Conditions that should be achieved will undoubtedly be discussed one at a time to provide ambitious agents a definite view of what are expected from their store.

Perform a self-evaluation test. Have you been a person?

Can you endure bargaining with different people?

Are you in a position to dedicate every one of the time that is necessary?

Are you sure you have social skills and good communication?

All of these are very important questions that you may need certainly to think about.Be sure that you're positively sure before you say yes to your self. It's suggested, but not needed for one to take quick personality development and communication programs. This can help reveal those hidden skills you might have and bring out the best in you. The next most critical thing to consider can be your age.

In a few states and countries, you're qualified if you are eighteen years old and above. Some states will require you to be at least twenty one yrs old. Make an effort to find a good property school inside your area. Ensure that the school that you are about to choose is accepted by their state. Is it really necessary to join a genuine estate school? Definitely it is. There are a few terms and laws that you need to be aware of. Real estate is more difficult than you can have ever imagined. There are a large amount of items that you must grasp and be knowledgeable of before you can actually sell homes. The things listed above are simply the basic requirements for you to be qualified for the job. But, it doesn't necessarily mean that you can become an agent that quickly.

You also need to acquire a license before you may become a full-pledged agent. History checks, state examinations, a completed course, (graduate from the short real estate courses) and submission of a form are the basics on how you can acquire a license. The key part could be the back ground study check. Since you're about to handle considerable amounts of money and confidential information, the RELC or the Real Estate Licensing Commission should make sure that you're someone without poor records. Say as an example you already passed the tests and acquired a license. Congratulations, but what now?

You can not call yourself as a real estate agent, yet. On the field perhaps not until enough experience has been gained by you. You've to discover a company prepared to hire new agents. Go through the yellow pages or online listings. There might be plenty of organizations who're willing to hire someone that contain the skills that you have. Having done each one of these things, make certain that you practice anything that you've discovered and have the motivation to attain and meet your sales objectives.

Ernst and Young note that many clients preparing to file tax returns for the financial year-ended 31 December 2012 are still not familiar with, or aware of, the tax law requirements relating to the Form of Declaration of Particulars (FDBP) and the new ARI forms introduced by the Executive Regulations.

Form of Declaration of Particulars (FDBP) and the requirement to notify changes 

The FDBP provides the tax department with basic statutory information regarding a taxpayer, as recorded in the commercial register of the Ministry of Commerce and Industry. The information includes the taxpayer’s name and address, name of the principal officer, registered activities and financial year-end. The filing of an FDBP form signifies the taxpayer’s acceptance of taxability in Oman. In the case of foreign companies, the FDBP confirms or notifies establishment of a permanent establishment in Oman.

The Executive Regulations stipulate specific FDBPs forms for each category of taxpayers including an Omani company, an establishment, permanent establishment or foreign person providing services in Oman.

Changes to the information included in the FDBP are to be notified, with a declaration modification form submitted to the tax department within two months from the date of change.

E&Y wish to highlight that penalties are applicable in case of non-compliance.

New ARI forms introduced under the Executive Regulations

The tax department has introduced new ARI forms specific to Omani and locally incorporated companies, permanent establishments, and foreign persons providing services in Oman. The new ARI forms require considerably more information than the previous ARI forms.

The new ARI forms require the following:

• Details of the statutory information declared in the FDBP.
• Determination of taxable income and tax due, together with a reconciliation of profit or loss as per financial statements with the taxable income or loss for the year, including appendices for adjustments made in the ARI.
• Audited accounts, appendices and other information required, including details relating to bank accounts, related party transactions, rental payments, payments made to major transacting suppliers or subcontractors and withholding tax remittances in case of payments made to foreign entities, as specified under Article 52 of the Income Tax Law. The audited accounts must bear the original stamp of the taxpayer and the auditor.
• Declaration of the principal officer certifying that the contents of the tax return are true and correct. It is important to note that the principal officer must personally sign the ARI and affix the company stamp.

Finally, taxpayers should note that ARI tax declarations submitted without the required inclusions and attachments may not be accepted by the tax department at the time of filing.

The OECD created an initial list of tax havens in 2000. A similar list was used in S. 396, introduced in the 110th Congress, which would treat firms incorporated in certain tax havens as domestic companies; the only difference between this list and the OECD list was the exclusion of the U.S. Virgin Islands from the list in S. 396. Legislation introduced in the 111th Congress to address tax haven abuse (S. 506, H.R. 1265) uses a different list taken from IRS court filings, but has many countries in common. The definition by the OECD excluded low-tax jurisdictions, some of which are OECD members that were thought by many to be tax havens, such as Ireland and Switzerland. These countries were included in an important study of tax havens by Hines andRice.8 GAO also provided a list.9

Below is a list of tax haven's - tax havens are a state, country or territory where certain taxes are levied at a low rates or not at all while offering due process, good governance and a low corruption rates - these Tax Haven Countries offer a variety of ablities to purchase citizenship that often revolve around real estate.

Andorra – No personal income tax

Anguilla – A British Overseas Territory and offshore banking centre

Antigua and Barbuda

Aruba

The Bahamas levies neither personal income nor capital gains tax, nor are there inheritance taxes

Bahrain

Barbados – A 'Low-tax regime' not 'Tax haven' – The government of Barbados sent off a high level note to members of the United States Congress recently in protest of the label "Tax Haven" stating it has the potential to undermine or override the Barbados/United States double taxation agreement. Since appearing on the 2009 OECD/G-20 white-list, the Barbados government began an international ad-campaign to market the country as the only Caribbean country to be included on the white-list

Belize – No capital gains tax

Bermuda does not levy income tax on foreign earnings, and allows foreign companies to incorporate there under an "exempt" status. Companies are "exempt" from the local 60/40 ownership laws, and are not offered any special tax status. Exempt companies are also limited from doing local trade and may not hold real estate in Bermuda, nor may they be involved in banking, insurance, assurance, reinsurance, fund management or similar business, such as investment advice, without a license. The island also maintains a stable, clean reputation in the business world. At present, there are no benefits for individuals. In fact, for a non-Bermudian to own a house on the island, they would have to pay a foreign ownership tax of 25% of the purchase value, and minimum of $15,000 a year in land tax alone. They also can only purchase homes of a specific type and high value (over $4 million), so the tax is generally greater than $1 million.

British Virgin Islands - the 2000 KPMG report to the United Kingdom government indicated that the British Virgin Islands was the domicile for approximately 41% of the world's offshore companies, making it by some distance the largest offshore jurisdiction in the world by volume of incorporations. The British Virgin Islands has, so far, avoided the scandals which have tainted less well regulated offshore jurisdictions.

Campione d'Italia an Italian enclave within Switzerland

Cayman Islands

Channel Islands (Guernsey and Jersey) - no tax is paid by corporations or individuals on foreign income and gains. Non-residents are not taxed on local income. Local taxation is at a fixed rate of 20% in Jersey, Guernsey, & Alderney and 0% in Sark.

Cook Islands

Costa Rica

Cyprus - this jurisdiction has grown recently in popularity and anticipates further future growth. As a jurisdiction Cyprus is in a position to exploit its unusual position as an offshore jurisdiction which is within the EU. 10% corporate tax (0% for shipping companies), 20 - 30% income tax, 20% CGT

USA - Delaware, a state in the USA which charges no income tax on corporations not operating within the state

Dominica

Gibraltar is no longer considered a non-cooperative tax haven since 30 June 2006. No new Exempt Company certificates are being issued from that date. All previous Exempt Company certificates will be ineffective from 2010.

