A business cooperation contract (BCC) is a flexible alternative to traditional incorporation, significantly reducing the time and regulatory burden for foreign investors entering the Vietnamese market. To ensure transparency and mitigate disputes, a BCC contract must be well-structured and strictly align with Vietnamese law and the international treaties to which Vietnam is a signatory.

In this guide, Hung Phi Law Firm provides information about Foreign investment via business cooperation contract (BCC) in Vietnam to help foreign investors navigate and comply with Vietnam’s regulatory framework.

1. Overview of business cooperation contract (BCC)

General information about business cooperation contract (BCC)

A business cooperation contract (BCC) is a flexible investment model in Vietnam that allows parties to collaborate on specific business projects without establishing a new legal entity. This structure is particularly favored by foreign investors who seek to leverage local expertise while maintaining operational speed.

1.1. Definition of business cooperation contract (BCC)

According to Clause 14, Article 3 of the Vietnamese Law on Investment 2025, a business cooperation contract (herein after referred to as BCC) means a contract between investors for business cooperation and distribution of profits or products without the establishment of a business organization.

1.2. Key characteristics of a business cooperation contract (BCC) 

– Non-equity partnership: Unlike a joint venture, a BCC does not involve the creation of a separate legal entity. The parties collaborate solely on a contractual basis, retaining their independent legal status while performing specific duties assigned within the scope of the project. This avoids the complex administrative burdens of company registration while ensuring the parties remain directly responsible for their own liabilities.

– Asset & revenue sharing: This model relies on mutual contributions – including capital, technology, land, or labor – to execute a specific commercial project. The parties establish specific ratios for distributing profits, revenues, or physical products, alongside a clear framework for allocating operational risks and financial losses. This provides high flexibility in how investors generate returns on their investment.

– Flexible investment term: The duration and termination of the partnership are strictly governed by the agreement, offering more flexibility than traditional company structures.

– Joint coordination: The project is typically overseen by a Joint Coordination Board, which manages day-to-day operations without needing a formal corporate board.

1.3. Contents of a business cooperation contract (BCC)

A standard BCC typically includes the following core sections:

–  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.

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2. Foreign investment via business cooperation contract (BCC) in Vietnam

Foreign investment via BCC in Vietnam: A strategic framework

2.1. The BCC investment process in Vietnam

– Partner selection & strategic alignment

This involves:

• Selecting suitable partners.
• Defining cooperation goals, covering business sectors, scope, duration, and expected returns.
• Conducting a critical assessment of the partner’s legal status, financial standing and reputation.

– Agreement on the scope and terms of cooperation

The parties negotiate and finalize key terms, including:

• Capital contributions: Forms of contribution (cash, assets, land use rights, technology,…).
• Profit & risk sharing: Mechanisms for distributing returns and allocating liabilities.
• Governance & operations: Rights, obligations, and management structures.
• Duration & termination: Contract terms and exit strategies.
• Dispute resolution: Frameworks for handling conflicts.

– Carrying out the procedures for obtaining the Investment Registration Certificate (IRC)

– Executing the business cooperation contract (BCC)

– Distributing profits and managing financial obligations

2.2. When should foreign investors opt for BCC investment?

Since every investment model carries its own advantages and constraints, choosing the right structure for a specific context is vital to maximizing business efficiency.

BCC investment is most effective in the following scenarios:

– Short-term or project-based ventures: BCC is the preferred structure when the partnership is designed for a specific, time-bound project rather than an ongoing business. Once the project goals are met, the contract naturally expires, allowing for a clean and straightforward dissolution without the complex liquidation procedures of a company.

– Investment in restricted business lines: BCC investment is the primary vehicle for entering sectors where foreign investors are subject to ownership limits or where establishing an FDI entity is not yet permitted.

– Market testing & asset optimization: a BCC serves as an ideal low-risk structure to evaluate market potential. It enables investors to combine capital and technology with a partner’s existing licenses and land, bypassing the overhead costs of a new legal entity.

