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Joint Venture Agreement
I need a joint venture agreement for a partnership between two companies in the construction industry, outlining the roles and responsibilities of each party, profit-sharing arrangements, and a dispute resolution mechanism. The agreement should also include provisions for confidentiality and a duration of 5 years with an option for renewal.
What is a Joint Venture Agreement?
A Joint Venture Agreement sets out the terms when two or more companies team up to run a shared business project in Qatar. It spells out how partners will split profits, share risks, and manage the venture together - all while following Qatar's Commercial Companies Law No. 11 of 2015.
This binding contract covers essential details like each partner's capital contributions, management roles, and decision-making powers. For Qatari joint ventures, at least 51% local ownership is typically required, though some sectors under the Qatar Financial Centre allow full foreign ownership. The agreement also outlines how partners will handle disputes and eventually wind down the venture.
When should you use a Joint Venture Agreement?
Use a Joint Venture Agreement when partnering with other companies in Qatar to tackle large-scale projects that exceed your solo capabilities. This is especially crucial for international firms entering the Qatari market, where local partnership requirements often apply in sectors like construction, oil and gas, or professional services.
The agreement becomes essential before combining resources, sharing technology, or launching joint operations. It protects all parties by clearly defining ownership stakes, profit distribution, and operational control. For projects under Qatar's Public-Private Partnership Law, having this agreement in place helps secure government approvals and ensures compliance with local partnership requirements.
What are the different types of Joint Venture Agreement?
- Joint Venture Letter Of Intent: Initial framework outlining key terms before a full agreement, commonly used in Qatar for preliminary negotiations
- Joint Venture And Shareholders Agreement: Comprehensive document combining venture terms with shareholder rights, ideal for incorporated joint ventures
- 50 50 Joint Venture Agreement: Equal partnership structure, typically used in Qatar Financial Centre where foreign ownership restrictions don't apply
- Consortium Agreement For Tender: Specialized agreement for multiple parties bidding together on Qatari government or infrastructure projects
Who should typically use a Joint Venture Agreement?
- Qatari Partner Companies: Local businesses holding the mandatory 51% ownership stake, providing market access and regulatory compliance
- Foreign Investors: International companies contributing technology, expertise, or capital while adhering to Qatar's foreign investment laws
- Corporate Lawyers: Draft and review Joint Venture Agreements to ensure compliance with Qatari commercial law and protect client interests
- Government Regulators: Ministry of Commerce and Industry officials who review and approve joint venture structures
- Industry Experts: Technical consultants who help define operational scope and performance metrics in sector-specific ventures
How do you write a Joint Venture Agreement?
- Business Details: Gather corporate documents, trade licenses, and ownership structures of all participating companies
- Project Scope: Define clear objectives, timeline, and resource commitments for the joint venture
- Financial Structure: Determine capital contributions, profit-sharing ratios, and funding mechanisms that comply with Qatari banking regulations
- Governance Model: Plan management structure, voting rights, and decision-making processes aligned with local corporate laws
- Exit Strategy: Outline conditions for termination, share transfer restrictions, and dispute resolution methods under Qatar law
- Regulatory Compliance: Verify sector-specific requirements and obtain necessary pre-approvals from relevant authorities
What should be included in a Joint Venture Agreement?
- Party Details: Full legal names, registration numbers, and addresses of all partners, with Qatari ownership clearly stated
- Venture Purpose: Specific business objectives, scope, and duration of the joint venture
- Capital Structure: Detailed breakdown of contributions, maintaining minimum 51% Qatari ownership where required
- Management Rights: Board composition, voting mechanisms, and decision-making thresholds
- Profit Distribution: Clear formula for sharing profits and losses under Qatar tax regulations
- Dispute Resolution: Specific reference to Qatar courts or QFC arbitration procedures
- Termination Terms: Exit procedures, asset distribution, and business continuation rights
What's the difference between a Joint Venture Agreement and a Joint Venture Shareholders' Agreement?
A Joint Venture Agreement differs significantly from a Joint Venture Shareholders' Agreement in Qatar, though they're often confused. While both deal with business partnerships, their scope and application vary considerably.
- Legal Structure: Joint Venture Agreements focus on project-specific collaboration and can be contractual only, while Shareholders' Agreements specifically govern incorporated companies with formal share capital
- Duration: Joint Ventures typically have defined project timelines, whereas Shareholders' Agreements govern ongoing company operations indefinitely
- Regulatory Requirements: Joint Ventures can operate under simpler contractual terms, while Shareholders' Agreements must comply with Qatar's Companies Law and formal corporate governance rules
- Exit Mechanisms: Joint Ventures focus on project completion and wind-down procedures, while Shareholders' Agreements emphasize share transfer restrictions and buyout rights
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