Grenada

Hong Kong - tax rates are low (16.5%) enough that it can be considered a tax haven. Hong Kong does not levy tax on capital gain as well. However, it contains a highly vibrant service economy and its low taxes were not designed to make Hong Kong a tax haven. Hong Kong itself has usually rejected the label. The former financial secretary, Nicholas Haddon-Cave has asserted: "In Hong Kong we rely on our low tax structure and free movements across exchanges to encourage investment, and not on the usual gimmicks of tax holidays and quick write-offs found in tax havens."

Ireland

The Isle of Man does not charge corporation tax, capital gains tax, inheritance tax or wealth tax. Personal income tax is levied at 10–20% on the worldwide income of Isle of Man residents, up to a maximum tax liability of £115,000 (as of April 2010). Banking income tax is levied on the profits of Isle of Man based banks at 10% and income from the rent of Isle of Man property is levied at the same rate.

Jordan

Labuan - a Malaysian island off Borneo

Lebanon

Liberia - a flat annual tax for non-resident corporations of $450. No annual tax on income.

Liechtenstein is the country with the lowest taxes within Europe (except Andorra which has no personal income tax). 

Luxembourg

Macau - Corporate tax rates between 9-12%. Personal Income tax rates between 5-12%. No capital gains tax. No tax for companies operating "off shore". The overwhelming majority of the Macanese gov't taxes are derived from a hefty casino tax of 39%. All Macanese Residents (Temporary and Permanent) are entitled to an annual cash handout from the gov't of MOP3600 or MOP6000 (Approx. $450 USD/ $750USD).

Maldives

Malta

Marshall Islands

Mauritius – based front companies of foreign investors are used to avoid paying taxes in India utilising loopholes in the bilateral agreement on double taxation between the two countries, with the tacit support of the Indian government, who are keen to improve figures relating to inward investment. The use of Mauritius as a gateway to funnel foreign investments into India has always been controversial. Mauritius's financial regime has a number of the key characteristics of a tax haven, which has helped to facilitate this.

Monaco does not levy a personal income tax.

Montserrat

Nauru – No taxes. Only tax in country is an airport departure tax.

Netherlands Antilles – In October 2008 the State Secretary of Finance announced that the Netherlands Antilles along with the Isle of Man would begin to seek ways to combat the 'Tax Haven ' label that has been placed on their territory by some governments. The leaders hinted they would welcome a more level playing field in terms of the international financial services industry

Nevis (Niue)

New Zealand does not tax foreign income derived by NZ trusts settled by foreigners of which foreign residents are the beneficiaries. Nor does it tax the foreign income of new residents for four years. No capital gains tax.

Norfolk Island – no personal income tax.

Panama 'Offshore' entities are not prohibited from carrying on business activities in Panama, other than banks with International or Representation Licenses (see Offshore Business Sectors) but will be taxed on income arising from domestic trading, and will need to segregate such trading in their accounts.

Samoa

San Marino

Seychelles

Singapore

Tonga

St. Kitts and Nevis

St. Lucia

St Vincent and the Grenadines

Switzerland is a tax haven for foreigners who become resident after negotiating the amount of their income subject to taxation with most of the cantons of Switzerland in which they intend to live. Typically taxable income is assumed to be five times the accommodation rental paid. French-speaking Vaud is the most popular canton for this scheme, thus it is usually called "forfait fiscal". For businesses, the canton of Zug is popular, with over 6000 holding companies.

Turks and Caicos Islands The attraction of the Exempt Company lies in a combination of its tax exempt status and minimal disclosure and administrative requirements. In order to obtain tax exempt status the subscribers must at the time of incorporation lodge at the Companies Registry a signed declaration stating that the business of the company will be mainly carried on outside the Turks and Caicos Islands. The subscribers are not required to inform the Registrar of the identity of the beneficial owners. An exempt company must nominate a representative resident in the Islands for the purpose of service of legal process. There are more than 15,000 International Business Companies registered in the Turks and Caicos Islands.

United Kingdom - No Capital Gains Tax for non-residents or foreign corporations or overseas Trusts, no worldwide taxation for non domiciles resident in the UK. The latter has however been eroded slightly by introduction of the Remittance Basis Charge (RBC), requiring non-domiciles resident in the UK for at least 7 of the last 9 tax years whom have offshore income greater than £2,000 per annum to pay a charge of £30,000 to cotinue having the benefit of the remittance basis.

United States Virgin Islands (Includes St Croix (famous for golf), St Thomas, and St John. These are in the Caribbean) A 90% exemption of local corporate income tax payments, A 90% exemption of income taxes paid by resident stockholders on dividends received from the enterprise. (The provision for dividends so upset the U.S. tax legislators that they repealed the old inhabitant rule. Had Congress allowed the loophole to continue, the USVI could have evolved into one of the best tax haven in the world). A 1% customs duty rate for raw materials and component parts (the standard rate is 6% ad valorem). 100% excise tax exemption for building materials, machinery or extension of the physical plant. 100% exemption from property tax and gross receipt tax.

Vanuatu - Vanuatu's Financial Services commissioner announced in May 2008 that his country would reform its laws so as to cease being a tax haven. "We've been associated with this stigma for a long time and we now aim to get away from being a tax haven."

Some tax havens including some of the ones listed above do charge income tax as well as other taxes such as capital gains, inheritance tax, and so forth. Criteria distinguishing a taxpayer from a non-taxpayer can include citizenship and residency and source of income.

You can start your journey from the capital. But I entered Georgian territory from the neighboring Armenia and so decided to start my adventures from the Fortress Rabat and ancient cave-town complex Vardzia.

Near the town of Akhaltsikhe is Rabat Fortress dating the 9th century.

Rabat is city in the city. Complex include fortress, towers, churches, Mosques, as well as touristic-info center, restaurant, cafe, shops, souvenir and apparel store, civil registry office (wedding house) and etc.

Cave town and monastery in Vardzia is placed in the south in 18 km distance from the Turkish border at the bank of river Mtkvari. There are 13 levels of different grottos in Vardzia, but only 8 ones are still saved. Other levels were destroyed by earthquake in XIII-th century.

During the numerous enemies attacks nearly 20 000 people could hide out at and because of three secret passages Georgian army could unexpectedly strike enemies camp.

There is a temple of Assumption of Godmother In the center of the cave.

The foundation of the Cave town Uplistsikhe was started in the end of II mill. BC. Along with the pagan altars are Christian churches with beautiful architecture, monks’ cells. The city suffered most of all during the Mongol invasions. Churches were half destroyed, fortress walls demolished almost to the end. So the town once housed 20 000 citizens turned into the usual fortress.

David Gareji Monastery cave complex of VI century placed on Georgian-Azerbaijanian border. Approximately 20 churches are curved into the rocks Many frescoes of Tamar Mepe and saints are still preserved in the churches.

The most sacred thing among David Gareli’s treasures is the stone, which David brought from the pilgrimage to Jerusalem.

After so many extraordinary trips in different places and ancient sites of Georgia it’s time to move to comfort and luxury and visit Tbilisi and Batumi.

Tbilisi will provide to you great number of hotels, variety of night clubs, bohemian places, galleries and museums. In the evening time everybody tries to get some fresh air around the turtle lake which offers you boat or catamaran on the water or cafes and other entertainment.

Tbilisi Cathedral Church of Holy Trinity impresses with its scale and location. Illuminated with different lighting Cathedral at night time is seen from each point of city’s center.

