BUSINESS COOPERATION CONTRACT (BCC) - LATEST LAW ON INVESTMENT

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The Law on Investment 2020 stipulates many different forms of foreign investment in Vietnam, of which investment under business cooperation contracts (BCC contracts) is a favored investment. So what is a business cooperation contract? What does the law regulate about this type of contract? Let's find out with OTIS LAWYERS through the article below!

Legal grounds

Law on Investment No. 61/2020/QH14, dated  June 17, 2020

Decree No. 01/2021/ND-CP dated March 26, 2021 of the Government on the elaboration of some articles of the law on investment

What is a Business Cooperation Contract (BBC)?

According to the provisions of Clause 14, Article 3 of the Law on Investment in 2020, a “Business Cooperation Contract” means a contract between investors for business cooperation and distribution of profits or products without the establishment of a business organization.

Investment in the form of a business cooperation contract (BCC)

Business cooperation contracts signed between domestic investors shall be executed in accordance with civil law.

Procedures for issuance of Investment Registration Certificates in this Law shall apply to business cooperation contracts signed between a domestic investor and a foreign investor, or between foreign investors. It means that if a foreign investor invests under a BCC contract, they must carry out procedures to apply for an Investment Registration Certificate.

Parties to a business cooperation contract shall establish a coordinating board to execute the BBC. Functions, tasks, and powers of the coordinating board shall be agreed upon by the parties.

Contents of a business cooperation contract (BCC)

A BCC shall contain at least:

  • Names, addresses, and authorized representatives of parties to the contract; business address or project address;
  • Objectives and scope of business;
  • Contributions by the parties to the contract, and distribution of business investment results between the parties;
  • Schedule and duration of the contract;
  • Rights and obligations of parties to the contract;
  • Adjustment, transfer, and termination of the contract;
  • Responsibilities for breaches of the contract; method of dispute settlement.

During the execution of a business cooperation contract, parties may reach an agreement on using assets derived from the business cooperation to establish an enterprise in accordance with regulations of law on enterprises.

The parties to a business cooperation contract are entitled to agree upon other items which are not contrary to law.

Above is the advice of OTIS LAWYERS on foreign direct investment (FDI) under the law. We hope the article will be a useful reference for you.

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