Joint Ventures 2024 Comparisons

We have not witnessed positive changes in joint venture activities in Haiti in the last 12 months, mainly because of instability in the country.

The main industries that create the most jobs in the country and are more profitable nowadays are the textile, construction and energy sectors.

We do not have specific joint venture legislation in Haiti. Therefore, joint ventures are typically either corporation and are entirely ruled by the legislation on corporation and by the by-laws, or general partnership and are entirely ruled by the partnership agreements between the participants. Alternatively, joint ventures can be a consortium of companies who are governed by the consortium agreement.

The primary drivers for choosing the appropriate joint venture vehicle is the liability of the participants. In some structures, the liability of the participants will be unlimited and in others their liability will be limited to their contributions.

Haiti does not have any statutory provisions on joint ventures. They are usually regulated by the contractual agreements.

The AML regulations that currently apply in Haiti are the Decree of 30 April 2023 sanctioning money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction.

The main restrictions on co-operating with joint venture partners are provided by the law on corporation, which specifies that individuals that have been bankrupted or condemned for stealing, scamming, breach of trust or any crime related to money or participated in the bankruptcy of a company which they were directors of cannot be directors. However, they can be shareholders.

We do not have specific antitrust regulations that apply to joint ventures in Haiti.

There are no specific rules in Haiti concerning listed party participants to joint ventures.

Haiti doesn’t have any particular disclosures regarding people with significant control or ultimate beneficial owner.

Unfortunately, given the instability in the country over the last few years, there haven’t been any significant court decisions or legal developments relating to joint ventures or business collaboration.

Typically, DDQ, mutual NDAs and HoTs are used during the negotiating stage of a joint venture.

There are no regulatory requirements around disclosing the joint venture. However, if the joint venture vehicle is a corporation, the general rules applying to the corporation will also be applicable to the joint venture. In Haiti, after receiving authorisation from the Minister of Commerce and Industries to operate, the company information must be published in the Le Moniteur official gazette. For other joint venture structures, there are no particular requirements regarding disclosures.

Two or more corporations in Haiti, called Société Anonyme get together and register a new company in the sector that they want to operate in. Alternatively, two or more corporations get together and enter into a consortium agreement for a specific project or projects.

Depending on the form of joint venture vehicle, the terms will be specified in the by-laws of the joint venture or the consortium agreement. The terms can also be included in the internal regulations of the joint venture.

The main terms that a corporate joint venture agreement would be expected to cover are the sector or sectors the activities are being carried out in, the share capital, the amount of shares, the constitution of the board of directors and voting rights, the limitation of the liability of the participants, confidentiality, conflict resolution and dissolution rules.

Decision-making in the joint venture entity will be made according to the voting rights stipulated in the by-laws, or according to the consortium agreement between the participants.

The joint venture entity will typically be funded by the shareholders’ contributions.

The funding can also be made by contribution in kind. For example, in construction joint ventures, it is not uncommon for the participants to contribute by making equipment available to the joint venture entity.

If one participant injects funds into the company, they would typically do so through a share capital increase with the creation of new shares. This usually has to be done through an extraordinary general assembly resolution so all the participants are aware and vote accordingly.

If there are deadlocks between the board and the participants, the issue will be dealt with by a vote of the majority or any other way provided in the by-laws or according to provisions in the consortium agreement.

Assets and IP licences are usually brought in the joint venture entity as shareholders’ contribution.

In the case of a joint venture corporate entity, the participants must determine the role that they will play on the board, but control on the board will depend on the participants’ contributions. In other words, their power on the board will be reflected by their contributions.

Weighted voting rights are recognised in Haiti and are very often used to ensure board control.

The principal duties of directors in Haiti are to ensure the general management of the company. The joint venture board can delegate their functions to sub-committees but retain responsibility.

There are no general rules when it comes to conflicts of interest. It will most likely be dealt with on a case-by-case basis. Furthermore, in Haiti most joint venture structure are corporations, which means they are considered legal persons and are distinct from the participants that are running them.

In other cases, the potential conflicts of interest are managed according to the consortium agreement’s provisions.

The key IP issues that should be considered when setting up a joint venture corporate entity are who will have property of the IP rights upon termination or dissolution of the joint venture. For example, where the joint venture owns trademarks.

In construction consortiums, most of the time the consortium bears the name of the participants so that upon termination, there are no issues related to the ownership of the name.

Ideally, IP rights should be licensed to allow the owner to retain property of their rights if the joint venture is dissolved.

While our Environmental Protection Law does have certain dispositions related to the protection of the environment, there are no specific ESG regulations in Haiti.

Usually, as joint venture structures are corporations, they end with the dissolution of the company.

The general matters that should be dealt with on termination of the joint venture are the nomination of a liquidator and the sharing of assets, if any, between the participants.

In terms of joint venture structures that are not corporations, the dispositions related to termination are specified in the agreement.

Consideration will have to be given to transferring assets between participants. If the assets are originally from a participant, they will remain the property of that participant and at the dissolution of the joint venture, they will regain possession of the asset in question. If they are originating from the joint venture itself, it will be distributed amongst the participants in proportion to their contribution in the joint venture.