Old city is worth your attention. Sulfur bath, charges, mosques and synagogue, narrow streets and myriad of restaurants offering delicious Georgian wine, gorgeous view and many other attraction, which you could find in Tbilisi.

Batumi is subtropics Garden of Eden! Unique botanical garden, a dolphinarium, famous boulevard! So many world known opera and pop stars acted on Batumi stages!

After my story is simply impossible to postpone a trip to Georgia! But in order to see much places is required quickly move around the country.

I will share with you my secret of rapid transportation in Georgia! I rent a car from company Naniko which offers the different types of vehicles for mountain region off-roads, luxury cars, minivans etc.

As well you could choice a car with the driver or just use GPS navigator and you are free to travel!

           Available to joint ventures in the Philippines today are what are commonly referred to as the BOT/BT schemes.  Republic Act No. 6975 -- as amended by Republic Act No. 7718 (the BOT Law) with its Implementing Rules and Regulations (the Rules) -- governs BOT/BT and other like schemes covering private sector infrastructure or development projects with authorized agencies and local units of the government.

 A.      Types of Projects

                   Projects eligible for prosecution under the BOT Law include the construction, rehabilitation, improvement, expansion, modernization, operation, financing and maintenance of the following:

 1.       Highways, including expressway, roads bridges, interchanges, tunnels and related facilities

 2.       Railways or rail-based projects packaged with commercial development opportunities

 3.       Non-rail based mass transit facilities, navigable inland waterways and related facilities

 4.       Port infrastructure like piers, wharves, quays, storage, handling, ferry services and related facilities

 5.       Airports, air navigation and related facilities

 6.       Power generation, transmission, distribution and related facilities

 7.       Telecommunications, backbone network, terrestrial and satellite facilities and other related facilities

 8.       Information technology and data-based infrastructure

 9.       Irrigation and related facilities

 10.     Water supply, sewerage, drainage and related facilities

 11.     Education and health infrastructure

 12.     Land reclamation, dredging and other related development facilities

 13.     Industrial and tourism estates or townships, including related infrastructure facilities and utilities

 14.     Government buildings, housing projects

 15.     Markets, slaughterhouses and related facilities

 16.     Warehouse and postharvest facilities

 17.     Public fish ports and fishponds, including storage and processing facilities

 18.     Environmental and solid waste management and related facilities such as collection equipment, composting plants, incinerators, landfill and tidal barriers, among others

 B.      Authorized Agencies and Local Government Units

           The following are authorized to enter into contractual arrangements under the BOT Law:

 1.       Government agencies, including government-owned or controlled corporations, authorized by law or their respective charters to undertake infrastructure development projects or both

 2.       Local government units authorized by law or their charters to undertake infrastructure and/or development projects within their respective jurisdiction.

 C.      Pre-Qualification Requirements

           Any individual, partnership, corporation or firm, whether local of foreign, including joint ventures or consortia of local, foreign, or local and foreign firms -- subject to the limits set forth in the BOT Law and Rules -- may participate in or apply for pre-qualification for projects under said law and rules.

           1.       Legal Requirements

 a.       where a public utility franchise is required, the proponent must be Filipinos or if a corporation, duly registered with the SEC and owned up to at least 60 percent by Filipinos.

 b.       where the proponent is a joint venture or consortium, not organized as a corporation, the participants thereto must submit a sworn statement that they bind themselves jointly and severally for the obligations of the joint venture/consortium arising from the project.

 c.       the contractor (which will undertake the construction work) to be engaged by the proponent, if Filipino and required to be identified, must be duly licensed and accredited by the Philippine Contractors Accreditation Board (PCAB); or if foreign, must secure the PCAB license required of foreign contractors.

 2.       Other Requirements

           The proponent, as well as its key personnel, must likewise posses the necessary experience or track record in similar or related projects.  It must also be able to show that it has adequate capability to sustain the financing requirements of the project according to the criteria for evaluation of the government agency or local government unit concerned.

 D.      Types of Schemes

 1.       Build-and-Transfer (BT) - The project proponent undertakes the financing and the construction of a given infrastructure or development facility, and after its completion turns it over to the government agency or local government unit concerned, which shall pay the proponent on an agreed schedule its total investment expended on the project, plus a reasonable rate of return thereon.  This arrangement may be employed in the construction of any infrastructure or development projects, including critical facilities which, for security or strategic reasons, must be operated directly by the Government.

 2.       Build-Lease-and-Transfer (BLT) - A project proponent is authorized to finance and construct an infrastructure or development facility, and upon its completion turns it over to the government agency or local government unit concerned on a lease arrangement for a fixed period, after which ownership of the facility is automatically transferred to the government agency or local government unit concerned.

 3.       Build-Operate-and Transfer (BOT) - The project undertakes the construction, including financing, of a given infrastructure facility and the operation and maintenance thereof.  The project proponent operates the facility over a fixed term during which it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid or as negotiated and incorporated in the contract to enable the project proponent to recover its investment and operating and maintenance expenses in the project.  The project proponent transfers the facility to the government agency or local government unit concerned at the end of the fixed term which shall not exceed fifty years.  This will include a supply-and-operate situation, whereby the supplier of equipment and machinery for a given infrastructure facility -- if the interest of the Government so requires -- operates the facility, in the process providing Filipinos technology transfer and training.

 4.       Build-Own-and Operate (BOO) - A project proponent is authorized to finance, construct, own, operate and maintain an infrastructure or development facility, in which the proponent is allowed to recover its total investment, operating and maintenance costs plus a reasonable return by collecting tolls, fees, rentals, or others charges from facility users.  Under this project, the proponent which owns the assets of the facility may assign its operation and maintenance to a facility operator.

 5.       Build-Transfer-and Operate (BTO) - The government agency or local government unit concerned contracts out the building of an infrastructure facility to a private entity such that the contractor builds the facility on a turn-key basis, assuming cost overruns, delays, and specified performance risks.  Once the facility is commissioned satisfactorily, the title is transferred to the implementing agency.  The private entity, however operates the facility on behalf of the implementing agency under the agreement.

 6.       Contract-Add-and Operate (CAO) - The project proponent adds to an existing infrastructure facility, which it is renting from the government, and operates the expanded project over an agreed franchise period.  There may or may not be a transfer arrangement as regards the added facility provided by the project proponent.

 7.       Contract-Operate-and Transfer (DOT) - Favorable conditions external to a new infrastructure project to be built by the project proponent are integrated into the arrangement by giving the same the right to develop adjoining property and, thus, enjoy some of the benefits the investment creates such as higher property or rent values.

 8.       Rehabilitate-Operate-and Transfer (ROT) - An existing facility is turned over to the private sector to refurbish, operate and maintain for a franchise period, at the expiry of which the facility is turned over to the government.  The term is also used to describe the purchase of an existing facility from abroad, importing, refurbishing, erecting and consuming it within the host country.

9.       Rehabilitate-Own-and Operate (ROO) - An existing facility is turned over to the private sector to refurbish and operate, with no time limitation imposed on ownership.  As long as the operator is not in violation of its franchise, it can continue to operate the facility in perpetuity.

10.     Other variations of the foregoing as may be approved or authorized by the President.

           The foregoing discussions on the nationalistic provisions of our Constitutions and laws may look unduly restrictive and uninviting to the uninitiated, especially foreign investors.  Indeed, Filipinos -- reacting to several centuries of colonization by the Spaniards and the Americans -- have framed their laws to prevent further one-sided foreign exploitation of their resources.

