Conditions for establishing an education business company in Vietnam

Education has always been considered as one of the most important sectors that the State pays special attention to and is facilitated. However, to establish a business company, what conditions do you need to meet? In the article below, Viet An Law will provide specific guidance on conditions for establishing  an education business  company.

Legal bases:

• Vietnam’s commitments in the WTO;
• Enterprise Law 2020;
• Education Law 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 No. 143/2016/ND-CP of the Government: Regulations on conditions for investment and operation in the field of vocational education

What does education business mean?

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

It is not only a business but also a means to develop better education, help meet the increasing learning needs, improve the capacity of each person, thereby, improve the quality of labor resources. Therefore, at present, the type of education business is very encouraged by the State and issued many policies to support development.

Forms of education business

Currently, there are quite a few different forms of education business applied. However, the most typical and common are:

• Early childhood education includes kindergarten and kindergarten education;
• General education includes primary education, lower secondary education and upper secondary education;
• Vocational education provides training at beginner, intermediate, college and other vocational training programs;
• Higher education offers undergraduate, master’s and doctoral degrees.

Conditions for establishing an education business company in Vietnam

Market access conditions for foreign investors

According to Section 5 of Vietnam’s Schedule of commitments in the WTO stipulating education services, it can be seen that when Vietnam joins the WTO, it only commits to the fields of engineering, natural sciences and technology, business administration and business sciences, economics, etc  accounting, international law and language training.

For Higher Education sub-sectors; Education for adults; 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 education business company, Vietnam’s commitments are as follows:

• Not committed to secondary education services (CPC 922)
• To date, there are no restrictions on Higher Education services (CPC 923); Education for adults (CPC 924) and other educational services (CPC 929 includes foreign language training).

According to the provisions of Decree 86/2018/ND-CP, besides 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, teachers, etc  educational programs, certificates, the admission of students.

Conditions on investment capital

The education profession does not require legal capital when setting up a company. However, if the educational company establishes vocational education institutions, it must meet the conditions for legal capital.

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 lawful capital, excluding land value, specifically as follows:

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

Company name conditions

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

There are 2 components: Type of company + Proper name.

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

Head office address

The head office of the educational company must meet the following conditions:

• The head office address must be located within the territory of Vietnam, clearly identified: house number, niche, alley, alley, street, street or village, hamlet, commune, ward, town, district, district, town, city of the province, province or centrally-run city; phone number, email (if any).
• Not condominiums, dormitories and places where business is restricted.
• Enterprises should choose suitable locations such as office buildings, home addresses to register as company addresses and must have full documents proving the legal use rights of the business such as office lease contracts, lease / loan contracts.

Business lines requirements

The professions of education and training are all conditional professions. Enterprises registering any business lines in the following education business lines group must fully meet the conditions of that business such as: conditions on capital, practice certificates, sublicenses …

For example: If you want to set up a company for preschool education, you can register two business lines, 8511 – Kindergarten education and 8512 – Kindergarten education, and must meet the following conditions:

• There are schemes for the establishment of kindergartens, preschools and kindergartens approved by state management agencies.
• There is a decision on establishment or permission for the establishment of the Chairman of the district-level People’s Committee.
• Having land, schools, facilities and equipment to meet the requirements, maintain and develop educational activities.
• Having a team of teachers who meet the standard level as prescribed…

The legal representative of the company

The legal representative of the company needs to meet the following conditions:

• As an individual, be it Vietnamese or foreigner.
• From full 18 years old, have full capacity for civil acts.
• Not prohibited from managing and establishing enterprises specified in Clause Article 17 of the Enterprise Law 2020.
• It is not required to be a capital contributor in the company.

Registration process for establishing an education business company in Vietnam

Step 1: Prepare company establishment documents

The establishment dossier includes:

• Application form for business establishment
• Draft company charter
• List of members of limited liability companies with two or more members, list of shareholders for joint-stock companies.
• A valid copy of the personal certificate.

For organizations: Certificate of business registration for organizations and enclosed with personal identification documents of the authorized representative of the organization;

• Decision on capital contribution, Written appointment of an authorized representative for company members and company shareholders being organizations.

Legal service contract (Authorization contract) to authorize  Viet An Law Firm to perform business establishment services  (In case customers use services of Viet An Law)

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

For the business lines of the education company, customers can refer to some of the following business line codes:

Step 2: Submit the application for the Certificate of Business Registration

After preparing all documents at Step 1, Viet An Law Firm proceeds to submit the application for the Certificate of Business Registration through 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 a company tax code, Viet An Law will proceed to engrave the seal for the enterprise;

Duration: 01 day.

Step 4: Publish the seal sample

After having a seal for the seal to take effect and be used, it is necessary to carry out procedures for announcing the company’s seal sample on the National Business Registration Portal;

Establishing a business is a necessary condition. However, in order for the company to fully carry out procedures and go into stable operation, the company needs to carry out additional procedures after establishment.

If you need advice on the conditions for establishing an education business company, please contact Viet An Law Firm for the best support.