Legal and other fees

The host country rules on the treatment of legal and other professional fees should be understood. In general, reasonable remittance of special service fees is permitted though some countries are reluctant to allow the remittance or such fees as those for computer programs.

Some countries resist or delay approval of royalty agreements. Thus a Canadian Company can supply 100 per cent of the technology but can share only the income from the investment portion. Some countries have shown a reluctance to allow the remittance of director's fees.

The dividend policy of the government should be clearly understood. Some countries limit the amount of dividends that may be declared. In other cases, a declared dividend has to be converted into, or initiated as, a stock dividend that in fact locks the funds into local currency. Some countries take one or two years to register a conversion of dividends to stock. This delays subsequent remittance of dividends to Canada of the increased stock holdings. Remittance can be made only from the date of approval or registration.

Operations

You must determine the host country laws on industrial relations and minimum ages and should allow for low rates of productivity during the early stages of development.

During the planning stages, attention must be given to the cost of building the manufacturing or resource development facility in the host country, the government policy on the machinery, and on die entry of specialists both to install the machinery and to train the local staff in the operation of the machinery. Many countries have strict rules on these matters, not all of them realistic.

The partnership must ensure that local skills are available to maintain and repair machinery.

The foreign investor, in general, is bringing technology to the partnership and must be prepared to commit human resources to the design of the plant and equipment and long-term technical support to the venture.

Grammar practice

V. Find in the text sentences in the Active Voice, copy them into your exercise books, give simple grammar analysis of these sentences.

VI. Find in the text sentences with the Infinitives and define their forms and functions. See Grammar in Use section if necessary. Language practice

VII. Look through the text to find the English equivalents of the following Russian terms and give the sentences with them

совместное предприятие; зона расширенной продажи; пошлинный барьер; страна интереса; новый ассортимент; удовлетворять потребности; таможенные правила; участие в торгах; аккредитованное предприятие; долгосрочные цели сотрудничества; производственные возможности; краткосрочная экспертиза; налог с заработной платы; прогрессивный налог; осуществление денежного перевода; задержка платежа; утверждение решения; оборудование по разработке ресурсов.

VIII. Find in the text the sentences that correspond to the following statements

1. The establishing of international joint venture presupposes some principle stages to fulfill in getting success.

2. Very often many foreign companies search for the export market for enlarged sales.

3. In this activity they often meet some obstacles.

4. In the world practice there is the way to overcome these obstacles.

5. The main task in joint-venture establishment is a market investigation.

6. In the target market it is necessary to make a market investigation for a new assortment.

7. You should know exactly that your product meets the market requirements.

8. During this analysis you can find out that your product is not needed there.

9. Very important thing is to clear out whether you have an opportunity to become an official supplier.

10. The international joint venture presupposes its long-term goals.

11. As a rule, powers approve the foreign investment.

12. In general, the joint ventures make great contribution to the economies of foreign countries.

13. The joint venture becomes authorized if its plans suit the economic aims of the host country.

14. The most important factor in establishment of a joint venture is believed to choose a partner.

15. Additional features and total reciprocal confidence are decisive conditions in establishment of a joint venture.

16. Disputes and disagreements can be solved by the proper finding of the partner.

17. Mainly in joint ventures trust is placed on local management.

18. Any document concerning cooperation should be compiled on the basis of a consent and agreement between the partners.

19. It is necessary to have in mind that sometimes you are urged to invest more capital than originally expected.

20. Getting information should be directed on all types of taxes.

21. The foreign partner of a joint venture should take into consideration all industrial relations in the host country.

22. The import of equipment and the arrival of specialists may become the first steps of operations.