           But this does not mean they are averse to foreign investments and joint ventures.  Quite the contrary, the Philippines has come out strongly in inviting foreigners to invest here -- either alone or preferable in joint ventures with locals.  President Fidel V. Ramos, during the last three years, has travelled to at least twenty countries in search of foreign investors.  As ultimate proof of its adherence to trade liberalization -- but with adequate safeguards for its infant industries -- the Philippines has joined the ASEAN Free Trade Area (AFTA) and most recently has agreed, after widespread publi debate, to become a founding member of the World Trade Organization.

           Truly, there are several areas of opportunity, and the discriminating foreign investor will find many businesses worth getting into alone or preferably in joint venture with local business entrepreneurs.  Joint ventures are the best way of navigating Philippine rivers of business opportunities.

           As stated earlier, joint ventures are of recent origin in commercial law.  In view, however, of the globalization of trade and commerce, they now take center stage.  Hence, there would be need to clarify, and even codify where this is possible, the laws and regulations governing them.  I have made a summary of what is locally known about this new vehicle of legal transaction.  In a sense, one can say that corporations and partnerships are very traditional models and could be compared to legally married spouses whose rights and responsibilities are clearly provided for by law.  On the other hand, trading arrangements which are done case-to-case may by compared to occasional lovers or “one-night stands.”  In the middle ground are joint ventures -- comparable to common-law spouses living together in harmony during good times but adjusting more easily during bad times; staying together as long as they wish but not governed too mush by convention and tradition, their relationship depending largely on their ad hoc consent.

           Be that as it may, there is still need to know more about this relationship, and I hope that the foregoing paper gives enough guidelines and caveats needed by the parties before they enter into common-law joint venture relationships.

*           This paper was presented before the Seminar on International Business Law and Practices on March 20, 1995, at the Hotel Nikko-Manila Garden Hotel.  It was published in its English and French versions in the Institute of International Business Law and Practice Newsletter, 14 (1st Semester, 1995), pp. 67-81; the Journal of the Integrated Bar of the Philippines, XXII and XXIII (3rd and 4th quarters 1994 and 1st and 2nd quarters 1995), pp. 1-39; The Lawyers Review, IX (May 31, 1995), pp. 8-18; and the LCMP Bulletin (June 1995), pp. 10-25.

          For income tax purposes, joint ventures are regarded and taxed as corporations.  (Section 20(b) in relation to Section 24(a) of the National Internal Revenue Code)

          The Supreme Court, while distinguishing between the concept of co-ownership and of a joint venture to determine the applicable tax, had occasion to pass upon this issue in Evangelista v. Collector of Internal Revenue (102 Phil. 140 [1957]).  It explained:

          To begin with, the tax in question is one imposed upon ‘corporations’ which, strictly speaking are distinct and different from ‘partnerships’.  When our Internal Revenue Code includes ‘partnerships’ among the entities subject to the tax on ‘corporations’, said Code must allude, therefore, to organizations which are not necessarily ‘partnerships’ in the technical sense of the term. Thus, for instance, Section 24 of said Code exempts from the aforementioned tax ‘duly registered general partnerships’, which constitute precisely one of the most typical forms of partnerships in this jurisdiction.  Likewise, as defined in Section 84(b) of said Code, ‘the term corporation includes partnerships, no matter how created or organized.’  This qualifying expression clearly indicates that a joint venture need not be undertaken in any of the standard forms, or in conformity with the usual requirements of the law on partnerships, in order that one could be deemed constituted for purposes of the tax on corporations.  Again, pursuant to said section 85 (b), the term ‘corporation’ includes, among others, ‘joint accounts, (cuentas en participacion)’ and ‘associations’, none of which has a legal personality of its own independent of that of its members.

          For purposes of the tax on corporations, our National Internal Revenue Code includes these partnerships -- with the exception only of duly registered general copartnerships -- within the purview of the term “corporation”.  It is therefore, clear to our mind that petitioners herein constitute a partnership, insofar as said Code is concerned, and are subject to the income tax on corporations.

          This ruling was reiterated in numerous other cases (Reyes v. Commissioner of Internal Revenue, 24 SCRA 198 [1968; Ona v. Commissioner of Internal Revenue, 45 SCRA 74 [1972]).

          Excluded from the rule of taxability of joint ventures as corporations are the following:

A.      a joint venture formed for the purposes of undertaking construction projects.  (Pres. Decree No. 929, May 04, 1976) a joint venture formed for the purposes of engaging in petroleum, coal, geothermal and other operations pursuant to an operating or consortium agreement under a service contract with the government.  (Pres. Decree No. 1862)

Regulatory Requirements

          There are some regulatory requirements that may have to be complied with in setting up a joint venture in the Philippines.  Ajoint venture may need any number of the following registration and permit requirements:

 A.      Registration with the Securities and Exchange Commission (SEC) (for joint venture corporations);

B.      Registration with the Board of Investments (BOI) for availment of incentives under the Omnibus Investments Code of 1987, if so qualified;

C.      Registration with the Export processing Zone Authority (EPZA) for qualified export firms locating in any of the export zones in the Philippines to avail of special incentives;

D.      Registration with the Bangko Sentral ng Pilipinas (BSP) of foreign investments for purposes of capital repatriation and profit and dividend remittances

          (Note: Under Rule V of the Implementing Rules and Regulations of R.A. 7042 (the Foreign Investments Act of 1991), foreign investments made pursuant to the Act are deemed registered with the BSP for purposes of profits and dividends remittance and capital repatriation upon registration with the SEC);

E.      Securing Tax identification Number (TIN) from the Bureau of Internal Revenue (BIR);

F.       Securing locational clearance/business permit for firms locating in Metro Manila from the Metro Manila Authority; (MMA);

G.      Securing building permit and license to do business from the local government offices where the business will be set up;

H.      Securing employer’s number from the social Security System (SSS number);

I.       Securing expatriates’ visas from the Bureau of Immigration and Deportation (BID);

J.        Registration of operation of customs Bonded Manufacturing Warehouse (CBMW) from the Bureau of Customs;

K.      Obtaining certification from the Environmental Management Bureau of the Deportation of Environmental and natural Resources (DENR);

L.       Obtaining clearance from the Housing & Land Use Regulatory Board (HLURB), National Housing Authority (NHA), Department of Agrarian Reform (Dar) for projects involving land use and/or conversion;

M      Securing permit from the DENR to construct or operate pollution control devices;

N.      Registration patents and trademarks with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT);

O.      Registration of copyright from the Copyright Office of the National Library;

P.       Registration of power generous projects from the National Power Corporation (NAPOCOR);

Q.      Obtaining clearance from the Bureau of Food and Drug (BFAD) for projects involving food, drugs, chemicals and cosmetics;

R.      Registration of tourism projects with the Department of Tourism (DOT);

S.       Obtaining provisional clearance and certificate of public convenience and necessity from the National Telecommunications Commission for telecommunication projects;

