When investors wish to jointly contribute assets and efforts for business purposes but are not ready to establish an economic organization, they often choose to invest under the Business Cooperation Contract (BCC) format. So, what should foreign investors pay attention to when investing under the BCC contract? In this article, TNTP will analyze the key points that foreign investors need to consider.
1. Procedure for Investment Approval
If the investment project requires investment approval, the investor must follow the procedures for requesting investment approval as prescribed by law. According to the law, investment projects that require investment approval are projects that have significant scale, impact on the economy, society, and environment, and thus need approval from competent authorities such as the National Assembly, the Prime Minister, or the Provincial People’s Committee (Articles 30, 31, and 32 of the 2020 Investment Law). After obtaining approval from the competent authority, the investor will be granted an Investment Registration Certificate (IRC) as stipulated in Article 38 of the 2020 Investment Law.
2. Procedure for Issuance of Investment Registration Certificate
• Based on the provisions of Article 27.2 of the 2020 Investment Law, domestic investors and foreign investors or foreign investors investing under the BCC contract in Vietnam must follow the procedures for obtaining an IRC as prescribed by law.
• For investment projects that do not require investment approval, the investor submits the IRC application file to the Investment Registration Authority. Based on that, the Investment Registration Authority will review and issue the IRC to the investor within 15 days from the date of receiving a complete and valid application file if the investment project meets the conditions prescribed by law.
3. Establishment of the Coordinating Board
Based on the provisions of Article 27.3, parties to a business cooperation contract shall establish a coordinating board to execute the BCC. Functions, tasks and powers of the coordinating board shall be agreed upon by the parties.
4. Establishment of the Operating Office
• A foreign investor to a business cooperation contract may establish an operating office in Vietnam to execute the contract. The location of the operating office shall be decided by the foreign investor depending on the requirements for contract execution.
• The operating office of a foreign investor to a business cooperation contract has its own seal; the foreign investor may open an account, hire employees, sign contracts and carry out business activities under the business cooperation contract and Certificate of registration of the operating office.
• The foreign investor to the business cooperation contract shall submit the application for registration of operating office to the investment registration authority of the area where the operating office is intended to be located (Article 49 of the 2020 Investment Law).
5. Shutdown of the Operating Office
• Within 07 working days from the day on which the decision to shut down the operating office is issued, the foreign investor shall send a folder to the investment registration authority of the area where the operating office is located. Within 15 days from the receipt of the application, the investment registration authority shall issue the decision to shut down the operating office.
• The folder consists of:
a) A decision to shut down the operating office in the case of shutdown of the operating office ahead of schedule;
b) A list of creditors and amount of debts which have been paid;
c) A list of employees and their benefits provided;
d) A tax authority’s certification of fulfillment of tax liability;
dd) A social security authority’s certification of fulfillment of social insurance obligations;
e) The certificate of operating office registration;
g) A copy of the investment registration certificate;
h) A copy of the business cooperation contract.
These are the contents of the article “Important Considerations for Investment under the BCC Contract in Vietnam” provided by TNTP. If you have any further questions or need assistance, please contact TNTP for the best support.