Further discussions

In general, governments appreciate that foreign investment can, and in most cases does, bring substantial benefits to their economics. This is especially true of development nations. However, it is necessary to keep in perspective the objectives and desired benefits which are sought by the host government through such investment. These may include job creation, regional development, the development of technical skills and local technology, and benefits to local suppliers. Discussions with the relevant local authorities will indicate if your particular project conforms to the social and economic goals of the host country.

In addition to discussions with government officials, you are also advised to discuss the investment climate with local banks. Canadian banks, the Export Development Corporation, are with foreign investors already operating in the country.

Choice of partners

When you have decided to establish a manufacturing facility or to invest in resource development in a foreign country, you face the task of choosing a partner. We at Canada Wire believe this to be the most important consideration in the establishment of a joint venture. Since our company has a policy of taking a minority interest in overseas partnerships, you will understand the importance we place in choosing a partner.

Finding an appropriate partner requires a careful identification and selection process. The key to making the right choice is identifying a common interest on both the short and long term. Complementary characteristics and complete mutual trust are also crucial. Our company's experience indicates that a period of one year or understanding or the absence of common interest can be identified during the course of an extendive and extended evaluation process. It may happen, for example, that while partners share common short-term goals, their long-term goals conflict. Differences can either be resolved or be the basis for withdrawal from proposed partnership.

Local management

Our company believes that the joint venture should be managed by local people. They are more sensitive to the political, social and economic conditions in which the company must operate and they are better able to represent the company to the customers, the government and the people. While our company may provide short-term expertise in some aspects of the business, reliance is placed on local management. It is therefore important that partners possess first-class management skills.

Partnership

No partnership agreement can be drafted by lawyers and accountants and be made to work without a firm commitment from the people involved. There must be a consensus between the partners and they must be able to resolve differences as they arise.

People from different cultures can work together in our Nigerian joint venture, the partners are Nigerians, Hong Kong Chinese and Canadians. The venture works well, one reason being that the partners continue to need each other. This is a necessary characteristic of all joint ventures.

We expect a partner to be an participant in the business, not merely a businessman interested in investing money alone.

You will, of course, need your own lawyer in the host country and you should ensure that your interests are represented in the company's Board of Directors.