Consulting and Drafting Investment Cooperation Contracts

Investment cooperation is that two or more parties agree and execute an agreement on contributing efforts, assets to implement a specific investment. This investment cooperation usually does not need to establish a new economic organization.

In the cooperation agreement, the parties need to clearly divide the responsibilities of each party, clarify the plan for dividing profits (and losses), as well as dividing assets after the end of the investment.

According to Clause 2, Article 504 of the 2015 Civil Code, the agreement content needs to be recorded in a specific document (investment cooperation contract) to ensure transparency, clarity, and avoid disputes in the future.z

Relevant legal documents

1. Commercial Law 2005
2. Investment Law 2014
3. Civil Code 2015 and specialized legal documents related to each investment content

Content of the contract

The investment cooperation contract will normally have these following contents:

1. Full information of the parties on the contract: full name of each party (and representative of the organization participating in the contract); contact information of parties such as address, phone number, fax, email, website, bank account infomation.
2. Information about the investment projects of the two parties, mainly including the following information:
   • Objectives and scope of business investment activities.
   • Location of investment project implementation.
   • Plan, progress, and deadline of the investment project.
   • Total investment value.
   • Contributions of the parties: real estate, variable property, raw materials, money, intangible assets (such as intellectual property rights), labor resources, other assets…
   • Roles and responsibilities of each party in the project.
   • Divide business investment results between parties (profit and loss).
   • Asset division after the end of the investment project.
3. Rights and responsibilities of the parties: the parties will have to contribute assets and effort to investment activities. So they could get the profits from the activities (if any), or endure losses. The parties will also have the right to participate in making desions relating to the implementation of the contract. If a member causes damage, he or she must compensate the other members in the contract. Regulations on the rights and responsibilities of the parties will mainly revolve around these problems.
4. Liability in breach of contract, dispute resolution methods.
5. Other agreements such as: cases of contract modification, transfer, termination…

Note: in case investment cooperation leads to the establishment of a new enterprise, this enterprise still operates according to the general provisions of the Enterprise Law. Members in the investment cooperation contract will have rights in the new enterprise according to the share value of each party (with reference to the agreement of the parties during investment cooperation).

If you have any questions related to investment cooperation contracts, please do not hesitate to contact An Luat Vietnam for support and advice.