BCC is the type of contract chosen by foreign investors because of its time- and money-saving nature; while complementing each other among investors. So what is BCC and how does it work? LSX will explain it in the article “Regulations on Business Cooperation Contract under Vietnamese Law”.
- 2020 Investment Law
What is Business Cooperation Contract?
Accordingly, Business Cooperation Contract (BCC) is an investment form between investors for business cooperation, profit sharing and product distribution without establishing a new legal entity. Indeed, this form of investment helps investors to conduct investment activities quickly; without spending time and money to establish and manage a new legal entity.
Hence the subject of the contract, the law governing the contract will be different. Specifically:
- BCC contracts between domestic investors comply with the provisions of civil law
- The BCC contract between a domestic investor and a foreign investor or between foreign investors who carry out the procedures for issuance of an Investment Registration Certificate.
In this article, we will spend time to comprehend the second subject of BCC.
Content of the BCC contract
Basically, content of the business cooperation contract will include these following factors?
- Names, addresses and authorized representatives of the parties to the contract; transaction address or address where the project is implemented
- Objectives and scope of business investment activities
- Contributions of the parties to the contract and the distribution of the business investment results between the parties
- Progress and duration of the contract performance
- Amending, transferring, terminating the contract
- Liability for breach of contract, method of dispute resolution
- In addition to the above content, the participants have the right to agree on other contents that are not contrary to the provisions of law
Operation structure of the BCC contract
Thus the regulation of 2014 Investment law, the parties of the BCC contract need to establish a coordination committee to perform the BCC contract. In fact, the parties shall agree on the power of the coordination board, functions and duties.
Moreover, during the implementation of the BCC contract, the parties to the contract may agree to use the assets formed from the business cooperation to establish an enterprise in accordance with the law on enterprises.
Lastly, thank you for paying attention. Hope this article “Regulations on Business Cooperation Contract under Vietnamese Law” could help you solve your problem. If you have any questions, please contact Lawyer X for quick and best legal services: 0833102102.
Foreign investment means that organizations and individuals of one country bring capital in different forms into another country to conduct business activities for profit. Foreign investment is made in the form of direct investment or indirect investment.
Accordingly, there are 3 other ways: PPP contract; capital contribution, purchase of shares, purchase of contributed capital; establishment of an economic organization.
Most investors choose BCC due to these reasons:
– This type of contract help them save a lot of time, effort, and money
– The parties can support each other’s shortcomings and weaknesses.