17. Совместные предприятия (joint ventures)

Read and analyze the following texts:

Text A

Russian enterprises have the right to set up joint ventures on the territory of Russian Federation with foreign firms.

The entity of a joint venture is envisaged by the Fe­deral Law of 9 June 1999 No. 160 (The Federal Law on Foreign Investments in Russian Federation) (with amend­ments of 21 March, 25 July 2002 and 8 December 2003). Instead of the term 'joint venture' the Law applies the term 'commercial organization with foreign investments'.

This status is that of any Russian commercial organi­zation from the moment when a foreign investor be­comes one of its participants. These organizations have the rights and privileges stipulated by the Federal Law No. 160 and are founded according to the common pro­cedure of creating a legal person in Russian Federation. A joint venture can be created between any number of foreign and Russian enterprises. A joint venture has limited liability. It should be self-supporting and self-financing.

Joint ventures offer foreign investors direct access to the Russian market. It may be set up in any branch of Russian economy: agriculture, industry, trade, con­struction, service sector, etc. A foreign participant may repatriate his share of profit abroad. The main features of interest to the Russian participant are:

• to satisfy the requirements for the domestic market;

• to attract foreign technology and foreign manage­ment experience;

• to improve the export base of Russian Federation and re­duce irrational imports by means of import substitution.

If the parties want to form a partnership, a Protocol (Letter) of Intent normally signed.

The foundation documents are the most important documents for the application procedure.

Text B

The foundation documents include the Agreement between the partners on the establishment of a joint ven­ture and the Charter or Statute of a joint venture. These documents outline the legal status of a joint venture, the funds raised, management and personnel and some other provisions.

A joint venture must be managed by a Board of Direc­tors represented by Russian and foreign participants. The Board is a governing body, which sets out the strategy of a company.

The authorised fund is formed from initial contribu­tions made by the Parties and may be supplemented from the profits of joint venture. Contributions to this fund may be made in cash and in kind.

A joint venture is obliged to establish a reserve fund of per cent of the value of the authorised fund. It is formed by of annual deductions from the profits of a joint venture.

The research and development fund is created to de­velop production. It is viewed as reinvestment and is tax deductible.

All the other funds created by a joint venture are taxed.

Text C

After deductions have been made to the funds, the rest of the profit is divided between the partners in pro portion to their share of the authorized fund."

The profit due to the foreign partner may be placed and spent within the country or repatriated abroad. Profits may be transferred from Russian Federation to foreign countries in cash or by way of import substitution, joint venture is subject to a tax on its profits. The tax holiday used to begin from the moment profits are first made by joint venture. However, according to recent tax regulations, a joint venture is not exempt from the profit taxation.

A joint venture is a legal person. It is protected by the legislation of Russian Federation from any requisition or confiscation by the administrative authorities. 11 may sue and be sued and may also appeal to Russian and third party courts. A joint venture may be liquidated if its activities are inconsistent with the objects defined by the foundation documents. In case of dissolution the foreign participant has a right to recover the initial contribution he made to the authorized fund.

Study the following phrases paying attention to their translation:

...all the preceding negotiations and correspondence pertaining to it become null and void. ...both texts having equal force. ...if they are made in written form and duly signed by both parties. ... are to be paid by the Buyers and those outside the above-mentioned territory by the Sellers.

=> ...все предыдущие переговоры и переписка по нему теряют силу. => ...причем оба текста имеют одина­ковую силу. => ...если они совершены в письмен­ной форме и подписаны обеими сторонами. => ...относятся на счет покупателя и за пределами указанной террито­рии — на счет продавца.

Vocabulary List

fund tax holiday liability limits letter of intent fund for social development special-purpose fund fund for material incentive tax on profit

=> фонд, резерв => налоговая льгота => границы ответственности => письмо о намерениях => фонд социального развития => фонд специального назначения => фонд материального поощрения => налог на прибыль

Practice

Ex. 1. Find English equivalents for these words and word combinations in texts A and B:

1. совместное предприятие

2. ограниченная ответственность

3. репатриация прибыли

4. внутренний рынок

5. юридический статус

6. налоговые выплаты

7. прибыль

8. законодательство

Ex. 2. Find English equivalents for these phrases in texts A and B:

1. В случае неполучения импортной лицензии в течение 2 (двух) месяцев...

2. Все расходы и сборы, включая таможенные сборы и пошлины, а также сборы по заключению и исполнению настоящего контракта...

3. ...ни одна из сторон не вправе передавать свои права и обязанности...

4. Все соглашения, переговоры и переписка между сторонами теряют силу с даты подписания контракта.

5. ...стороны договорятся о возврате Продавцу забракованного оборудования.

6. ...все расходы по хранению и транспортировке оборудования оплачивает Продавец.

7. С момента подписания настоящего контракта все предыдущие переговоры и переписка по нему...

8. ...причем оба текста имеют одинаковую силу.

Ex. 3. Answer the following questions:

1. What positions are provided for in the last clause of the contract?

2. On what conditions can alterations and addenda to the contract be valid?

Ex. 4. Translate into English:

1. Получение импортной лицензии является обязанностью Покупателя. В случае неполучения импортной лицензии в течение ... месяцев со дня подписания контракта Продавец имеет право аннулировать настоящий контракт без каких-либо обязательств с его стороны. О получении импортной лицензии Покупатель обязан немедленно известить Продавца.

2. Ни одна из сторон не имеет права передавать третьему лицу права и обязательства по настоящему контракту без письменного согласия другой стороны.

3. Все изменения и дополнения к настоящему контракту действительны лишь в том случае, если они сделаны в письменной форме и подписаны обеими сторонами.

4. После подписания настоящего контракта все предыдущие переговоры и переписка по нему теряют силу.

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