U.      Obtaining license or clearance from the Department of National Defense (DND) for defense-related projects;

 V.      Registration with the Department of Science and Technology (DOST) for projects involving advanced technology;

 W.     Obtaining clearance for health-related projects from the Department of Health (DOH);

 X.      Obtaining clearance from the Office of Energy Affairs for oil exploration activities;

 Y.      Obtaining mining rights from the Bureau of Mines and Geo-Sciences (BMG);

 X.      Others.

Registration with the BOI

 A.      With Incentives

           1.       Qualifications:

           A Philippine national.  If other than natural persons (joint venture, partnership, or other associations),  it must be organized under Philippine laws and at least 60% of its capital must be owned and controlled by citizens of the Philippines.  If a corporation, it must likewise be organized under Philippine laws and at least 60 percent of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines, and 60 percent of the Board of Directors are citizens of the Philippines.  If a portion of the equity of the corporations is owned by another corporation which is partly foreign-owned, at least 60 percent both corporations capital stock outstanding and entitled to vote must be owned and held by citizens of the Philippines, and 60 percent of the Board of Directors of both of said corporations must be citizens of the Philippines.  Otherwise, it must establish the following:

 a.       It proposes to engage in a pioneer project as defined in the Omnibus Investments Cod, where the Board determines that the measured capacity thereof cannot be filled by Philippine nationals, or that it is exporting at least 70 percent of its total production.

b.       It shall attain the status of a Philippine national within thirty years or a longer period approved by the Board; unless the enterprise is exporting 100 percent of its total production.

 c.       The pioneer area it will engage in is not reserved for Philippine citizens by the Constitution or other laws.

 d.       The applicant shall engage in a preferred project listed in the Investment Priorities Plan or it will export at least 50 percent of its total production or it will engage in export trading abroad in export products bought from export produces or it will engage in rendering technical, professional or other services or in exporting pictures or musical recording produced in the Philippines.

  2.       The applicant is capable of operating on a sound and efficient basis and of contributing to the national development.

 3.       If the applicant engages in activities other than preferred projects, it shall install a separate system of accounting for the preferred activity and the non-preferred activity.

Incentives for registered enterprises.

 a.       Income tax holiday

 b.       Tax and duty exemption on imported capital equipment

 c.       Tax credit on domestic capital equipment

 d.       Exemption from contractors tax

 e.       Simplification of customs procedures

 f.        Unrestricted use of consigned equipment

 g.       Employment of foreign nationals

 h.       Exemption of breeding stocks and genetic materials

 i.        Tax credit on breeding stocks and genetic materials

 j.        Tax crefir for taxes and duties on raw materials

 k.       Access to bonded manufacturing/trading system

 l.        Exemption from taxes and duties i\on imported spare     parts

 m.      Exemption from wharfage dues and any export tax,         duty, impost and fee

 B.      Without Incentives

 1.       Qualifications

 Any non-Philippine national may do business or invest in a domestic enterprise up to 100% of its capital provided:

 a.       it is investing in a domestic market enterprise in areas outside the Foreign Investment negative List (FINL); or

 b.       it is investing in an export enterprise whose products and services do not fall within lists A and B (except for defense related activities which may be approved pursuant to the foreign Investments Act (FIA); and

 c.       the country or state of the applicant must allow Filipino citizens and corporations to do business therein.

  2.       Rights and guarantees:

 a.       Repatriation of investments;

 b.       Remittance of earnings;

 c.       Remittance to service foreign loans and contracts;

 d.       Freedom from expropriation except for public use and in the interest of national welfare;

 e.       Freedom from requiresition of investment except in the event of war or national emergency and only for the duration thereof.

           The application shall be filed with the SEC together with the required supporting g documents.  In order to avail themselves of the benefits of capital repatriation, profits and dividend, remittance enterprises registered with the SEC shall be deemed registered with the Bangko Sentral ng Pilipinas.

          Earlier, a comparison between a partnership and a joint venture was discussed, and it was stated that although they are similar in character, they are not identical.  However, the rights and liabilities of parties in a joint venture are substantially those of partners in a partnership relation.

          In matters governed by agreement, especially in the case of contractual joint ventures, the specific provisions of said agreement define the relations, rights and obligations of the parties.  Even in the case of equity joint ventures, the relation of the parties may be governed by an agreement that they may have entered into independently of the articles and bylaws of the corporation, e.g., stockholders’ agreements.  When the agreement is silent on any particular issue, the following general principles of partnership may be resorted to. 

A.      Parties Inter Se

          Parties to a joint venture, like partners, are bound by fiduciary duty to each other; i.e. good faith, loyalty, trust and fair dealing.  This includes the duty to render information and accounting on all matters affecting the joint venture and to account for the benefits resulting from the joint venture relations or from the use of property or information belonging to the same.  Thus, profits derived from self-dealing or those wrongfully diverted from the joint venture are governed by the principles of constructive trust.   Another similarity with a partnership relation is an adherence to a principle akin to that of delectus personae.  Generally, a party may not assign its interest in a joint venture relation without the consent of the other parties, as this will constitute a violation of fiduciary duty.

          By definition, there is a mutual obligation of the parties in a joint venture to contribute either money, property, efforts, skill, knowledge and experience in order to prosecute their common interest.  In case any party fails or refuses to fulfill this obligation, the other party may continue the undertaking and seek damages against the defaulting party for breach of obligation.  Alternatively, the aggrieved party may sue for specific performance or compel contribution by the defaulting party.

          To further their common interest in this undertaking, the parties have the joint right and duty to control the management of, and promote, the joint venture.  In the absence of an agreement to the contrary, there is a presumption of equal control.  However, parties may, by agreement,, delegate the duties of management to only one or some of them, or their representatives.  In the case of a joint venture corporation, control over its management is determined by the number of seats held in its board of directors and by the allocation of the key executive positions among the participating parties.  There are also schemes that may be used in protecting the interest of a party in a joint venture, especially, if it is a minority interest.  These may include increased quorum and/or voting requirements for certain corporate acts, veto rights, restrictions on transfer of shares, including the right of first refusal, and the like. 

          The parties also have the inherent right to share in the profits of the joint venture.  Generally, unless otherwise agreed upon by the parties, there is likewise a presumption of proportionate equality in the sharing of profits.  Inexorably linked to this right is the duty to share in the risks and losses of the joint venture.  As in partnerships, risks and losses are to be distributed in the same manner as the profits unless there is a different agreement between the parties covering this matter.  In reality, however, these aspects of the relation are seldom left to legal presumptions.  In fact, they constitute the principal for negotiation of prospective joint ventures.

          In the case of joint venture corporations, income is distributed in the form of dividends according to one’s shareholdings therein.  Losses are shouldered to the extent of their capital contributions.  Again, this does not preclude any settlement that should take place between the parties pursuant to an independent shareholders’ between them.

2.       As Against Third Persons

          The rules governing the rights and liabilities of parties to a joint venture as against third persons are similar or analogous to those applicable to partnerships.

          Each party stands as both principal and agent of the other parties in respect of those matters falling within the scope of the joint venture.  The act of one of one binds the others.  Even the unauthorized act of a party may bind the others in respect of a third party, if the latter has no knowledge of such lack of authority, provided that the act in question is within the scope of the joint venture business.  (Art. 1818, Civil Code) A joint venture corporation, however, is expected to conduct its business in a corporate corporation through its regularly elected board of directors and officers.  The action of a stockholder/co-venturer cannot bind the corporation, unless the latter has clothed the former with apparent authority to act on its behalf.

          With their own property or assets contractual co-venturers are liable pro rata for the obligations of the joint venture.  Although the parties may stipulate a different proportion among themselves, their obligation to third parties is still joint and several, but subject to settlement between the parties in accordance with their agreement.  As discussed earlier, the liability of the shareholders/co-venturers in a joint venture corporation -- whether they are individuals, partnerships or corporations -- for the obligations os said joint venture corporation does not extend beyond their respective capital contributions.  An exception arises in cases which warrant piercing the veil of corporate fiction, those which avail themselves of the corporate vehicle was only (1) to defeat public convenience, (2) to justify a wrong, (3) to protect fraud, and (4) to defend crime.

