A joint venture is a partnership between a foreign firm and a local company sharing ownership and control. A wholly owned subsidiary gives the foreign firm 100% ownership and full control. The choice involves a trade-off between local knowledge and operational control.
Joint Venture vs Wholly Owned Subsidiary When a firm decides to enter a foreign market through foreign direct investment — committing capital to own and operate foreign assets — it faces a fundamental choice: share ownership with a local partner (joint venture) or own the operation entirely (wholly owned subsidiary). This decision shapes the firm's control, risk exposure, and ability to integrate the operation into its global network. Key Takeaways A joint venture (JV) shares ownership, risk, an