1. Concept

Pursuant to Clause 14 Article 3 of the Law on Investment 2020, a business cooperation contract (hereinafter referred to as a BCC contract) is a contract signed between investors for business cooperation, profit sharing, product division in accordance with law without establishing an economic organization.

2. Contents of BCC contract according to the Investment Law 2020

– BCC contract includes the following principal contents:

• Name, address, authorized representative of the parties to the contract; transaction address or location of the investment project;
• Objectives and scope of business investment activities;
• Contributions of the parties to the contract and division of business investment results between the parties;
• Progress and duration of contract performance;
• Rights and obligations of the parties to the contract;
• Modification, assignment, termination of the contract;
• Liability for breach of contract, method of dispute resolution.

– During the performance of the BCC contract, the contracting parties may agree to use assets formed from business cooperation to establish an enterprise in accordance with the law on enterprises.

– The parties to the BCC contract have the right to agree on other contents that are not contrary to the provisions of law. (Article 28 of the Law on Investment 2020)

3. Forms of investment under BCC contract

– BCC contracts signed between domestic investors shall comply with the provisions of civil law.

– BCC contracts are signed between domestic investors and foreign investors or between foreign investors carrying out procedures for issuance of Investment Registration Certificates as prescribed in Article 38 of the Law on Investment 2020, specifically:

 The investment registration agency shall grant the Investment Registration Certificate for investment projects subject to approval of investment policies specified in Articles 30, 31 and 32 of the Law on Investment 2020 within the following time limits:

• 05 working days from the date of receipt of the written approval of the investment policy concurrently with the investor’s approval for an investment project subject to the issuance of an Investment Registration Certificate;
• 15 days from the date of receipt of the investor’s request for an Investment Registration Certificate for an investment project other than the case specified at Point a, Clause 1, Article 38 of the Law on Investment 2020;

 For investment projects not subject to approval of investment policies specified in Articles 30, 31 and 32 of the Law on Investment 2020, investors shall be granted an Investment Registration Certificate if they satisfy the following conditions:

• Investment projects not in industries or trades prohibited from business investment;
• Having a location for implementation of investment projects;
• The investment project conforms to the planning specified at Point a, Clause 3, Article 33 of the Law on Investment 2020;
• Satisfy the conditions on investment rate per land area, number of employees used (if any);
• Meet market access conditions for foreign investors.

– The Government shall detail conditions, dossiers, order and procedures for issuance of investment registration certificates.

– The parties to the BCC contract establish a coordinating committee to perform the BCC contract. The functions, tasks and powers of the coordinating board shall be agreed upon by the parties.

4. Establishment of executive office

– Foreign investors in BCC contracts may establish executive offices in Vietnam to perform the contract. This office has a seal; may open accounts, recruit employees, sign contracts and conduct business activities within the scope of rights and obligations specified in the BCC contract and the Certificate of registration of establishment of executive offices.

– The establishment of this office is not mandatory. However, the establishment of an executive office helps Investors easily manage the financial resources of the project, clearly distinguishing the activities of the project for the activities of the company Investors and employees.

Above is the content of KALF’s advice on Investment in the form of BCC contract of foreign investors in Vietnam. All of our above advice opinions are based on applicable legal provisions. If you have any questions or requests about legal issues, please contact us for timely answers.