           Due to limitations of time and space, only the bare provisions of Philippine laws -- both constitutional and statutory -- are listed here.

           A.      Constitutional Provisions

1.       Article 12, National Economy and Patrimony

a.       Section I

          “Section 1. x x x

          x x x  However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

b.       Section

          “Section 2.  All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State.  With the exception of agricultural lands, all other natural resources shall not be alienated.  The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens.  Such agreements may be for a period not exceeding twenty-five years, and under such terms and conditions as may be provided by law.  In cases of water rights for irrigation, water supply, fisheries or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.

The State shall protect the nations marine wealth in its archipelago waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment  exclusively to Filipino citizens.

 The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish workers in rivers, lakes, and bays and lagoons.

 The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale explorations, development, utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country.  In such agreements, the State shall promote the development and use of local scientific and technical resources.

 The President shall notify Congress of every contract entered into in accordance with this provisions, within thirty days from its execution.”

 c.       Section 3

           “Section 3.  Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks.  Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted.  Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period of not exceeding twenty-five years, and not to exceed one thousand hectares in area.  Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.

           Taking into account the requirements of conversion, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor.”

 d.       Section 7

           “Section 7.  Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the public domain.”

 (Note: Republic Act No. 7652, otherwise known as the Investors’ Lease Act, now in effect, allows any foreign investor investing in the Philippines to lease private lands for a period not exceeding fifty (50) years, renewable once for a period of not more than twenty-five (25) years; provided, that the leased area shall be used solely for the purpose of the investment; and the leased premises shall compromise such area as may reasonably be required for the purpose of the investment subject to the Comprehensive Agrarian Reform Law and the Local Government Code.  In the case of tourism projects, lease of private lands by foreign investors qualified under the Act shall be limited to projects with an investment of not less than Five (5) Million US Dollars, seventy percent (70%) of which shall be infused in the project within three (3) years from the signing of the lease contract.)

 e.       Section 10

           “Section 10.  The Congress shall, upon the recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments.  The Congress shall enact measures that will encourage the information and operation of enterprises whose capital is wholly owned by Filipinos.

 In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.

           The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.

 f.        Section 11.

           “Section 11.  No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years.  Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by Congress when the common good so requires.  The State shall encourage equity participation in utilities by the general public.  The participation of foreign investors in the governing body of any public utility enterprises shall be limited to their proportionate share in its capital, and shall be limited to their proportionate share in its capital, and all the executive and managing officers of the such corporation or association must be citizens of the Philippines.”

 g.       Section 12

           “Section 12.  The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.”

 h.       Section 19

           Section 19.  The State shall regulate or prohibit monopolies when the public interest so requires.  No combinations in restraint of trade or unfair competition shall be allowed.”

 i.        Section 21

           “Section 21.  Foreign loans may only be incurred in accordance with law and the regulation of the monetary authority.  Information on foreign loans obtained or guaranteed by the Government shall be made available to the public.”

 2.       Article 14. Education, Science and Technology, Culture and Sports

 a.       Section 4

                   Section 4. (1) x x x

 (2)     Educational Institutions, other than those established by religious groups or mission boards, shall be owned solely by citizens of the Philippines or corporations or associations at least sixty per centum of the capital of which is owned by such citizens.  The Congress may, however, require increased Filipino equity participation in all educational institutions.

 The control and administration of educational institutions shall be vested in citizens of the Philippines.  No educational institution shall be established exclusively for aliens and no group of aliens shall comprise more than one-third of the enrollment in any school.  The provisions of this subsection shall not apply to schools established for foreign diplomatic personnel and their dependents and, unless otherwise provided by law, for other foreign temporary residents.”

 3.       Article 16.  General Provisions

 a.       Section 11

           “Section 11. (1) The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly owned and managed by such citizens.

           The Congress shall regulate and prohibit monopolies in commercial mass media when the public interest so requires.  No combinations in restraint of trade or unfair competition shall be allowed.

 (2)  The advertising industry is impressed with public interest, and shall be regulate by laws for the protection of consumers and promotion of the general welfare.

           Only Filipino citizens or corporations or associations at least seventy per centum of the capital of which owned by such citizens shall be allowed to engage in the advertising industry.

           The participation of foreign investors in the governing body of entities in such industry shall be limited to their proportionate share in the capital thereof, and all the executive and managing officers of such entities must be citizens of the Philippines.”

B.      Statutory Provisions

1.       Republic Act No. 7042, otherwise known as the Foreign Investments Act of 1991

a.       Section 2

          Section 2.  Declaration of Policy - It is the policy of the State to attract, promote and welcome productive investments from foreign individuals, partnerships, corporations and governments, including their political subdivisions, in activities which significantly contribute to national industrialization and socio-economic development to the extent that foreign investment is allowed in such activity by the Constitution and relevant laws.  Foreign investments shall be encouraged in  enterprises that significantly expand livelihood and employment opportunities for Filipinos; enhance economic value of farm products; promote the welfare of Filipino consumers; expand the scope, quality and volume of exports and their access to foreign markets; and/or transfer relevant technologies in agriculture, industry and support services.  Foreign investments shall be a welcome supplement to Filipino capital and technology in those enterprises serving mainly the domestic market.

          As a general rule, there are no restrictions on extent of foreign ownership of export enterprises.  In domestic market enterprises, foreigners can invest as much as one hundred percent (100%) equity except in areas included in the negative list.  Foreign owned firms catering mainly to the domestic market shall be encouraged to  undertake measures that will gradually increase Filipino participation in t heir businesses by taking in Filipino partners, electing Filipinos to the board of directors, implementing transfer of technology to Filipinos, generating more employment for the economy and enhancing skills of Filipino workers.

b.       Section 5

          “Section 5.  Registration of Investments of Non-Philippines Nationals. - x x x   Provided, finally, That a non-Philippine national intending to engage in the same line of business as an existing joint venture, in which he or his majority shareholder is a substantial partner, must disclose the fact and the names and addresses of the partners in the existing joint venture in his application for registration with the SEC. x x x  “

c.       Section 6

          “Section 6. Foreign investments in Export Enterprises. - Foreign investment in export enterprises whose products and services do not fall within Lists  A and B of the Foreign Investments Negative List provided under Section 8 hereof  is allowed up to one hundred (100%) ownership.

          Export enterprises which are non-Philippine nationals shall register with the BOI and submit the reports that may be required to ensure continuing compliance of the export enterprise with its export requirement.  BOI shall advise SEC or BTRCP, as the case may be, of any export enterprise that fails to meet the export ratio requirement.  The SEC or BTRCP shall thereupon order the non-complying export enterprise to reduce its sales to the domestic market to not more than forty percent (40%) of its total production; failure to comply with such SEC or BTRCP order, without justifiable reason, shall subject the enterprise to cancellation of SEC or BTRCP registration, and/or the penalties provided in Section 14 hereof.”

d.       Section 7

          “Section 7.  Foreign Investments in Domestic Market Enterprises. - Non-Philippine nationals may own up to one hundred percent (100%) of domestic market enterprises unless foreign ownership therein is prohibited or limited by existing law or the Foreign Investment Negative List under section 8 hereof.

x x x.”

c.       Section 11

          “Section 11.  Compliance with Environmental Standards.  -  All industrial enterprises regardless of nationality of ownership shall comply with existing rules and regulations to protect and conserve the environment and meet applicable environmental standards.”

