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What is an International Business, what is a MOU or JV in business? Please answer those question for an Interactions among us.

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تم إضافة السؤال من قبل Mohammed Ashraf , Director of International Business , Saqr Al-Khayala Group
تاريخ النشر: 2016/02/24
Md Fazlur Rahman
من قبل Md Fazlur Rahman , Procurement Specialist , Engineering and Planning Consultants Ltd

International Business means doing business crossing the geographical boundary. Here, business will include Production (a firm may have plants in different countries), Marketing and Sales (a firm may have authorized dealer and authorized whole seller in different countries), Finance (the firm may borrow money form international market to have a lower cost of capital) and finally Regional branding (to get more market share in a region)

 MOU (Memorandum of understanding): Memorandum is signed between two parties for mutual cooperation to support or arrive at a common objective/goal. The MOU specifies the area of operations, responsibilities of each party and a specified time frame for MOU.  This MOU is not a contractual agreement and not enforceable in court of law.

 JV (Joint venture): A joint venture is contractual agreement between two or more parties. It is similar to business partnership but is based on single business transaction. Companies choose to enter joint venture in order to share strengths, minimize risks and to increase profitability.

مستخدم محذوف‎
من قبل مستخدم محذوف‎

Thanks for the invitation

 

International Business

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The exchange of goods and services among individuals and businesses in multiple countries

 

or

 

 

A specific entity, such as a multinational corporation or international business company that engages in business among multiple countries

 

 

MOU - Memorandum of Understanding

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A document that expresses mutual accord on an issue between two or more parties

 

 

JV - JointVenture

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A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it. However, the venture is its own entity, separate and apart from the participants' other business interests

Vinod Jetley
من قبل Vinod Jetley , Assistant General Manager , State Bank of India

What is a Memorandum of Understanding?

A Memorandum of Understanding between companies is a document like a contract but not binding on the parties, except when confidentiality and non-competition agreements are included. It is essentially a collection of key points of an agreement between two parties that are negotiating a contract; in this respect a Memorandum of Understanding is simply the agreement signed prior to the final contract. Memorandums of Understanding are also known for its acronym MOU.

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Main purposes of a Memoradum of Understanding

Thus, among the purposes of Memorandum of Understanding we can include:

  • The statement that the parties are currently negotiating.
  • Clarifying the key points of an operation for the convenience of the parties.
  • Assess the interest of the other party to carry out the business.
  • Collect the advances that occur in each of the negotiations.
  • Provides guarantees if the deal collapses during negotiation.

The type of Memorandum more used in international negotiations are those related to Distribution and Joint Venture Contracts. You can find models of these Memorandums en the following links:

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Biding on parties

In certain complex transactions, the parties may wish to come to a preliminary agreement, sometimes called an “agreement to agree”, which may or not be enforceable, depending on the circumstances and applicable law. Such an agreement may take the form of “Memoradum of Understanding” -also called Letter of Intent or Commitment Letter-. The preliminary agreement may be necessary when a certain major issue (such as obtaining a government authorization) is not yet definitive.

Another function of the Memorandum of Understanding is that the parties will use the preliminary agreement to resolve certain basic issues, while continuing to negotiate on more complicated matters.

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Differences between Memorandum of Understanding and Letter of Intent

The Memorandum of Understanding is similar to the Letter of Intent, although has three main differences:

  • Use a more formal language similar to the preceding contract, i.e are a summary of the agreement signed before the final agreement.
  • May involve more than two parties, while Letters of Intent refers only to two parties.
  • Must be signed by all parties, while the Letter of Intent is signed only by the party that propose the agreement.

Ahmed Mohamed Ayesh Sarkhi
من قبل Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

full agree with all Expert answers

 

Khalid Ghaffar
من قبل Khalid Ghaffar , Consultant for Business Development , Waters Corporation USA

International business comprises all commercial transactions (private, governmental, sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their Geo-political boundaries. The term "international business" refers to all those business activities which involve cross-border transactions of goods, services, resources between two or more nations. Transactions of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc

A memorandum of understanding (MOU) is a formal agreement between two or more parties. Companies and organizations can use MOUs to establish official partnerships. MOUs are not legally binding but they carry a degree of seriousness and mutual respect, stronger than a gentlemen’s agreement. Often, MOUs are the first steps towards a legal contract. MOUs are popular in multinational international relations because, unlike treaties, they take a short time to ratify and can be kept confidential. MOUs may also be used to modify existing legal treaties.

 

A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares.

Sidrah Nadeem
من قبل Sidrah Nadeem , Global Marketing Manager , Hill & Knowlton

Mr.Fazlur Rahman has given accurate answers for all three queries, thank you for the opportunity to answer.

Viktor Matev
من قبل Viktor Matev , Main Sales Representative Business developer Central and Eastern Europe , Schneider Electric

JV is a Joint Venture company , mainly is established between two leading companies from different areas into common area

MoU Memorandum of understanding , generally recognized as a binding , even if no legal claim could be placed on the rights and obligations laid down in them.To be legally operated memorandum of understanding must identify the contracting parties  spell out the subject matter of the agreement and its objectives summarized the essential terms of agreement must be signed of the contracting parties  

samer maher
من قبل samer maher , Senior Operations Manager , El Badry

I can answer for JV

 

A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares.

 

Asad khan
من قبل Asad khan , Product specialist , shaigan pharmaceutical

International Business includes a broad range of microeconomic and macroeconomic topics to help you gain an understanding of the global economic and the process of joining with a committed partner is called JV.

Rami Abbas
من قبل Rami Abbas , Sales Manager , Al Houda Contracting and Real Estate Development

I fully agree with Mr.Fazlur answer.

Vikas Bachhuka
من قبل Vikas Bachhuka , Sales Manager - Tire, Lubs & Batteries , ALI ALGHANIM & SONS AUTOMOTIVE CO.

International business is nothing but doing business across boundaries. Many companies have expanded themself beyond the boundaries of their home country.

 

Eg: Traders from china doing business in Dubai is an example of international business

 

Here goods are produced in home country (i.e. china) and exported to exporting country (i.e Dubai).

 

In International business, there are two main currency used i.e. USD and EURO. Eventhough it is not manadatory to deal in this currency but since its is easy to trade in these currency are used to settle payments.

 

MOU - Memorandum of understanding is a bond of understanding between two parties. In MOU paperwork is involved and agreement is signed

 

Joint Venture is a contractual business undertaking between two or more parties. It is similar to a business partnership,with one key difference: a partnership generally involves an ongoing, long-term business relationship, whereas a joint venture is based on a single business transaction. Individuals or companies choose to enter joint ventures in order to share strengths, minimize risks, and increase competitive advantages in the marketplace. Joint ventures can be distinct business units (a new business entity may be created for the joint venture) or collaborations between businesses.

 

Eg; This Memorandum of Understanding (MoU) is made on this the 24th day of Feb, 2016 for JV-Joint Venture partner ; initially with out management a minor stake up to 49% & JWA- Joint working arrangement and after fruitful results and with mutual understanding to increase the stake to beyond 51% along with management.