PROCEDURES FOR FOREIGN INVESTMENT INTO VIETNAM BY BUSINESS COOPERATION CONTRACT (BCC CONTRACT)

The current law regulates many different forms of foreign investment in Vietnam, of which investment under business cooperation contracts (BCC contracts) is a favored investment. In the following article, DTD would like to have a clearer analysis of the form of foreign investment in Vietnam under the BCC contract based on the current legal regulations, thereby providing the most overview of the form of this investment.

1. What is BCC contract?

Clause 9, Article 3 of the 2014 Law on Investment defines a BCC contract as follows:

“Article 3. Interpretation of terms

9. Business cooperation contract (hereinafter referred to as BCC contract) means a contract signed between investors for the purpose of business cooperation to divide profits and products without establishing an economic organization. "

So, in essence, investment under a BCC contract is when two or more investment entities link together to carry out a business project. However, these investors do not want to set up a new economic organization because of many reasons such as the project needs to be conducted immediately or the establishment procedure is too expensive and complicated. At this time, the parties will establish a business cooperation contract in the form of BCC to show the investment linkage between the two parties.

2. Investment procedures in the form of a BCC contract

For an investment project in the form of a BCC contract, current laws impose stricter regulations on projects where foreign investors are involved in projects compared to projects in which the subjects are investors. domestic investment. Specifically, according to the provisions of Clause 2, Article 28 of the 2014 Investment Law:

“Article 28. Investment in the form of a BCC contract

2. A BCC contract is signed between a domestic investor and a foreign investor or between foreign investors performing the procedures for issuance of an investment registration certificate as provided for in Article 37 of this Law. "

Thus, with a BCC contract signed between a domestic investor and a foreign investor or between foreign investors, the investor needs to apply for an Investment Registration Certificate. Under the provisions of Article 37 of the Law on Investment 2014, Articles 29, 30, and 31 of Decree 118/2015 / ND-CP detailing and guiding the implementation of a number of articles of the Investment Law, procedures for applying for the Certificate Investment registration is received as follows:

Step 1: Submit investment project documents

The Investor submits the registration file to the Investment Registration Authority. Records include:

- Proposal for investment project implementation;

- Copy of ID card, ID card or passport for individual investor; a copy of the Establishment Certificate or other equivalent document certifying the legal status of the institutional investor;

- Investment project proposal includes the following contents: investor implementing the project, investment objectives, investment scale, investment capital and capital raising plan, location, duration, investment schedule investment, labor demand, proposal for investment incentives, assessment of the project's socio-economic impact and efficiency;

- A copy of one of the following documents: investor's financial statements for the last 2 years; commitment to financial support of the parent company; commitment to financial support of financial institutions; guarantees on investors' financial capacity; documents explaining the financial capacity of the investor;

- Proposal on land use demand; In case the project does not request the State to allocate land, lease land, or permit the change of land use purpose, submit a copy of the lease agreement or other documents certifying that the investor has the right to use the site for actual purposes. current investment project;

- Explanation on the use of technology for the project specified at Point b, Clause 1, Article 32 of this Law, including the following contents: technology name, origin of technology, technology process diagram; main specifications, usage status of main machinery, equipment and technological line;

- BCC contract.

Step 2: Receiving and checking documents

The investment registration agency shall receive and check the dossier. If the dossier is complete and valid, it shall receive the dossier and issue the dossier-receiving paper to the investor; If the composition of the dossier is not complete, the receiving / guiding specialist will explain for the investor to supplement and complete the dossier.

Step 3: Evaluate and approve the application

- For investment projects not subject to investment policy decision: The investment registration agency shall appraise and approve the dossier.

- For an investment project subject to investment policy decision of the People's Committee of a province: The investment registration agency shall collect appraisal opinions of a competent state agency on the content of the investment project. management scope of that agency.

- For investment projects subject to the investment policy decision of the Prime Minister: The investment registration agency shall consult the Ministry of Planning and Investment and competent state agencies on the contents. investment projects under the management of that agency.

Step 4: Receive the decision on investment policy (for investment projects subject to investment policy decision)

Within 25 days (for investment projects subject to investment policy decision of the People's Committee of the province) or 50 days (for investment projects subject to investment policy decision of the Prime Minister government) from the date of receipt of valid documents, the authority shall decide on investment policy.

Step 5: Receive administrative settlement results

Within 15 days from the date of receipt of a valid application (for investment projects not subject to an investment policy decision) or 05 days from the date of receipt of the decision on investment policies (for for an investment project subject to investment policy decision), the investment registration agency shall grant an investment registration certificate to the investor.

After being granted the Investment Registration Certificate, investors can carry out investment activities to implement the project according to previous agreements in BCC Contract.