The following is the abstract of an article "Legal Aspects of International Joint Ventures", which was contained in the Korea International Commerce & Law Review Vol.18, August 2002.

International joint ventures are usually formed and managed by domestic companies and foreign investors for the common objectives.
They offer an opportunity for each partner to benefit significantly from the comparative advantages of the other. Local partners bring knowledge of the domestic market; familiarity with government bureaucracies and regulations; understanding of local labor markets; and existing manufacturing facilities. Foreign partners can offer advanced process and product technologies, management know-how, and access to export markets.

In Korea, joint ventures have been encouraged to usher in foreign investors with foreign currency capital badly needed during the IMF financial crisis. In the meantime, Korean laws and regulations with respect to joint ventures have been largely overhauled to promote foreign direct investment (FDI) both inbound and outbound. They include four types of FDI, i.e., acquisition of foreign stocks, provision of long-term loans, participation in joint operations like resources development and establishment of foreign offices.

From the legal point of view, the formal joint venture agreement must be an offspring of a series of tough negotiations between domestic and foreign partners. They usually stress the long-term relation ship with the good will and dedication to each other, and restrict the free transfer of stocks.
Both partners are earnestly inter ested in the owner ship and management of the joint venture. So they keep a close eye on the articles of incorporation, changes of business environment, conflict resolution methods, transparency of accounting and other financial matters. When a multinational corporation (MNC) is involved in the joint venture, conflicts over management strategies, marketing and other is sues take place more often than not between the MNC and local partners.

We have to pay attention to joint ventures, particularly, in China and North Korea.
As witnessed in other transition economies, China is eagerly bringing in foreign direct investments for the development of nation's economy. China encourages foreign investors to establish ordinary joint ventures, contractual joint ventures, solely invested foreign capital companies and jointly operated development companies with local partners.
In North Korea, however, joint ventures have a different meaning like contractual joint ventures in China, in which North Korean partners have an initiative in the management. Rather, jointly operated companies or simply processing-for-wage companies are recommended in view of the unpredictable legal infrastructure in North Korea.