Ausländische Kapitalbeteiligungen in Jugoslawien (joint ventures)

Abstract

Foreign Capital Participations in Yugoslavia (Joint Ventures)

Following a brief review of the legal regulations governing foreign capital participations in Yugoslavia (so-called joint ventures), the various controversial problems arising from the difference between the legal and economic forms of organization in a socialist society on the one hand and the western market economies on the other are dealt with from the theoretical standpoint and practical solutions are demonstrated. The chief theoretical problem is that of ownership and the related legal nature of the foreign share in a Yugoslavian joint venture. Other aspects that are of equal importance for the foreign investor, however, are the questions of control and management of the joint venture, and also the liability and taxation of the foreigner. Without departing from the principles laid down in the constitution, the Yugoslavian legislature has granted the foreign partner practically almost the same rights as he would have had, if, with his participation, he had received private co-ownership of the enterprise. Thanks to the fact that the law has left the settlement of numerous individual questions to the parties, the latter have in many cases found ingenious solutions for achieving a mutual balance of interests. Proof of this may be seen in the fact that the existing joint ventures are flourishing economically and that so far no disagreement has arısen. Macroeconomically, however, the success ha sbeen more modest. Although the number of registered agreements (over 120) may be regarded as far from insignificant, interested foreign investors are hesitant. For all that, the system should be retained and perfected by clarification of still controversial points by the official agencies. This would also be in conformity with OECD aims. For on the whole, the Yugoslavian experiment with joint ventures has shown that fruitful economic co-operation between East and West is possible, if limited to purely economic goals.