Education is always a top focus in Vietnam. For this reason, Vietnam can secure the country’s firms’ quick and sustainable development by expanding and improving the quality of human resources with talented employees and high-level technical specialists. More and more private education firms with very high-quality training scales are opening. In this industry, international treaties to which Vietnam is a signatory and Vietnamese laws have policies to support and create conditions for foreign investors to establish an educational organization in Vietnam.
Legal basis in the field of education
On domestic law
In the Law on Education 2019 the State of Vietnam has strongly affirmed the importance of investment in education. The State promotes education investment, as well as encourages international organizations and people to invest in education and defends their legitimate rights and interests.
According to Decree No. 86/2018/ND-CP on foreign cooperation and investment in education (“Decree 86”) stated that foreign investors, whether individuals or organizations are permitted to invest in the education and training sector to provide educational services to Vietnamese nationals from (i) short-term training institutions; (ii) pre-school educational institutions; (iii) compulsory educational institutions (elementary schools, middle schools, high schools, universal schools); (iv) higher educational institutions; and lastly is (v) branch campuses of foreign-invested higher education institutions in Vietnam.
On International Treaty in the field of education
Vietnam has also participate in some International Treaty with commitment on the fied relating to educational. First of all, in Vietnam’s Schedule of Commitments in the WTO: Vietnam only commits in the fields of engineering, natural sciences and technology, business administration and business science, economics, accounting, international law and language training. The scope of activities conluding general education, higher education, and other educational services, as well as foreign language training
In the ASEAN Framework Agreement on Services – AFAS: Accordingly, Vietnam committed in the fields of engineering, natural sciences and technology, business administration and business sciences, economics, accounting, international law and language training. The scope of activities including primary education, general education, higher education, and other educational services, including foreign language training.
Given the foregoing, foreign investors technically can participate in Vietnam’s educational industry under Vietnamese law.
Conditions and form in establish an educational organization have foreign invested
According to Vietnam’s Investment Law, foreign investors are free to choose one of the following investment forms to do business in Vietnam:
(i) 100% foreign-owned enterprises;
(ii) joint venture; or
(ii) business cooperation contract (BCC).
The remaining investment forms, for example 100% foreign-owned enterprises and joint venture enterprises, are legal entities under Vietnamese law, with the exception that the BCC contract will not consider as a separate legal entity. In the case of two or more individual investors, the available options are (i) a limited liability company with two or more members; or (ii) a joint stock company (referred to as a joint stock company)
It must emphasize that investment in educational services under the Law on Investment of Vietnam have much more conditional on foreign investors than domestic investors. Due to the common sense that the quality of education should be kept on track to enhance the labor force of Vietnam. As well as be consistent with the living traditions of Vietnamese people. Therefore, investment projects of foreign investors in this field of education must meet a number of strict conditions and requirements as prescribed by Vietnamese law.
In addition, when establishing a foreign-invested educational institution, foreign investors need to ensure the conditions prescribed by Vietnamese law in Decree 86/2018/ND-CP on the conditions on investment capital, the facilities and equipment, the education program and last but not least the qualification of the teacher
Here are some stage of process foreign investor need to complete to establish an educational organization in Vietnam.
Stage 1: The process of issuance investment registration certificate connected with the business establishment
First, the investor submit the application file at the Investment Department – Department of Planning and Investment of the province or city directly under the Central Government. After receiving the application, the Department of Planning and Investment will collect opinions from specialized management agencies about the investment project and assesses the suitability of the project.
After issuing the decision on investment policy, the Department of Planning and Investment will issue an investment registration certificate to the enterprise. As long as the project is not subject to decision on investment policy, the Department of Planning and Investment will issue an investment registration certificate to the enterprise or refuse to grant it.
Investor after obtaining the investment certificate, the Foreign Investment Office will notify the Business Registration Office to issue an enterprise registration certificate to the investor. At the end of this phase, the results are: Decision on investment policy (if any); Investment registration certificate; and Certificate of business registration.
Stage 2: The process of gaining decision to establish educational organazation with foreign investment
After completing the procedure in stage 1, the investor submits an application at the Department of Education and Training where the investment project is located. Within 05 working days from the date of receipt of the valid application, the Department of Education and Training will check the validity, review and collect opinions from relevant agencies and units. In 10 working days from the date of receiving the written request for opinions from the application-receiving agency, the agency or unit in question must reply in writing.
Lastly, within 30 working days from the date of receipt of the application, the Department of Education and Training shall make an appraisal report then send it to the People’s Committee of the province for consideration and issuance of a decision on the establishment of a foreign-invested educational institution. If the Department of Education and Training not grant the application, they must respond in writing to the company within 5 working days of receiving comments.
Stage 3: The process of issuance of educational organization license of foreign investment
First of all, the investor sends the application for an educational operation license to the Department of Education and Training where the investment location is located. After that, within 20 working days, the Department of Education and Training shall coordinate with relevant agencies in appraising the satisfying conditions of the foreign educational institution as a basis for granting an educational operation license. Supposing the educational institution has not yet met the conditions for operation, within 05 working days from the date of receipt of the opinion of the competent authority, the application-receiving agency shall reply in writing to the investor, stating the reasons therefor.
Conclusion
Vietnam is a country with a large population of young people, traditionally studious and willing to invest money to study at high-quality educational institutions. Therefore, investing in the construction of educational institutions and implementing high-quality educational programs in Vietnam not only attracts Vietnamese students but also has the ability to attract students. regionally and internationally. So the opportunity and potential for investment in education in Vietnam is huge for foreign investors who want to make investments in Vietnam. So investors need to regularly update relevant laws and regulations, learn about local investment needs, and build and implement really quality projects.
Currently, on the market, there are many service providers related to foreign investment activities. With a team of professional, dedicated and experienced legal experts in the field of foreign investment, HMLF is confident to help business solve legal problems in the investment field.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: 0937215585
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