BCC and PPP both look like ‘cooperation without necessarily incorporating a company right away’ to many investors, and that surface similarity causes expensive confusions. The root difference fits in one sentence: in PPP, one signatory is the State and the project must be born through the State’s approval and investor selection procedures; in a BCC, every signatory is an investor and the contract is born of their own free agreement. From that root, the entire process, implementing subject and risk sharing of the two models branch in different directions.
Five core differences between BCC and PPP
First, the signatory: a PPP project contract is signed between the investor (or the project enterprise) and a competent agency representing the State; a BCC comprises only investors, even where one investor is an SOE acting as an ordinary investor. Second, the fields: PPP is confined to the public-private partnership investment fields prescribed by the Law on PPP 64/2020/QH14 — transport, energy, irrigation, clean water, health, education and other listed infrastructure and public service fields; a BCC has no field catalogue of its own and applies to any lawful business the parties wish to pursue together. Third, formation: a PPP project must receive investment policy approval, a feasibility study and competitive investor selection — an investor cannot simply pick a PPP project for itself; a BCC forms by direct negotiation between parties that have chosen each other. Fourth, the implementing subject: PPP obliges the selected investor to establish a project enterprise to sign and perform the contract; a BCC creates no entity, and the parties perform in their own capacities through a coordination board and executive offices. Fifth, transfer and term: PPP contracts carry a duty to transfer the works to the State at the end (for BOT, BTO, BT types) and long terms tied to infrastructure capital recovery; a BCC ends in liquidation among the parties, with no transfer to the State unless the parties themselves agree to sell assets onward.
When to choose a BCC, and when PPP is compulsory
The first screening question is the project’s nature: does it provide infrastructure or a public service, use public land, public assets or state capital, and have a state agency as offtaker, guarantor of purchase or recipient of transfer. Three ‘yes’ answers place the project in PPP territory compulsorily — there is no BCC option for an urban wastewater plant with a people’s committee offtake commitment, however much the private parties wish to cooperate among themselves; the private investors’ arrangements with each other inside a PPP project (a bidding consortium, a shareholders’ agreement in the project enterprise) are accompanying internal relations that do not replace the PPP project contract with the state agency. Conversely, where the project is purely commercial — a manufacturing plant, a service chain, distribution, market exploration — with private counterparties and no state commitment, the BCC is the far lighter and faster model, with no PPP policy approval or investor selection bidding. Two errors must be avoided on both sides: dressing a public infrastructure project in a BCC shell to dodge PPP discipline, facing inspection and contract invalidity; and dragging an ordinary commercial cooperation into an unnecessary PPP process, losing years to procedures the project never required. The practical boundary sometimes sits in mixed projects — infrastructure inside an industrial park serving a group of enterprises: where the end users are private and no state commitment exists, a BCC structure or an ordinary infrastructure enterprise remains the right answer.
Frequently asked questions
1. What is the core difference between BCC and PPP?
The signatory and the formation: PPP is a contract between an investor and a state agency, born through policy approval and competitive investor selection in infrastructure and public service fields under the Law on PPP 64/2020. A BCC is a contract among investors, formed by free negotiation, creating no entity and limited to no field catalogue.
2. When should a BCC be chosen, and when PPP?
A project providing infrastructure or public services, using public assets, or carrying a state offtake or transfer commitment must follow PPP. A purely commercial project with private partners and no state commitment should choose the BCC for lightness and speed.
3. If the partner is the State, which model applies?
If the partner is a state agency as signatory of a project contract, it is PPP. If the partner is an SOE acting as an ordinary commercial investor — contributing assets or capital to a business cooperation — it can still be a BCC, with the added approval layer and state asset valuation.
4. Does PPP require a project company?
Yes. Under the Law on PPP, the selected investor must establish a project enterprise to sign and perform the PPP project contract. This is a structural difference from a BCC, where the parties perform directly in their own capacities without creating a new entity.
5. Can two private investors cooperate inside a PPP project through a BCC?
Yes, at the internal layer: a bidding consortium and the investors’ arrangements within the project enterprise are their own relations, which can take cooperation-contract form. But the relationship with the State must still be a PPP project contract — the internal layer neither replaces nor alters the project’s PPP discipline.
Key takeaways for investors
- Root difference: PPP has the State as signatory and is born through competitive selection; a BCC has only investors and is born of agreement.
- PPP is confined to infrastructure and public services and requires a project enterprise; a BCC is open to any lawful field.
- Public assets, a state offtake or a works transfer leave no BCC option.
- Do not dodge PPP discipline with a BCC shell — and do not drag ordinary commerce into a needless PPP process.
This article has been quality-reviewed by the FLAW AI Legal Council