Executive Offices for Business Cooperation Contracts (BCC) in Vietnam

When signing and implementing a business cooperation contract, foreign investors can establish an executive office in Vietnam to serve the contract implementation process. So, what are the procedures for establishing an executive office for Executive offices for business cooperation contracts (BCC) in Vietnam? In the following article, Viet An Law will provide information on this issue according to legal regulations.

What is the executive office for a business cooperation contract?

According to Clause 13, Article 3 of the Investment Law 2020, the Business Cooperation Contract (hereinafter referred to as BCC contract) is a contract signed between investors to cooperate in business, share profits, and share products by the provisions of law without establishing an economic organization.

Thus, the executive office for a business cooperation contract is an office established by a foreign investor to execute the contract, accordingly, the location of the executive office is decided by the foreign investor in the BCC contract according to the requirements for executing the contract.

Rights and obligations when establishing an executive office

According to Clause 1, 2, Article 49 of the Investment Law 2020, foreign investors in a BCC contract in Vietnam, when registering to establish an executive office, have the following rights and obligations:

• Foreign investors in a BCC contract are allowed to establish an executive office in Vietnam to perform the contract. The location of the executive office is decided by the foreign investor in the BCC contract according to the requirements of the contract performance.
• Own and use a seal;
• Open an account;
• Recruit employees and sign labor contracts;
• Other rights and obligations are agreed upon between the parties in the business cooperation contract and the Certificate of registration to establish an executive office.

Procedures for establishing Executive offices for business cooperation contracts (BCC) in Vietnam

Procedures for establishing an executive office for a BCC contract for foreign investors are stipulated in Article 49 of the Investment Law 2020. Specifically:

Current application form for establishing a BCC contract executive office: Form A.I.8 Issued with Circular No. 03/2021/TT-BKHĐT.

Place to apply: Department of Planning and Investment, where the executive office is expected to be located.

Implementation method: Submit directly to the competent authority or send via postal service.

Note: When submitting the application and receiving the results, the applicant must bring the following documents:

• Receipt of application and appointment for the result;
• Identity card or other personal identification documents.
• In case the investor or enterprise authorizes another organization or individual to submit the application and receive the result, the person completing the procedure must present the ID card or passport or other legal personal identification documents and one of the following documents: (i) Service provision contract with the organization providing the service of submitting application and receiving results and the letter of introduction from that organization to the individual submitting the application and receiving the result; (ii) Power of Attorney for Viet An Law to submit the application and receive the result by the provisions of law.

When does the BCC project management office cease to operate?

When the project in the BCC contract is completed, the management office no longer has a purpose to operate. At that time, the foreign investor’s management office must cease to operate.

Accordingly, according to Clause 1, Article 50 of the Investment Law 2020, from the date of the decision to terminate the management office, within 7 working days, the foreign investor must send a notification dossier to the investment registration agency where the management office is located.

The dossier notifying the termination of the management office is prepared according to Clause 2, Article 50 of the Investment Law 2020 and is carried out according to the following procedures:

The dossier for terminating the operation of the executive office includes:

• Decision to terminate the operation of the executive office (if terminating before the deadline);
• List of creditors and paid debts;
• List of employees and settled benefits;
• Confirmation from the tax authority on tax obligations;
• Confirmation from the social insurance agency on social insurance obligations;
• Confirmation from the police agency on the cancellation of the seal;
• Certificate of registration of the operation of the executive office;
• Copy of the investment registration certificate;
• Copy of the BCC contract.

Please contact Viet An Law for the most detailed advice.

Is a foreign investor in a BCC contract required to establish an executive office to execute the contract?

According to Clause 1, Article 49 of the Investment Law 2020 on the establishment of an executive office of a foreign investor in a BCC contract, specifically:

”A foreign investor in a BCC contract is allowed to establish an executive office in Vietnam to execute the contract. The location of the executive office is decided by the foreign investor in the BCC contract according to the requirements for executing the contract.”

Thus, according to the above regulations, the establishment of an executive office is not mandatory. However, the establishment of an executive office helps investors easily manage the project’s financial resources, clearly distinguishing project activities from the activities of the investor’s company and employees.

In case there is a decision to terminate the operation of the executive office, but the notification dossier is not sent?

According to Point c, Clause 2, Article 15 of Decree 122/2021/ND-CP, the fine is from VND 30.000.000 to VND 50.000.000 for the act of:

Not sending a notification dossier to the investment registration agency where the executive office is located within 07 working days from the date of the decision to terminate the operation of the executive office of the foreign investor in the BCC contract;

Thus, when there is a decision to terminate the operation of the executive office, but the notification dossier is not sent, the investor will be subject to the above administrative penalty.

Above is all the information about executive offices for Business Cooperation Contracts (BCC) in Vietnam. If clients have any related questions or need legal support about the executive office, please contact Viet An Law for the best support!