Question:
Our company has many years of experience in the field of X and has established a certain brand in the market. We now wish to cooperate with a foreign partner to open a business establishment in the same field. However, as this is our first cooperation, we are concerned that the two parties may not yet fully understand each other’s working styles. Please advise which form of cooperation the company should choose to both achieve business objectives and minimize risks.
Answer:
In the context of a first-time cooperation where both parties still need time to assess compatibility, the company should consider the form of a Business Cooperation Contract (BCC) as prescribed in Clause 4, Article 21 of the Law on Investment 2020. This is an investment form with a clear legal basis, allowing the parties to cooperate in business and share profits without having to establish a new legal entity.
This form has a clear legal basis, regulated under the Law on Investment 2020, allowing the parties to freely agree on matters not contrary to the law under the provisions of the Law on Investment 2020 and the Civil Code 2015. This enables cooperation to be flexibly adjusted according to actual needs. Compared to establishing a new legal entity, a BCC saves considerable time and costs since there is no need to carry out procedures for company establishment, capital contribution, or obtaining multiple types of licenses. Under Decree No. 168/2025/NĐ-CP on enterprise registration, establishing a new company requires a complete application dossier and numerous administrative procedures, while Clause 1, Article 35 of the Law on Enterprises 2020 stipulates that investors must complete the transfer of ownership of contributed assets to the company. Therefore, in this case, the BCC proves to be superior. In addition, a BCC allows immediate utilization of the parties’ existing facilities, personnel, and brand, helping reduce marketing costs and shorten the time to market. The termination procedure is also simpler. Pursuant to Article 512 of the Civil Code 2015, a BCC can be terminated by agreement or upon achieving its objectives, avoiding complicated procedures such as enterprise dissolution. Notably, Clause 2, Article 28 of the Law on Investment 2020 allows the parties to use assets formed from BCC operations to establish an enterprise when the cooperative relationship has stabilized and there is a need for expansion.
Conclusion:
A BCC is a suitable and safe option for the initial cooperation stage with a foreign partner. This form enables the company to launch the project quickly, save costs and procedures, minimize risks if cooperation needs to be terminated, and still retain the possibility to convert to a corporate model when the partnership has been tested and strengthened.
