In the era of globalization, the possibility of companies faced with strong competition to survive and make progress in the market is the ability to react to frequent market changes. The companies see joint venture as a response to the market turbulence and the possibility to control changes or adapt to them.
Joint venture is one of the most common ways for market players to cooperate. Joint venture is a contractual cooperation between two or more market players aimed at realizing a specific joint venture by the contracting parties jointly investing in the venture, sharing risks, making decisions. After reaching a jointly set goal, the investors share profit and often losses as well. Joint venture usually lasts as long as a certain project. After that, the cooperation ends, although in some cases, the partners may continue to cooperate by founding a joint company.
When we talk about joint venture in the Republic of Serbia, we are talking about the ownership investments of domestic and foreign investors. The advantages are the following facts:
- Serbia has a good strategic position on the Southeast Europe map;
- acceptable taxes and tax incentives (tax incentives for startups);
- simple, fast and financially beneficial formation of a company from the legal aspect;
- Customs incentives;
- Commission for Protection of Competition;
- high-qualified personnel, etc.
Another positive aspect of joint ventures is the limited duration of these contracts because none of the parties has the obligation of permanent binding in business and legal aspects. This way, everyone has the possibility to exit the venture after the project is completed. However, if the expectations are fulfilled thanks to good joint project completion results, there are no legal obstacles for the participants to form a permanent partnership. A challenge is created either in the form of a joint venture or some of the legal forms of doing business in Serbia.