What is a BCC contract under Vietnam's Law on Investment 2020?

What is a BCC contract under Vietnam's Law on Investment 2020? (Illustration)

1. What is a BCC contract?

In Clause 4, Article 3 of Vietnam's 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, and product distribution. products as prescribed by law without establishing economic organizations.

Thus, it can be understood that the nature of a business cooperation contract is between two or more entities who share the same business project and want to perform together. However, if they do not want to become an economic organization, they can establish a business cooperation contract in the form of a BCC (Business Cooperation Contract) to demonstrate the investment linkage between the two parties.

2. Businesses that enter into BCC contracts

According to Clause 2, Article 27 of Vietnam's Law on Investment 2020, a BCC contract is signed between:

- Domestic investors with foreign investors;

- Foreign investors shall carry out procedures for the issuance of Investment Registration Certificates in accordance with regulations, including:

+ Investment projects are subject to approval of investment policies by the National Assembly, the Prime Minister, and the People's Committee of the province;

+ The investment project shall be subject to the approval of the above investment policy; the investor shall be granted an Investment Registration Certificate if it satisfies the following conditions:

• Investment projects that are not in prohibited sectors or trades;

• Having a location for the implementation of the investment project;

• Investment projects in accordance with national planning, regional planning, provincial planning, urban planning, and planning of special administrative-economic units (if any);

• Satisfying the conditions on investment rate per land area and number of employees (if any);

• Meeting market access conditions for foreign investors

3. Contents of the BCC's contract 

A BCC contract includes the following main contents according to Article 28 of Vietnam's Law on Investment 2020:

• Contract parties' names, addresses, and authorized representatives; transaction address or location of the investment project;

• Objectives and scope of business investment activities

• Contributions of the parties to the contract and distribution of business investment results between the parties;

• Progress and duration of contract performance

• Rights and obligations of the parties to the contract

• Amending, transferring, terminating the contract;

• Liability for breach of contract, method of dispute settlement

Furthermore, the parties to the BCC contract have the right to agree on other terms that are not in violation of the law. 

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE