A business cooperation contract (BCC) is a flexible way for a foreign investor to start in Vietnam without creating a new legal entity. But as operations grow, the parties often want to “graduate” to a company: an independent legal personality, easier borrowing, and more transparent governance and profit sharing. The legal question is whether moving from a BCC to a company is handled by amending the Investment Registration Certificate (IRC) or by issuing a new one — and what happens to assets, contracts and obligations that arose under the BCC.
The legal nature: why this is no ordinary IRC amendment
Under the Law on Investment No. 143/2025/QH15, investment under a BCC and investment by establishing an economic organization are fundamentally different forms: a BCC creates no new legal entity — the contract parties jointly implement the project and share results by agreement — while a company is an independent legal person with its own assets, liable with those assets under the Law on Enterprises No. 59/2020/QH14. The IRC issued for a BCC project records the contract parties as the project implementers; when implementation shifts to a newly established company, the change is no longer “amending” a few lines on the certificate but replacing the project’s subject and form. In procedural practice, the route therefore usually combines two parallel tasks: issuing an IRC for the project as implemented by the new company (through an issuance or amendment procedure tied to the investment-form conversion under Decree No. 96/2026/ND-CP, as guided by the registration authority at filing time), and winding up the old BCC relationship in an orderly manner.
A safe conversion sequence
Five steps in dependency order
- The BCC parties negotiate and sign a conversion agreement: the conversion date, the value of assets contributed into the company, each party’s capital ratio in the new company, and principles for succeeding to contracts and obligations.
- Establish the new company and carry out the investment procedure for the project in the form of an economic organization, working in advance with the investment registration authority on how the BCC project’s IRC will be treated.
- Transfer the BCC project’s assets to the company: inventory minutes, valuation, and handover of assets, land use rights or location leases, equipment and inventory.
- Deal with contracts in progress: tripartite agreements or annexes transferring rights and obligations from the BCC parties to the company, with the consent of partners, customers and banks.
- Liquidate the BCC relationship: tax finalisation for the BCC phase, distribution of remaining results under the contract, notice of BCC termination, and completion of reporting duties to the investment registration authority.
How do assets, rights and obligations move into the company?
Unlike an enterprise merger — where the law provides automatic succession — moving from a BCC to a company has no automatic transfer mechanism. Assets owned jointly by the BCC parties, or held in one party’s name for the project, pass to the company only under a valid transfer document and, for registrable assets such as land use rights, vehicles and intellectual property, only after the ownership-transfer registration is completed. Debts and obligations of the BCC project — bank loans, supplier payables, unfinalised tax — remain with the BCC parties as agreed in the BCC contract until a transfer agreement is accepted by the creditors; the new company is liable only for obligations validly transferred to it. Employees working for the BCC project must be handled by termination and fresh labour contracts with the company, or a labour transfer agreement, preserving seniority and social insurance continuity.
Risks of a half-done conversion
Not a few cases end with the new company established and operating while the old BCC is unliquidated, assets untransferred and legacy contracts unassigned — two parallel subjects both claiming to be the project owner. The practical fallout: banks do not know whom to lend to, tax authorities do not know whom to finalise, and in a dispute, identifying the liable party becomes chaotic. An un-terminated BCC project also keeps generating reporting duties and may be assessed by the registration authority as unimplemented or delayed.
In short, moving from a BCC to a company is a full “form replacement”, not a one-line IRC amendment: agree the conversion first, establish the company and settle the IRC with the registration authority in parallel, transfer assets and contracts in writing, then liquidate the BCC completely. Done fully, the conversion preserves project continuity and leaves no legal grey zone behind.
Tax and accounting continuity across the conversion
The conversion’s least visible risks sit in tax and accounting, because a BCC and a company are taxed and booked through entirely different mechanics. The BCC phase must be closed with a finalisation that matches the contract’s profit-sharing arrangement, and the allocation of the BCC’s final results among the parties should be documented before assets move, so the company’s opening balance sheet starts from agreed numbers rather than contested ones. Assets contributed into the company need a valuation basis that both the parties and the tax authority can follow: the same asset may carry a book value from the BCC’s records, an agreed contribution value in the conversion agreement, and a deductible depreciation basis in the company, and confusing those three numbers invites adjustment later. Invoices, input value-added tax credits and loss positions from the BCC phase do not migrate automatically into the company; each item must be examined and dealt with expressly. The labour transfer deserves the same care, since seniority carried into the new contracts affects severance obligations the company will bear. Investors who run a closing checklist across tax, accounting, assets, contracts and labour — and who keep the BCC’s books accessible after termination for the statutory retention period — find that the conversion’s second year is as quiet as its first month was busy.
Frequently Asked Questions
How is the IRC handled when a BCC becomes a company?
This changes the project’s subject and investment form, so it is not an ordinary amendment. Practice combines issuing or amending the IRC for the project as implemented by the new company, as guided by the registration authority, with an orderly liquidation of the old BCC under Decree 96/2026/ND-CP and Law on Investment 143/2025/QH15.
Is a new IRC required, or just an amendment?
It depends on the registration authority’s guidance at filing time, but in substance the project is re-recorded under the new company as implementer. Investors should agree the route with the issuing authority in advance rather than assuming a few content amendments suffice.
How do assets and obligations transfer from the BCC to the company?
There is no automatic succession as in an enterprise merger. Assets transfer by written documents, with ownership registration for registrable assets; debts move only under transfer agreements accepted by creditors; employees are handled by termination and new contracts or a transfer agreement.
