There are only a few of the differences between a company and a partnership here: a frequent use of JVs is to bump into a local company to enter a foreign market. A company wishing to expand its distribution network to new countries can reasonably enter into a JV agreement for the supply of products to a local company, thus taking advantage of an existing distribution network. Some countries also have restrictions for foreigners entering their market, so a joint venture with a local entity is almost the only way to do business in the country. Sony Ericsson is another famous example of a joint venture between two large companies. In this case, they united in the early 2000s with the aim of being a world leader in mobile. There are key features of a joint venture agreement and points that you need to consider and/or include to ensure that your agreement leads to success and prosperity. Head of Terms, properly designed at the beginning of the process, will prove invaluable at this point. Heads of Terms are generally not legally binding, but set out a roadmap that the parties can use to further develop a formal agreement. Among the issues that should be addressed in a good Head of Terms document are: the JV agreement defines how profits or losses are taxed. However, if the agreement is only a contractual relationship between the two parties, their agreement determines the distribution of the tax between them. Now you have planned your joint venture and are ready to make a deal with a second party.