Business cooperation contract according to Vietnam’s regulations

LawNet would like to answer your question as follows:

According to Clause 9 Article 3 of the Law on Investment 2014 of Vietnam, business cooperation contract means a contract between investors for business cooperation and distribution of profits, products without establishment of a new business organization.

This Article also clarifies the term “investor”, which means an organization or individual that makes business investments, including:

- Vietnamese investor means an individual holding Vietnamese nationality or a business organization whose members or shareholders are not foreign investors.

- Business organization means an organization established and run in accordance with Vietnam’s laws. Business organizations include companies, cooperatives, cooperative associations, and other organizations that make business investments.

- Foreign investor means an individual holding a foreign nationality or an organization established under foreign laws and making business investment in Vietnam.

- Foreign-invested business organization means a business whose members or shareholders are foreign investors.

Thus, a business cooperation contract may be concluded between investors who are individuals and individuals, between individuals and organizations or between organizations; between Vietnamese investors and foreign investors.

Things about business cooperation contracts (BBCs):

1. Investment activities formed on the basis of establishing a BCC contract have no organizational constraints but only the rights and obligations agreed upon in the contract due to the fact that the BCC contract does not establish a new legal entity;

2. In terms of form, the BCC contract is not required to be made in writing, except in cases where the investment project must carry out investment registration procedures or project verification;

3. The content of the contract is business cooperation agreements between investors, contributing business capital, sharing profits and sharing risks. The main contents include:

- 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.​

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