What is a foreign collaboration? What are the different types of foreign collaborations ? What are the important points to be kept in mind while drafting a foreign collaboration agreement ?

A foreign collaboration is an alliance incorporated to carry on the agreed task collectively with the participation of resident and non-resident entities. It is an alliance of domestic and foreign entities like individuals, firms, companies, organizations, governments etc. that come together with an intention to finalize a contract on some tasks or jobs or projects. It includes the ongoing business activities of sharing information related to financing, technology, engineering, management consultancy, logistic marketing etc. which are generally offered by non- resident foreign entity to a resident / domestic/ native entity in exchange of cheap skilled and semi-skilled labour, inexpensive high quality raw materials, low-cost hi-tech infrastructure facilities, strategic geographical location etc. with an approval from a Government authority. It is thus an alliance formed for mutual benefit of collaborating parties. The types of foreign collaborations include financial, technical, marketing and management collaborations. Financial collaboration talks about ownership, shares, long term loans, credit facilities, etc. Technical collaboration includes integration of foreign technology with domestic technology. In marketing collaboration, integration of foreign and domestic markets takes place wherein a foreign company agrees to sell goods produced by the domestic company. Under management consultancy, foreign company provides management skills to domestic company, i.e., management skills related to different functional areas are taught. While drafting a foreign collaboration agreement, the following factors should be kept in mind : Capability of the collaborator Clear definition of technical terms Specification about the product Technical knowhow Quality control mechanism IPRS