1. Objectives of the joint venture.

Before considering the order of creation of joint ventures, we must answer the question - what are the purposes of creating a joint venture? Nowadays many experts from different countries trying to ask this question. In their opinion the basis for the establishment of joint ventures are these factors:

• increasing the number of high quality goods in the internal market with the prospect of complete saturation of the market;

• involvement advanced foreign equipment and technology, using the experience of foreign companies to conduct business affairs in joint ventures;

• a significant increase in the quality of products and gradual emergence to the world level;

• development of export potential, creation of departments for the foreign market with competitive products;

• attraction of additional financial and material resources, the binding of foreign firms to the internal market.

As the joint venture is created by two or more parties on the basis of a joint agreement on the principle of mutual benefit, there must be profitable and reasonable targets considered.

The joint venture provides:

1). Attraction of foreign capital. For countries whose economies are needs large amounts of foreign capital, the joint venture is the most effective way to attract it.

2). Transfer of technology. For recipients of advanced technology joint ventures are a tool for their preparation; for the country (or firm) transmitting technology, joint ventures are considered to be rational and more effective way to export technology. Through the joint venture participants share their experience of management and production discoveries and "know-how." There are new brands of industrial products on the market, created by joint ventures.

3). Exchange of management experience. Not only developing countries in need of management experience, which is given in the joint venture, but also to investors, managers of industrial countries, investors also need skills and management experience in other countries.

4). Overcoming of protectionism and trade barriers, development of new markets. For many multinational companies joint ventures are one of the leading strategies to overcome protectionist barriers and going out to new markets. As for investors, favourable conditions to increase the scale of production are being created. By working with local partners, foreign investors and participants can use natural resources, cheap labour. That is why costs of production are lower.

Thus, in the process of achieving the goals the Republic of Kazakhstan performs the following tasks: introduction of new technology, advanced technology and know-how, the saturation of the internal market with high quality goods and services, state supporting and stimulating domestic producers, the development of import-substituting industries, rational and complex use of raw materials, the introduction of modern methods of management and marketing, creating new jobs, introduction of system of continuous training local staff, improving their qualifications systems, provision of an intensification of production, improvement of the environment. Therefore, the creation and development of joint ventures is an objective and inevitable result of foreign economic activity around the world. Establishment of joint ventures is a significant and responsible process, during which the preconditions of reliable and efficient functioning of organization are formed; an essential basis for its subsequent activity is also being formed. Establishing the order of creation joint ventures in Kazakhstan assigned to the competence of Kazakhstani Government.² Currently, this procedure is established by the following laws:

"On foreign investments" from 27.12.94.

"On state support of direct investments" from 28.02.97.

"On property" on 04.09.93.

"The Civil Code of the Republic of Kazakhstan" dated 27.12.94.

"On the protection and promotion of private enterprise" from 04.06.95, etc.

For example, for the state support of direct investments (all types of investments, excluding investments associated with sovereign guarantees RK and included in framework of official technical assistance or grants provided by the Republic of Kazakhstan) is to create a favourable investment climate to ensure the accelerated development of production of goods, works and services.