The contractual investment option is one of the forms of direct investment. The investor directly conducts business activities following the content agreed in the contract.
Concluding investment contracts along with the conclusion and performance of contracts must comply with the Law on Investment (2020) and the general provisions on business and commercial contracts.
The contractual investment includes the following forms:
1. Business Cooperation Contract (BCC)
BCC contract is a form of investment signed between investors to cooperate in business to divide profits and products without establishing a legal entity. For business cooperation contracts, the important point is the agreement on profit sharing and product division.
Business cooperation contracts between foreign investors and domestic investors as well as business cooperation between domestic investors must have their rights, responsibilities, and distribution of results for each party regulated. For contracts arising in the course of cooperation without making profit distribution, they will not be considered business cooperation contracts.
2. Public Private Partnership investment (PPP)
PPP is an investment method made on the basis of limited-term cooperation between the State and private investors through the signing and implementation of PPP project contracts to attract private investors to participate in PPP projects.
PPP project contract means a written agreement between a contracting agency and an investor and a PPP project enterprise on the State’s concession to an investor or PPP project enterprise to implement a PPP project in accordance with this Law, including the following types of contracts:
2.1 Build – Operate – Transfer (BOT) contract
BOT contract is a contract in which an investor, PPP project enterprise is franchised to build, trade and operate works and infrastructure systems within a certain period of time; at the end of the term, investors and enterprises of PPP projects transfer such works and infrastructure systems to the State.
2.2 Build – Transfer – Operate (BTO) contract
BTO contract is a contract in which investors and PPP project enterprises are franchised to build infrastructure works and systems; after completing the construction, investors and PPP project enterprises shall transfer works and infrastructure systems to the State and be entitled to do business and operate such works and infrastructure systems within a certain time limit.
2.3 Build – Own – Operate (BOO) contract
BOO contract is a contract in which investors and PPP project enterprises are franchised to build, own, trade and operate works and infrastructure systems within a certain period of time; expiry of term, investor, PPP project enterprise terminates the contract.
2.4 Operate – Manage (O&M) contract
O&M contract is a contract in which the investor, PPP project enterprise is franchised to trade and manage part or all of the available infrastructure works and systems within a certain period of time; expiry of term, investor, PPP project enterprise terminates the contract.
2.5 Build – Transfer – Lease (BTL) contact
BTLs are contracts that investors and PPP project enterprises are franchised to build works and infrastructure systems and transfer to the State after completion; be entitled to provide public products and services on the basis of operation and exploitation of such works and infrastructure systems within a certain time limit; agencies that sign service lease contracts and make payments to investors and PPP project enterprises.
2.6 Build – Lease – Transfer (BLT) contract
BLT is a contract in which an investor or PPP project enterprise is franchised to build works, infrastructure systems and provide public products and services on the basis of operation and exploitation of such works and infrastructure systems within a certain period of time; agencies that sign service lease contracts and make payments to investors and PPP project enterprises; at the end of the term, investors and PPP project enterprises transfer such works and infrastructure systems to the State.
2.7 Mixed contracts
A mixed contract, it combines the above-mentioned contract types.
