Investment Law · 16.10.2024

Establishment of a Representative Office under the BCC Contract

The establishment of a representative office under the BCC contract is widely described in English as a representative office. Vietnamese law calls it something else, and the difference decides what the office may actually do. What Article 37 allows a representative office under…

Lawyer UnilawReading time: 5 min

By Lawyer Luu Thi Hue – UniLaw LLC

The establishment of a representative office under the BCC contract is widely described in English as a representative office. Vietnamese law calls it something else, and the difference decides what the office may actually do.

What Article 37 allows a representative office under the BCC contract to do

The Investment Law 2025 names what English calls a representative office under the BCC contract a văn phòng điều hành, an operating office. Article 37(1) lets a foreign investor in a business cooperation contract set one up in Vietnam to perform that contract. Furthermore, the investor chooses the location according to what the contract requires.

Then comes the provision that matters most. Under Article 37(2) the operating office has its own seal, and it may open accounts, recruit staff, sign contracts and conduct business activities. Those powers run to the extent of the rights and obligations set out in the BCC contract and in the office’s own registration certificate.

Read that twice if you have previously set up a representative office here. This office may trade.

How a representative office under the BCC contract differs from an ordinary one

A representative office under the BCC contract is not the same animal as a representative office of a foreign trader. That second one sits under a different instrument altogether: Decree 07/2016/ND-CP, made under the Commercial Law. Article 30 of that decree confines such an office to liaison, market research and promotion. It may not carry on profit-making activity in its own name.

The contrast is therefore sharp on four points.

Trading — an operating office may sign and perform contracts within the BCC scope; a representative office may not trade at all.
Source of authority — the BCC contract and the registration certificate define the first; Vietnam’s treaty commitments and the decree define the second.
Term — a representative office licence runs five years under Article 9 of the decree; an operating office follows the life of the project.
Purpose — one performs a specific cooperation; the other merely watches the market.

Guides that describe the BCC office as unable to sell anything have simply copied the representative-office rule across. That error costs investors the very flexibility they signed the BCC to obtain.

When a business cooperation contract makes sense

Article 22 governs the contract itself. Between domestic investors, civil law applies and nothing more is needed. Between a domestic and a foreign investor, or between foreign investors, Article 22(2) requires an investment registration certificate under Article 26.

So the sequence is fixed. The certificate comes first, and the representative office under the BCC contract follows.

The structure suits projects where two parties want to share revenue from a defined activity without merging balance sheets. Telecommunications, energy, infrastructure and resource projects use it often. Moreover, it avoids the governance problems that sink joint venture companies, because there is no Members’ Council to deadlock.

The coordination board

Article 22(3) requires the parties to form a coordination board to carry out the contract. Its functions, duties and powers are whatever the parties agree.

That freedom is a gift and a trap. Nothing in the statute supplies a quorum, a casting vote or a deadlock mechanism, so the contract must supply them. Draft them, or discover later that neither party can make a decision alone.

Turning the cooperation into a company

Article 22(4) allows the parties, during performance, to agree to use the assets created by the cooperation to form a company under the Enterprise Law. Many BCC projects are written with that exit in mind from the start.

Where that is the plan, the BCC contract should say how the assets will be valued, who will hold what percentage, and what happens if one party declines to convert.

What the registration certificate must cover

Because Article 37(2) ties the office’s powers to its registration certificate as well as to the contract, that certificate is not a formality. Anything the office will need to do should appear in it.

Practical consequence: list the intended activities carefully at the application stage. An office that later needs to sign a category of contract outside its certificate must adjust the certificate first, and Article 37(3) leaves the adjustment procedure to the Government.

Keep the same discipline with the BCC contract. The office cannot exceed the rights and obligations the contract gives the investor, however broadly the certificate is drafted.

Where to file for a representative office under the BCC contract

The investment registration certificate for the BCC comes from the authority named in Article 27. Outside industrial zones, export processing zones, hi-tech parks and economic zones, that is the Department of Finance. Inside them, it is the zone management board. Older guidance naming the Department of Planning and Investment is out of date.

Article 37(3) then leaves the dossier, sequence and procedure for establishing, adjusting and terminating the operating office to Government regulation. Check the decree in force at the time of filing rather than relying on a timetable quoted in an article.

Ending the office

A representative office under the BCC contract ends when the cooperation it serves ends, and the same Article 37(3) governs that procedure.

Two obligations survive the closure in practice. Employees engaged by the office keep their rights under the Labour Code. And tax obligations, including personal income tax withheld from salaries, must be settled before the file will close.

Plan the wind-down at the drafting stage. A BCC that says nothing about who bears the closing costs leaves the parties arguing at the worst possible moment.

Legal basis

Investment Law, Law No. 143/2025/QH15, in force 1 March 2026 — Article 22 on the business cooperation contract and the coordination board, Article 26 on when an investment registration certificate is required, Article 27 on the issuing authority, and Article 37 on establishing, adjusting and terminating the operating office of a foreign investor under a BCC contract.
Decree No. 07/2016/ND-CP of 25 January 2016 — the separate regime for representative offices and branches of foreign traders, in particular Article 30 on permitted activity and Article 9 on the five-year licence.
Enterprise Law, Law No. 59/2020/QH14, as amended by Law No. 76/2025/QH15 of 17 June 2025 — where the parties convert the cooperation into a company.

Decided cases are published on case.unilaw.vn. Licensing sits with our Vietnam investment lawyers, company structures with our Vietnam corporate lawyers. See also our notes on the Vietnam representative office and the joint venture company in Vietnam.