Wednesday, March 9, 2011

A New Type of International Partnership

I was reading an informative article from The Economist today which discussed the trend in developing economies to support large conglomerates, such as The Tata Group, which hold a wide range of unrelated companies from around the world. The article got me thinking about international business partnerships and a new way to form powerful multinational companies.

Traditionally, companies are formed within a single country. Companies grow to an international scale by exporting, licensing, forming strategic partnerships or building foreign subsidiaries. Or, companies from different countries can merge to form new, multinational entities.

As businesspeople and students from around the world continue to interact more with each other and, and as experienced businesspeople's contact lists more frequently include counterparts from foreign nations, I foresee a time in the not-too-distant future where entrepreneurs from geographically diverse areas of the world build companies together from day one.

Imagine a new technology company, for example. I can see one partner living in India, in charge of customer support and product design; another partner living in Mexico, in charge of manufacturing and logistics; and a third partner in the Netherlands, in charge of marketing and finance, with the company organized in a fourth country, like the United States, that offers a favorable business and political environment.

The first truly multinational partnerships--companies formed by partners living in different countries--could easily spring up in areas such as the European Union of the NAFTA zone, where trade and tourism barriers are virtually non-existant. After that, the sky is the limit.

How might you take your business idea to the next level by adding a partner from a different country?

Further Reading
The Economist: Tata Sauce Share


  1. Sounds a good thought. However, what is the legal support to make such an international business possible? Since to form such a multinational business, the difficulty lies in the understanding each country's policies and export controls.

    1. That's very true. Finding a partner whom you can trust is essential when forming a partnership with a company in another country, since you cannot rely on the full protection of your native legal system in case of a dispute. I recommend meeting partners in person, at a minimum, and doing extensive research before signing a deal.