Setting a business in Vietnam for educational trading

Education is always considered one of the most important sectors that receives special attention from the State and is given many favorable conditions. However, to establish a business company, what conditions must be met? In the article below, Viet An Law will provide specific instructions on the conditions for setting a business in Vietnam for educational trading.

Legal basis

• Vietnam’s schedule of commitments in the WTO;
• Law on Enterprise 2020;
• Law on Education 2019;
• Decree 01/2021/ND-CP on business registration.
• Decree 86/2018/ND-CP on foreign cooperation and investment in the field of education.
• Decree 143/2016/ND-CP regulating investment and operating conditions in the field of vocational education.

What is educational business?

An educational business is a type of business that uses private investment capital to provide services related to educational purposes.

An educational company is not simply a business, but also a means to develop better education and improve each person’s capacity, thereby improving the quality of the labor source. This is the reason why currently this type of educational business is being encouraged by the state and many policies have been issued to support development.

Forms of educational business

Currently, there are many different forms of educational business being applied. However, the most typical and popular are:

• Preschool education includes kindergarten education and kindergarten education;
• General education includes primary education, lower secondary education, and high school education;
• Vocational education training at the primary level, intermediate level, college level, and other vocational training programs;
• Higher education offers undergraduate, master’s, and doctoral degrees.

Conditions for setting a business in Vietnam for educational trading

Market access conditions for foreign investors

Based on section 5 of Vietnam’s Schedule of Commitments in the WTO regulating educational services, it can be seen that when Vietnam joined the WTO, it only committed to the fields of engineering, natural science and technology, business administration and business sciences, economics, accounting, international law, and language training.

For higher Education sub-sectors; Adult education; For other educational services, the training program must be approved by the Ministry of Education and Training of Vietnam.

With the method of establishing an educational business company, Vietnam’s commitments are as follows:

• Uncommitted for basic general education services (CPC 922)
• Up to now, there are no restrictions on Higher Education services (CPC 923); Adult education (CPC 924), and other educational services (CPC 929 includes foreign language training).

According to the provisions of Decree 86/2018/ND-CP, in addition to meeting the same conditions as domestic investors, foreign investors who want to establish education in Vietnam must fully meet conditions such as facilities, investment capital, teaching staff, educational programs, certificates, and student admission.

Conditions for investment capital

The education industry does not require legal capital when establishing a company. However, if an education company establishes vocational education institutions, it must meet legal capital conditions.

For example, according to the provisions of Clause 4, Article 3 of Decree 143/2016/ND-CP, the investment level (charter capital) when establishing a vocational education institution is invested with legal capital, excluding land value, specifically as follows:

• For vocational education centers, the minimum is 5 billion VND.
• For intermediate schools, the minimum is 50 billion VND.
• For colleges, the minimum is 100 billion VND.

Company name condition

Pursuant to the provisions of Articles 37, 38, and 39 of the Law on Enterprises, the name of the education company must meet the following conditions:

There are 2 elements: Company type + name.

• Do not overlap or confuse with previously registered companies.
• Do not use words or characters that lack culture or violate customs and traditions to name the company.
• Do not use the names of the armed forces, state management agencies, or socio-political organizations to name the company.

Head office address

The headquarters of an education company must meet the following conditions:

• Head office address must be located within the territory of Vietnam, clearly identified as house number, corner, alley, alley, street, road or village, hamlet, hamlet, commune, ward, town, district, district, town communes, provincial cities, provinces, and centrally run cities; Phone number, email (if any).
• Not apartment buildings, collective apartments, and places with restricted business.
• Enterprises should choose suitable locations such as office buildings or private home addresses to register as company addresses and must have full documents proving the legal use rights of the enterprise such as lease contracts. office, house rental/borrowing contract.

Industry code conditions

Education and training professions are all conditional professions. Enterprises registering any industry code in the education industry group below must fully meet the conditions of that industry such as capital conditions, practice certificates, and sub-licenses…

For example: If you want to establish a company in preschool education, you can register two industry codes: 8511 – Kindergarten education and 8512 – Kindergarten education, and must meet the following conditions:

• Have a project to establish a kindergarten, preschool, or kindergarten approved by the state management agency.
• There is a decision to establish or authorize the establishment of the Chairman of the District People’s Committee.
• Have land, school buildings, facilities, and equipment that meet requirements, maintain and develop educational activities.
• There is a team of teachers who meet standard qualifications according to regulations.

Legal representative of the company

The legal representative of the company must meet the following conditions:

• An individual can be Vietnamese or foreign.
• Be 18 years old and have full civil capacity.
• Not subject to the ban on managing and establishing enterprises as prescribed in Article 17 of the Enterprise Law 2020.
• Not required to be a capital contributor to the company.

Registration process for setting a business in Vietnam for educational trading

Step 1: Prepare documents to establish a company

Establishment dossier include:

• Application for establishment of a business;
• Draft of company charter;
• List of members of limited liability companies with two or more members, list of shareholders for joint stock companies;
• Valid copy of personal identification card. For organizations: Enterprise registration certificate for organizations and attached personal identification documents of the authorized representative of the organization;
• Contract to provide legal services (Power of Attorney) to authorize Viet An Law Firm to perform business establishment services (in case you use Viet An Law’s services).
• Decision on capital contribution, Document on the appointment of an authorized representative for company members, and company shareholders who are organizations.

Immediately after receiving enough information and consulting on issues related to the company name, company headquarters, the company’s expected business lines, information about the company’s members and founding shareholders, Company charter capital, and information of the company’s legal representative. Based on the information provided by clients, Viet An Law Firm prepares company establishment documents to transfer to clients within 01 working day.

Regarding the business lines of educational companies, clients can refer to some of the following business lines:

Step 2: Apply for Enterprise Registration Certificate

After fully preparing the documents in Step 1, Viet An Law Firm applies to an Enterprise Registration Certificate via the National Business Registration Portal.

Completion time: 03 – 05 working days.

Step 3: Engrave the company seal

As soon as there is an Enterprise registration certificate and also the company tax code, Viet An Law will engrave the seal for the business;

Implementation time: 01 day.

Establishing a business is a necessary condition. However for the company to have complete procedures and operate stably, the company needs to carry out additional procedures after establishment.

Clients who need advice on the conditions for setting a business in Vietnam for educational trading, please contact Viet An Law Firm for the best support.