Vietnam’s education sector has been experiencing rapid growth and transformation, attracting significant interest from foreign investors and educational institutions. This comprehensive guide aims to provide a clear understanding of the regulations governing foreign-owned educational institutions in Vietnam, helping potential investors navigate the complex legal landscape.
For more detailed insights on investment opportunities, please refer to Vietnam Briefing – Education sector or For an in-depth look at the restrictions on foreign direct investment in Vietnam, check out this detailed guide by HMLF: FDI Restrictions in Vietnam.
1. Introduction
Vietnam’s education sector has been evolving rapidly, with the government recognizing the importance of international collaboration and foreign investment in enhancing the quality of education. The country’s young population and increasing demand for quality education have created numerous opportunities for foreign educational institutions.
However, entering the Vietnamese education market requires a thorough understanding of the regulatory framework. This guide will walk you through the key aspects of establishing and operating a foreign-owned educational institution in Vietnam.
2. Legal Framework
The primary laws and regulations governing foreign educational institutions in Vietnam include:
- Education Law (2019)
- Law on Investment (2020)
- Decree No. 86/2018/ND-CP on foreign cooperation and investment in education
- Circular No. 21/2018/TT-BGDDT on the management of foreign-invested educational institutions
On October 5, 2024, the government issued Decree 124/2024/ND-CP, which amends and supplements certain provisions of Decree 86/2018/ND-CP regarding foreign cooperation and investment in the education sector. A key change is the modification of Article 6, which specifies the eligibility criteria for educational partnerships. On the Vietnamese side, private kindergartens and general education institutions established by domestic investors must meet operational conditions. On the foreign side, institutions must be legally established and operating for at least five years, with no legal violations, and must provide direct teaching along with valid quality accreditation. Organizations offering educational programs must also have been operational for a minimum of five years before applying for educational partnerships. Decree 124/2024/ND-CP will take effect on November 20, 2024
Recent changes in regulations have aimed to streamline the process for foreign investors and create a more favorable environment for international educational institutions. It’s crucial to stay updated on these changes as they can significantly impact your operations.
3. Licensing Requirements
Obtaining the necessary licenses is a critical step in establishing a foreign-owned educational institution in Vietnam. According to Article 42 on the establishment approval process of Decree No. 86/2018/ND-CP, The process typically involves the following steps:
- Submit an investment registration certificate application to the Department of Planning and Investment
- Obtain approval from the Ministry of Education and Training
- Apply for an establishment license from the relevant authority (varies depending on the type of institution)
- Register for operation with the local Department of Education and Training
Required documentation (Article 41 of this decree), usually includes:
- Detailed project proposal
- Financial capacity proof
- Curriculum and teaching plans
- Qualifications of teaching staff
- Infrastructure plans
4. Operational Regulations
Once established, foreign-owned educational institutions must adhere to various operational regulations (According to Section 3,4 Decree No. 86/2018/ND-CP regulates foreign cooperation and investment in the education sector)
Curriculum and Teaching Standards
While foreign institutions can use international curricula, they must also incorporate certain Vietnamese subjects and meet national education standards. The specific requirements vary depending on the level of education offered.
Staff and Faculty Requirements
There are specific qualifications required for teaching and administrative staff. A certain percentage of Vietnamese staff may be required, depending on the type of institution.
Financial Regulations
Foreign-owned institutions must comply with Vietnamese accounting standards and undergo annual audits. There are also regulations regarding tuition fees and financial transparency.
5. Ownership and Investment Restrictions
Foreign ownership in the education sector is generally unrestricted, allowing 100% foreign-owned institutions. However, there are minimum investment capital requirements, which vary depending on the type and scale of the institution (Section 3: Conditions for Establishing Foreign-Invested Educational Institutions Decree No. 86/2018/ND-CP regulates foreign cooperation and investment in the education sector)
6. Compliance and Reporting
Foreign-owned educational institutions are subject to regular inspections and must submit annual reports to relevant authorities. These reports typically cover academic performance, financial status, and compliance with regulations.
Quality assurance measures are also mandatory, often requiring institutions to undergo periodic evaluations and accreditations.
7. Challenges and Opportunities
While the Vietnamese education market offers significant opportunities, foreign institutions may face challenges such as:
- Complex and sometimes ambiguous regulations
- Cultural and language barriers
- Competition from both local and other international institutions
However, the opportunities are substantial:
- Growing demand for international-standard education
- Government support for educational development
- Potential for partnerships with local institutions
8. Conclusion
The future outlook for foreign-owned educational institutions in Vietnam remains positive, with the government continuing to encourage foreign investment in the sector. However, success in this market requires careful navigation of the regulatory landscape, cultural sensitivity, and a long-term commitment to quality education.
Key takeaways for potential investors:
- Thoroughly research and understand the legal framework before entering the market
- Engage with local partners or consultants to navigate cultural and regulatory challenges
- Stay updated on regulatory changes and be prepared to adapt
- Focus on maintaining high educational standards to ensure long-term success
As Vietnam continues to develop its education sector, foreign-owned institutions have a unique opportunity to contribute to and benefit from this growth. By carefully navigating the regulatory environment and focusing on quality, these institutions can play a significant role in shaping Vietnam’s educational landscape.
Remember: While this guide provides a comprehensive overview, regulations can change, and specific situations may require different approaches. Always consult with HARLEY MILLER LAW FIRM “HMLF”, your legal experts, and relevant authorities for the most up-to-date and applicable information for your specific educational project in Vietnam.
Address: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone: +84 937215585
Website: hmlf.vn
Email: miller@hmlf.vn
