Apostolos Georgiades & Associates

Chapter for Greece in: Campbell (ed.), International Joint Ventures

Originally published by LexisNexis , 2003.

INTRODUCTION

[1] Introduction

Joint ventures have a significant role in the development of business on an international level. Constituting a flexible business undertaking, they encompass a wide range of activities offering the opportunity to enterprises and entrepreneurs to develop and engage in a variety of business activities that could not be otherwise carried out effectively. Joint ventures constitute an effective means of foreign direct investment, as well. Such investment is achieved through the means of equity capital, namely participation in a foreign company either by acquisition of shares or through other equivalent forms of participation in the case of unincorporated enterprises. This is how joint ventures are commonly perceived in Greece.

A joint venture is a legal organization formed on the basis of a cooperative business agreement and it results in the allocation of shares and profits as well as of the provision of capital, expertise, and technology for the accomplishment of a certain objective. A joint venture may take various forms ranging from a jointly owned subsidiary, a partnership, or merely a joint agreement.

By the term ''joint venture'' in an international context are usually regarded all forms of co-operation between enterprises.n1 In Greek, the formation of joint ventures is rendered with the term ''koinopraxia''. A ''koinopraxia'' constitutes a creation of business transactions resulting from the freedom of contract doctrine. As such, however, it is not formally acknowledged in the field of commercial and corporate law. Those two terms, therefore, are not precisely correspondent one to the other: A joint venture constitutes actually a joint enterprise irrespective of the way it has been formed or is being carried out, whereas the term ''koinopraxia'' designates the form of cooperation, by virtue of a contract, usually between enterprises, not belonging to a certain statutory corporate form. In other words, it could be characterized as a ''stricto sensu joint venture'', since the term ''joint venture'' as internationally used is broader than what is common in Greek terminology. In any case, a ''koinopraxia'' falls within the concept of affiliated company. A clearer view of the status of joint ventures in general in Greece will be provided..

Joint ventures have a quite vivid presence in business activity in Greece, especially in the field of construction and public works. Most significant public works, due to their complexity, are undertaken by joint ventures of technical and construction companies, thus benefiting from the knowledge and expertise of each other. The role joint ventures play with regard to bids for the award of a project in various sectors of business is quite important as well; apart form the common undertaking of works or of a project, quite often participation followed by submission of a feasibility study is conducted by joint ventures set up only for said purpose. In almost any sector of business, one may come across joint ventures since the range of their activities is unlimited, based on free will of the parties.

Joint ventures are viewed so favourably by the Greek State and by Greek entrepreneurs, because this business vehicle constitutes a significant means of foreign investment, stimulating economic development of the country and contributing to job creation and transfer of new technology. [...]

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