service delivery models.
Exchange of Products:
In this joint venture engagement model, a firm can recommend their existing product to sell through the partner’s business channel and share the income. Both partners can exchange products. By means of exchanging products and services of the partner, they can branch out the products.
Widening Economic Scale Quick:
Building brand is a brainstorming task. At, Ace Infoway joint venture, you are able to broaden your trade and industry possibility without spending a large amount wealth and waiting for a lengthy time.
The setup process will consist of the following main steps:
The first step is to cautiously evaluate your necessities and clearly identify with what you want to do in the India and how strategically you want to go ahead in vertical market trends.
According to a study, Ace Infoway can choose which service delivery model is suitable for your supplies. If your group needs to have possession of and organize the function right from the get-go then a joint venture may be the only way to initiate. In other cases, it may be better to go for other engagement models like Technology Partnership, BestShoring Services or Staff Leasing and work towards a joint venture after a winning proof of concept.
Mutual Due Diligence
Setting up a joint venture is quite a big commitment. Both Ace Infoway and our client have to be absolutely convinced that the other party is the right partner for this venture. This will require substantial due diligence from both sides.
Once the resolution has been prepared to move ahead with the joint venture, a substantial amount of legal work will have to be done to constitute straightforwardly the ownership of the joint venture and the responsibilities of each partner.
With the legal framework in place, the actual incorporation work can start which will require registration at all relevant government agencies.
After merging, the working setup process can fundamentally follow the setup method of our Virtual Captive services which efficiently puts all the capacity, infrastructure, possessions, and services in place to facilitate the everyday operations of the joint venture.