INVESTMENT PROCEDURE WITH BUSINESS CORPORATION CONTRACT (BCC)

INVESTMENT PROCEDURE WITH BUSINESS CORPORATION CONTRACT (BCC)

Nowadays, there are various forms of investment in Vietnam, among those forms, business corporation contract is (BCC) relatively flexible, assures legal rights for investors and chosen by investors. The following article shall provide an in-depth and comprehensive understanding of legal regulations and procedures for investment under BCC.

I. Legal basis

- Law on investment 2020

- Decree 118/2015/ND-CP elaborating some articles of the law on investment

II. Scope of consultation

1. What is business corporation contract

According to clause 9 Article 3 of Law on investment 2014, business corporation contract (BCC) means a contract between investors for business cooperation and distribution of profits, products without establishment of a new business organization. Therefore, this form of contract is relatively convenient for investors.

2. Content of business corporation contract

Clause 1 Article 29 of Law on investment 2014 stipulated that a BCC contract shall consist of these contents:

- Names, addresses and authorized representatives of parties to the contract; business address or project address;

- Objectives and scope of business;

- Contributions by the parties to the contract, and distribution of business investment results between the parties;

- Schedule and duration of the contract;

- Rights and obligations of parties to the contract;

- Adjustment, transfer and termination of the contract;

- Responsibilities for breaches of the contract; method of dispute settlement.

In addition, Clauses 2 and 3 Article 29 of Law on investment 2014 regulated:

- During the execution of a business cooperation contract, parties may reach an agreement on using assets derived from the business cooperation to establish a company in accordance with regulations of law on companies.

- Parties to a business cooperation contract may reach other agreements that do not contravene law

As mentioned before, the most obvious advantage of BCC is to help investors to save enterprise establishment fee but still assure business purposes of parties.

3. Investment procedure under a BCC contract

Stage 1: Applications for and contents of appraisal of requests for investment guideline approval

Step 1: Application for investment project

Investors prepare and submit at investment registration authorities. Application includes:

- An application form for execution of the investment project

- An application form for execution of the investment project (a copy of identity card, passport or investment registration certificate or equivalent documents)

- Proposal for the investment project

- Document(s) proving the financial capacity of the investor including at least one of the following documents: the investor’s financial statements for the last two years; commitment of a parent company to provide financial support; commitment of a financial to provide financial support; guarantee for the investor’s financial capacity; other document proving the investor’s financial capacity;

- Proposal for the demand for land use (if any), If the project does not require the State to allocate or lease out land or to permit land

- Repurposing, a copy of the document regarding the land use rights or other document identifying the right to use the location for execution of the investment project is required to be submitted;

- Contents of the explanation for the technology to be used in the investment project if the project requires appraisal and collection of opinions on the technology in accordance with the Law on Technology Transfer;

- BCC contract

Step 2: receiving the application

Investment registration authority receives and examines the application. If the application is complete and valid, they will receive the application and issue a receipt to the investor. If the application is incomplete, the official will guide investors to supplement and complete the application

Step 3: Appraisal and ratification for application

Within 03 working days from the date on which the sufficient application is received, the investment registration authority shall send relevant documents to relevant regulatory agencies to seek their opinions

Within 15 days from receipt of the written request for opinions, the requested agencies shall send their appraisal opinions on the contents under their management to the investment registration authority.

Within 25 days from the receipt of the application, the investment registration authority shall prepare an appraisal report and submit it to the provincial People’s Committee.

Within 07 working days from the receipt of the application and the appraisal report, the People’s Committee shall grant the investment guideline approval, and provide a written explanation in the case of refusal.

Step 4: receiving the result

Investors receive result at investment registration authority due to the day prescribed in the receipt

Result: Decision on investment guideline approval of the People's Committee of the province.

Stage 2: Application for investment registration certificate

With investment project that is subject to decision on investment guidelines: within 05 working days from the receipt of the written approval for investment guidelines and the written approval for investor with respect to the investment project that is subject to issuance of an investment registration certificate;

With investment project that is not subject to decision on investment guidelines:

Step 1: File an application form for execution of the investment project;

Step 2: Receive and examine the application

Steps are carried out exactly the same as in Stage 1

Step 3: Appraisal and approval of the application

Within 15 working days since receiving a valid application, investment registration office issue a investment registration certificate

Step 4: Receive administrative result

Investors receive result at investment registration authority due to the day prescribed in the receipt

Result: Investment registration certificate

Executing subject: investors in BCC contract

Competent agencies:

- Approving authorities: People's Committee of the province.

- Execution agencies: Department of Planning and investment.

Duration for administrative procedures:

- With investment projects that are subject to decision on investment guidelines: within 35 working days since the day of receiving valid application.

- With investment projects that are not subject to decision on investment guidelines: within 15 working days since the day of receiving valid application.

The aforementioned are the consultations about the procedure for investing under a BCC contract. HTC Law Firm is pleased to accompany clients with all legal problems. For the best consultancy service, please get in touch with us.

For more details, please contact:

HTC Vietnam Law Firm

Address: 15th Floor, Multipurpose Building, 169 Nguyen Ngoc Vu, Trung Hoa Ward, Cau Giay District, Hanoi.

Tel: 0989.386.729; Email: [email protected]

Website: https://htc-law.com; https://luatsuchoban.vn