          Generally, there are no formalities required before individuals and/or entities can and establish a joint relationship among them.  The existence of a joint venture may be established either by direct evidence of an agreement, express or implied, between the parties or a showing of facts and circumstances which prove that such a relationship was indeed into.

          The main idea is: between parties, a contract (as the term is defined in the Civil Code of the Philippines) , express or implied, is essential to create a joint venture relationship.  There is no specific or formal agreement required.  What is required is an intent to form a joint venture.  Thus, whether or not an agreement between the parties constitutes one of joint venture depends largely upon the terms of the particular agreement, upon the construction which the parties have given it,  as indicated by the manner in which they acted under it, upon the nature of the undertaking, and upon the facts.  The rule is different as far as third persons are concerned.  As against these persons, parties may be estopped from denying the existence of a joint venture although there was no intention to constitute one between them, if the undertakings intended indeed constitutes a joint venture.  (See Am Jur, supra, pp. 29-32.)

          This is not say that no formalities shall ever be involved in a joint venture transaction.  First, once the vehicle that will implement the object of the joint venture has been chosen, say, a new joint venture corporations as in the case of equity joint ventures, compliance with the formal requirements of the appropriate regulatory agencies, such as the Securities and Exchange Commission (SEC), will certainly be required.  Then, to avail oneself of certain incentives available to those enterprises registered with the Board of Investments (“BOI”   one has to comply with said agency’s registration requirements.  There are also various permits, licenses and the like that have to be secured from other regulatory agencies, such as the Bureau of Internal Revenue, the local government concerned, etc.  A brief discussion on these requirements is contained in another portion hereof.

In view of the heightened complexity of commercial transactions today, most joint ventures are now embodied in some form of document.  More often than not, these are legal documents.  Initially, parties would execute a memorandum of understanding or a memorandum of agreement or a “heads of agreement.”  This summarizes the basic agreement between the parties -- the objectives, terms and conditions of the joint venture.  This is usually followed by one or more contracts that will define in detail the intricacies of the project; the respective, rights and liabilities of the parties; and dispute settlement mechanisms including arbitration procedures.  It may also contain special protective clauses that the parties may wish to incorporate, as well as other common provisions found in most documents.  The extensive enumeration of the different types of joint ventures in an earlier portion hereof reflects the variety of legal documents that may be executed by the parties to memorialize their particular agreement.

           In a paper prepared by the International Trade Center of UNCTAD/GATT, joint ventures were classified and described as follows:

           A.      Equity Joint Ventures

 1.       Formation of a New Company.  Creation of a new company possessing a separate and distinct legal personality where each partner owns a certain portion of the equity.

2.       Equity participation in Existing Company.  Equity in existing company is shared with and transferred to the other party in the joint venture.

           B.      Contractual Joint Ventures

          There is no equity participation between the partners and their relations, rights and liabilities, as among themselves and in respect of third parties, are principally governed by contract or agreement.  Contractual joint ventures may be further classified into the following:

           1.       Technology-oriented

a.       Licensing agreement - A contract between a licensor and a licensee in which the former grants the latter legal access to technology and know-how for the manufacture and marketing of a product in return for lumpsum fees, royalties, etc.

 b.       Manufacturing contracts - A contract whereby one party manufactures components or finished products for and in accordance with the specifications of the other party which in turn sells the product under its name and through its distribution network.

 c.       International subcontracting - Involves a foreign principal/contractor (such as a multinational firm, trading company, importer or wholesaler) which places an order with a subcontractor in a developing country for the manufacture of components or the assembly of finished products utilizing the inputs that it provides.  The final product is sold by the principal either in his home market or in third-country markets.

 d.       Production sharing and risk service contracts. Extensively used in the petroleum sector, a production sharing contract involves oil exploration in a specific area by one company with the condition that if oil is found, production will be undertaken (normally, in conjunction with the host country’s state-owned company)  for a given period of time in return for a predetermined share of the output.

e.       Risk service contract - Similar to production-sharing, but the main difference is that the exploring company’s share of output is paid in cash.

f.        Turnkey contracts - Contracts involving setting up a plant and putting it into operation.

 g.       Management contracts -  Contracts whereby a party, for a specified fee, performs various functional responsibilities related to the operation of an enterprise or a project and assures that its managerial technical skills and other services are made available during the contract period.

 h.       Technical assistance and know-how agreements-- Agreements where one party provides technical assistance and know-how to another party for the manufacture of certain products, which may not be destined for exports, in return for payment of a fixed fee or royalty.

 i.        Franchising - A particular type of licensing or technical assistance agreement wherein a franchises provides a franchisee with a complete package consisting of trademarks, know-how, local exclusivity and management support in return for down payment fees, royalties, etc.

 j.        Leasing - In a financial lease, the lessee acquires the use of a leased property for the majority of its usable life and has the option to purchase it at the expiration of the lease period.  An operating lease, on the other hand, has shorter lease period and the lessor is responsible for repairs and maintenance, technical service, etc.

 2.       Marketing-Oriented

          Joint ventures which focus on the marketing aspects of business relationships.

 k.       Buy-back arrangements - Buy-back arrangements can be classified under either technology or marketing-oriented joint ventures.  Commonly found in the sale of capital plant and equipment, in a buy-back arrangement a supplier agrees to purchase or consider as payment, partly or fully, the resultant output of the plant or the equipment supplied.

 l.        Long-term purchase contracts - An undertaking by one party to supply the other party with raw materials (such as minerals) on a relatively long-term basis, ranging from 3 to 10 years, specifying the quantities involved.

 m.      Sales commission agreement - An agreement between two or more parties in which one party provides the other with marketing assistance and services in return for a fee or a commission on sales generated.

 n.       Consortia - They are created when two or more companies pool their resources to achieve a certain objective without the need for creating a new company.  The participating enterprises each make a contribution or assume a specific responsibility in the implementation of the project.

 o.       Counter purchase - A form of countertrade in which the exporter undertakes to purchase goods or services from the importer for a given percentage of the value of the sales contract.

 p.       Procurement or marketing co-operation - Joint procurement involves the pooling of the buying requirements of two or more enterprises in order to obtain more information, better prices, improved conditions or payment, etc.  Inversely, joint marketing arrangements enable particularly the small and medium enterprises in developing countries to pursue common marketing strategies, share promotional costs, coordinate transport arrangements, etc., as well as meet relatively large export orders which cannot be handled by one enterprise.

 q.       Marketing tie-ups - A company enters into a long term arrangement to manufacture a certain product based on the design and specifications provided by another company (such as a large wholesaler/distributor or a manufacturer with his own distribution channel) and to sell the product to the latter on an exclusive basis.

 r.        b- Involve the manufacture of a certain product, on a continuous basis, by one company for and on behalf of another company which in turn sells the product to a third part.

 s.       Product exchange - A horizontal arrangement in which one company provides parts and components to another company in exchange for other parts and components which latter manufacturers.

           It will be observed that the foregoing characteristics closely resemble, if not exactly duplicate, those of a partnership relation.  However, the definitions quoted above betray the fact that a joint venture is not a partnership, but a status short of a partnership, at least not a formal partnership in the legal or technical sense; although, as will be discussed later, the general principles of partnership may be applicable in certain circumstances in determining the rights and liabilities of parties as between them and as against third parties.  Nevertheless, a “pronouncement that the rights and liabilities of joint venturers inter se and as to third persons are general governed by the laws of partnership is not tantamount to saying that a joint venture is a legal entity in the same sense that a partnership is”  (W.B. Johnston Grain Co. v. Self (Okla 344 P2d 653 cited in 46 Am Jur 2d 25).

