Currently, investment under the BCC Contract is a form of investment that integrates many potentials and business advantages of many investors in an investment project. When an investor does not meet the conditions to implement the project (such as lack of capital, lack of management experience, no human resources to implement the project,…), the investor will look to the option of calling for one or several other investors to implement the project together, Share the profits as well as risks (if any). What is a BCC contract? Let's find out in the article below!
What is a BCC contract?
BCC stands for "Business Cooperation Contract" which means business cooperation contract. According to the Investment Law 2020, this is a contract signed between investors to cooperate in business to divide profits or divide products without establishing an economic organization.
Conditions for foreign investors
According to the Investment Law 2020, BCC contracts signed between domestic investors and foreign investors or between foreign investors must carry out procedures for issuance of investment registration certificates. This means that if only one party participating in the BCC contract is a foreign investor, the investor must carry out the procedure for applying for an investment registration certificate.
Content of BCC contracts
- Names, addresses and competent representatives of the contracting parties; transaction address or address where the project is carried out.
- Objectives and scope of business investment activities.
- Contributions of the parties to the contract and the division of business investment results between the parties.
- Progress and duration of contract execution.
- Rights and obligations of the parties to the contract.
- Amendment, transfer, termination of contract.
- Liability due to breach of contract, dispute settlement method.
- In addition to the contents on the parties, they have the right to agree on other contents that do not conspices the provisions of law.
Reasons to choose to invest in the form of bcc contracts
First, with this form of investment:
The parties can support each other's shortcomings and weaknesses in the production and business process. For example, for new investment markets, foreign investors will be easily accessible through domestic partners who understand the market. Domestic investors can be supported by foreign partners in terms of capital, human resources and modern technology.
Secondly, the form of investment under the BCC contract:
It can help investors save a lot of time and effort by not having to establish a legal entity before launching an investment project and conducting business activities.
Third, the investment under the BCC contract:
Also help investors when signing the selection of capital contribution plans, divide business results in accordance with the level of contribution of the participants, quite in line with the actual situation in our country.
Fourth, during the implementation of the contract:
The investor in the name of his or her independent legal status to actively exercise the right rights and obligations. Independent legal status helps the parties not to depend on each other, creating active flexibility in business activities on an equal, non-binding basis.
Fifth, here's the simple form of investment:
Simple procedures, this form of investment helps to earn profit soon, suitable for projects that need to be implemented quickly, short investment term. Since investors do not take long to build new production facilities, the project size can be flexible.
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