As one of the business investment forms recognized by Vietnamese laws, the investment in the form of a business cooperation contract is increasingly developed because of its convenience, flexibility, and speed. Accordingly, business cooperation contracts (BCC contracts) are signed and popularized in the investment market of Vietnam, especially foreign direct investment in Vietnam. In order for the investment process to take place safely and smoothly, investors need to know about this type of contract as well as the surrounding legal issues. Therefore, LTS LAW would like to introduce some issues related to the BCC contract as follows:
I. Legal basis for signing business cooperation contracts in Vietnam
BCC contract has been recognized and adjusted by Vietnamese law very early. Up to 2020, the main legal documents governing BCC contracts include:
– Other relevant laws and regulations.
II. Parties entering a business cooperation contract in Vietnam
BCC contracts are signed between investors for the purpose of business cooperation to divide profits and products without establishing an economic organization. BCC contracts can be signed between Vietnamese investors or between Vietnamese investors and foreign investors, or between foreign investors. In case of signing between Vietnamese investors, the contract will be adjusted and implemented in accordance with civil law. In case a Vietnamese investor signs a contract with a foreign investor or a foreign investor signs a contract with each other to implement a project in Vietnam, the investor should go through the application procedure for Investment Registration Certificate.
III. Form of business cooperation contract
Although the law does not specify the form of a BCC contract, the parties need to make a written contract to have a basis for recognizing the cooperation and distribution of profits, and allocation of risks. physical. Besides, in case there is a foreign investor participating, the project needs to apply for an Investment Registration Certificate, so having a copy of the BCC contract is necessary for preparing documents. perform this procedure.
IV. Content of business cooperation contract
A BCC contract usually has the following main contents:
– Names, addresses, authorized representatives of parties to the contract; business address or project address;
– Objectives and scope of business;
– Contributions by parties to the contract and distribution of profits;
– Schedule and duration of the contract;
– Rights and obligations of parties to the contract;
– Adjustment, transfer, termination of contracts;
– Responsibilities for breaches of contract; method of dispute settlement
In addition to the above contents, the parties to a BCC contract have the right to agree on other contents that are not contrary to law.
Besides, during the implementation of a 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.
V. The Coordination Board and Executive Office of Foreign Investors in Vietnam
A characteristic of the investment form under a BCC contract is that no enterprise is established, so the parties to the contract need to set up a coordination board to perform the BCC contract. Functions, duties, and powers of the coordination board are agreed upon by the parties. In order to organize the coordination board in accordance with the project size and business objectives, the parties should consult with experts and lawyers experienced in structuring business cooperation transactions.
Contact LTS LAW BCC Lawyers.
In addition, a foreign investor may establish an executive office of a foreign investor under a BCC contract in Vietnam to perform the contract. The location of the executive office is decided by the foreign investor in accordance with the contract performance.
If you have any questions or need further advice on business cooperation contracts (BCC contracts), please contact LTS LAW Law Firm by calling (+84) 938 666 010 or emailing contact@lts.com.vn