           Under Philippine laws, a partnership has a juridical personality separate and distinct from that of each of the partners.  (Art. 1768, Civil Code)  It is even required to operate under a firm name precisely to manifest this juridical personality.  (Art. 1815, Civil Code)  Nevertheless, with their separate property, partners -- except limited partners -- are personally liable pro rata for the debts of the partnership.  (Art. 1813, Civil Code)

           Significantly, joint ventures differ from partnerships in the following ways:

 A.      A joint venture does not have a legal personality distinct and separate from the parties composing it, while a partnership does.

 B.      A joint venture usually has for its object an undertaking of a single or ad hoc nature, although it may entail a series of transactions and may last for a considerable period of time; a partnership usually has for its object a general business of a particular kind, although there may be a partnership for a single transaction.

 C.      Corporations may enter into joint ventures; corporations are not eligible for membership in a partnership.  (See 46 Am Jur 2d 26.)

           (Note:  In a Securities and Exchange Commission (SEC) Opinion [April 29, 1985], it was ruled that two or more corporations may enter into a joint venture through a contract or agreement (contractual joint venture) if the nature of the venture is authorized by their charters, which contract need not be registered with the SEC; provided, however that the joint venture will not result in the formation of a new partnership or corporation.)

           In Auerback vs.  Sanitary Wares Manufacturing Corporation (180 SCRA 130 [1989], the Supreme  court found occasion to comment on joint ventures:

           The legal concept of a joint venture is of common law origin.  It has no precise legal definition, but it has been generally understood to mean an organization formed for some temporary purpose.  (Gates v. Megargel, 266 Fed. 811 [1920]  It is in fact hardly distinguishable from the partnership, since elements are similar -- community of interest in the business, sharing of profits and losses, and a mutual right of control.  (Blackner v. McDermott, 176 F. 2d. 498, [1949]; Carboneau v. Peterson, 95 P. 2d., 1043 [1939]; Buckley v. Chadwick, 45 Cal. 2d. 183, 288 P. 2d. 12 289 P.2d. 242 [1955]).  The main distinction cited by most opinions in common law jurisdictions is that the partnership contemplates a general business with some degree of continuity, while the joint venture is formed for the execution of a single transaction, and is thus of a temporary nature.  (Tuffs v. Mann 116 Cal. App. 170, 2 P. 2d. 500 [1931];  Harmon v. Martin, 395 III. 595, 71 NE. 2d. 74 [1947]; Gates v. Megargel, 266 Fed. 811 [1920]).  This observation is not entirely accurate in this  jurisdiction, since under the Civil Code, a partnership may be particular or universal, and a particular partnership may have for its object a specific undertaking.  (Art. 1783,  Civil Code).  It would seem therefore that under Philippine law, a joint venture is a form of partnership and should thus be governed by the laws of partnership.  The Supreme Court has however recognized a distinction between these two business forms, and has held that although a corporation enter into a partnership contract, it may however engage in a joint venture with others.  (At p.12, Tuazon v. Bolanos, 95 Phil. 906 [1954] (Campos and Lopez - Campos Comments, Notes and Selected Cases, Corporation Code 1981

           Of recent common-law origin, the term “joint ventures” has been defined in various ways and given various synonyms in the following legal references.

 A.      International Trade Center Thesaurus of International Trade Terms:

           The joining of forces between two or more enterprises, of the same or different countries, for the purpose of carrying out a specific operation (industrial, commercial, investment, production or trade).  This includes consortia, export consortia, export marketing groups, joint export marketing groups.

 Corpus Juris Secundum (48 C.J.S., p. 801):

           A joint adventure is a legal relation of recent origin and is generally described as an association of persons to carry out a single business enterprise for profit.  Joint enterprise, joint venture, and syndicate are terms similar to joint adventure and are sometimes used interchangeable with it.

           A special combination of two or more persons, where in some specific venture a profit is jointly sought without any actual partnership or corporate designation, or as an association of persons to carry out a single business enterprise for profit, for which purpose, they combine their property, money, effects, skill, and knowledge.

 American Jurisprudence (46 Am Jur 2d, p.21):

           A joint venture is an association of persons with intent, by way of contract, express or implied, to engage in and carry out a single business venture for joint profit, for which purpose they combine their efforts, property, money, skill, and knowledge, without creating a partnership or a corporation pursuant to an agreement that there shall be a community of interest among them as to the purpose of the undertaking, and that each joint venturer shall stand in the relation of principal, as well as agent, as to each of the other coventurers, with an equal right of control of the  means employed to carry out the common purpose of the venture.

 Black’s Law Dictionary (5th ed. [1979], p. 753):

           A legal entity in the nature of a partnership engaged in the joint prosecution of a particular transaction for mutual profit.  Tex-Co Grain Co. v. Happy Wheat Growers, Inc., Tex.Civ.App., 542  S.W.2d 934, 936.  An association of persons jointly undertaking some commercial enterprise.  It requires a community of interest in the performance of the subject matter, a right to direct and govern the policy in connection therewith, and a duty which may be altered by agreement, to share both in profit and losses.  Russell v. Klein, 33Ill.App.3d 1005, 339 N.E.2d 510, 512.

           A one-time grouping of two or more persons in a business undertaking.  Unlike a partnership, a joint venture does not entail a continuing relationship among parties.  A joint venture is treated like a partnership for federal income tax purposes.

Philippine Law Dictionary (Moreno, 3rd ed., [1988], p.503):

           In a joint venture which is similar to a partnership, two or more persons bind themselves to contribute money, property, or industry, with the intention of dividing profits among themselves.  -- People v. Caballero, 24059-CR, August 26, 1981.

           To constitute a joint venture there must be an agreement to enter into undertaking in objects of which parties have community of interest and common purpose in performance and control over agencies used therein, though one may entrust performance to others.  -- Reyes v. New Riviera Hotel Development Corporation, CV - 69210, February 15, 1985.

            The Philippine Supreme Court, in Kilosbayan, Inc. et. al. v. Guingona et. al., 232 SCRA 110 (May 5, 1994), has accepted Black’s definition when it said:

           A careful analysis and evaluation of the provisions of the contract and a consideration of the contemporaneous acts of the PCSO and PGMC indubitably disclose that the contract is not in reality a contract of lease under which the PGMC is merely an independent contractor for a piece of work, but one where the statutorily proscribed collaboration or association, in the least, or joint venture, at the most, exists  between the contracting parties.  Collaboration is defined as the acts of working together in a joint project.  Association means the act of a number of persons in uniting together for some special purpose or business.  Joint venture is defined as an association of persons or companies jointly undertaking some commercial enterprise; generally all contribute assets and share risks.  It requires a community of interest in the performance of the subject matter, a right to direct and govern the policy connected therewith, and duty, which may be altered by agreement to share both in  profit and losses (citing Black’s Law Dictionary].  (supra, p. 143-144).

 II.     General Characteristics

           From the foregoing definitions, particularly Black’s which our own Supreme Court has accepted, a joint venture may be recognized to exist when the following general characteristics become evident:

           An association of persons or companies is established to undertake jointly some commercial enterprise or to achieve a common purpose or objective.

          These persons or companies contribute money, property, industry, knowledge, skill or some other identifiable asset.

          These parties have (1) a community of interest in the performance of the subject matter; (2) a right to direct and govern management; and (3) an agreement, express or implied, to share in the profits, risks and losses.