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3. Key considerations for investment through a business cooperation contract (BCC) for foreign investors in Vietnam

Navigating the BCC in Vietnam: Key essentials for success

Below are essential notes on BCC investment for foreign investors:

– Satisfying the market access conditions applicable to foreign investors: these conditions include form of investment; scope of investment activities; capacity of investors,…as a prerequisite for entering sectors on the Negative List (List of Sectors and Trades with Restricted Market Access for Foreign Investors).

– Investment registration requirements: a BCC involving at least one foreign investor, or between multiple foreign investors, must undergo the procedures for an Investment Registration Certificate (IRC). (Clause 2, Article 22 of the Vietnamese Law on Investment 2025). 

– Governing and monitoring operations: the contracting parties shall establish a Joint Coordination Board to oversee and manage day-to-day operations of the BCC. The functions, duties, and authorities of the Board shall be determined by mutual agreement between the parties. (Clause 3, Article 22 of the Vietnamese Law on Investment 2025). 

– Managing tax and accounting risks: Since a BCC does not establish a separate legal entity, financial transparency remains a significant challenge for foreign investors. To prevent disputes and ensure regulatory compliance, the contract must explicitly designate the party responsible for tax declarations and payments. 

– Developing a strategic transition in BCC investments: If the BCC proves successful and partners seek a long-term commitment, transitioning to an FDI corporate entity is recommended. This shift provides the project with a formal legal personality, simplifies tax compliance, and creates a solid foundation for future expansion.

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4. Legal counsel at Hung Phi Law Firm – Comprehensive legal services regarding business cooperation contract (BCC) for foreign investors

Hung Phi Law Firm is a reputable law firm in Vietnam, specializing in foreign investment, corporate law, and taxation. We guide clients through the complexities of BCC contracts, leveraging our deep expertise to deliver strategic, risk-mitigating solutions. By safeguarding our clients’ interests and ensuring full compliance, we help foster sustainable growth and maximize the profitability of every collaborative venture. 

a. Initial advisory:

Providing legal advice regarding the following matters:

– Investment incentives and support;

– Market access conditions for foreign investors, foreign ownership limits, and conditional business sectors;

– Rights and obligations of the parties in BCC contracts;

– Capital contributions and asset management;

– Profit-sharing mechanisms and financial distribution models;

– Tax obligations and accounting frameworks for BCC projects.

b. Negotiating and drafting the business cooperation contract (BCC):

– Negotiating and drafting contract terms with Vietnamese and international partners to protect clients’ right;

– Reviewing contracts to identify unfavorable terms and legal risks for timely adjustment.

c. Licensing & compliance:

Handling all necessary procedures for investment incentives, national guidelines approval (if applicable), the Investment Registration Certificate (IRC) and subsequent amendments.

d. Dispute resolution:

Representing and assisting clients in negotiation, mediation, litigation, and arbitration.

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5. Frequently asked questions

5.1. I’m currently a US party to a BCC in Vietnam. Is it legally feasible to use our shared BCC profits as capital to incorporate a new company? 

Yes. According to Clause 4, Article 22 of the Vietnamese Law on Investment 2025, during the performance of the BCC, the contracting parties shall have the right to agree on using assets derived from their business cooperation to establish an enterprise in accordance with the Law on Enterprises.

5.2. What are ideal industries for BCC investment?

A Business Cooperation Contract (BCC) is an investment structure well suited for projects requiring the rapid combination of resources, particularly in sectors such as oil and gas, mining, real estate, infrastructure, and telecommunications, where the parties seek to share profits or products without establishing a new legal entity.

5.4. How should I prepare for a legal consultation?

You only need to provide a brief overview of your legal matter via phone, email, or our online form. After that, Hung Phi Law Firm will assign a specialist and contact you shortly to schedule a detailed consultation.

The above information outlines Foreign investment via business cooperation contract (BCC) in Vietnam, as provided by Hung Phi Law Firm to our clients.

Should you have any questions regarding this matter or require legal advice tailored to your specific case, please do not hesitate to contact the lawyers of Hung Phi Law Firm for timely support and professional consultation.

Contact Information:

Hung Phi Law Firm

Phone: (+84) 962 75 28 38

Email: luathungphi@gmail.com

Website: hungphi.vn

Sincerely,