NZ–USA Joint Ventures
One agreement, two legal systems.
At Matt and Zen we act on ventures with a party on each side of the Pacific: where the venture sits, what each party contributes, and how it is governed when the two sides are in different countries and different time zones.
A venture across a border answers to both ends of it. A structure that is efficient in one country can be costly in the other, and intellectual property developed jointly has to be owned somewhere specific.
We act on the New Zealand side and coordinate with United States counsel on theirs, rather than guess at their law.
Scope
We can assist with the following, and more.
Structure
- Which country the venture entity sits in, and why
- A New Zealand entity, a United States entity, or both
- Contractual joint ventures across a border
- How each party’s existing business connects to it
The agreement
- Contributions, ownership and profit share
- Governance across two countries and time zones
- Intellectual property ownership and licensing across the border
- Decisions that need both parties to agree
Law and disputes
- Governing law and jurisdiction
- Arbitration as a neutral forum
- Enforcement in the other country
- Dispute steps before anything formal
Running it
- Reporting obligations in both countries
- Related-party dealings, with your accountants
- Changes of control on either side
- Exit, and unwinding across a border
Disputes
Arbitration is often the neutral answer.
Neither party to a cross-border venture usually wants a dispute heard in the other’s courts, and that disagreement can stall an otherwise settled negotiation.
Arbitration gives both a neutral forum. It also travels better: an arbitral award is generally easier to enforce in another country than a court judgment, which is the part that decides whether winning is worth anything.
We raise the clause early, because by the time it matters it cannot be changed.
Questions
Frequently asked questions.
Where should the venture entity sit?
It depends on where the work happens, where the revenue is earned and what each party needs for tax. It is a question to answer with both countries’ advisers before anything is formed.
Who owns intellectual property created by the venture?
Whoever the agreement says. Without a clause, this becomes the most expensive argument available to you, in two jurisdictions at once.
Why arbitration rather than court?
Neutrality, and enforceability. An award is generally easier to enforce across a border than a judgment, which is what makes the difference at the end.
Do you act on the United States side?
No. We act here and coordinate with United States counsel there. We will brief them and work with them, but their law is theirs.
Can a venture use both a New Zealand and a United States entity?
Yes, and it is common. It adds reporting in both countries, so it is worth being deliberate rather than ending up there by accident.
What happens if one party is bought?
Whatever the change of control clause says. If there is not one, you may find yourself in a venture with a party you did not choose.