Set up an education company/institution company in Vietnam

A developed education not only helps improve the level of knowledge but also serves as a source of motivation to help the country stand shoulder to shoulder with the powers of five continents. More and more educational exchanges between countries on education are also in that trend. The establishment of educational institutions is one of the typical manifestations. In the following article, Viet An Law will summarize regulations on conditions for establishment of foreign-invested general education institutions.

Legal basis

• WTO, CPTPP;
• Investment Law 2020;
• Enterprise Law 2020;
• Decree 86/2018/ND-CP on foreign cooperation and investment in the field of education;
• Circular 47/2019/TT-BCT stipulates the collection rate, regime of collection, payment, management and use of fees for providing business information and fees for business registration.

Understand what is a foreign-invested educational institution in Vietnam

Pursuant to Clause 2 Article 2 of Decree 86/2018/ND-CP regulating foreign-invested educational institutions. Accordingly, a foreign-invested educational institution is an educational institution invested by a foreign-invested economic organization.

An important thing that Vietnamese law stipulates is that foreign-invested educational institutions are allowed to use their own seals and accounts. This regulation has facilitated the process of conducting legal transactions and administrative procedures for foreign-invested educational institutions.

It can be said that the provisions of Vietnamese law on foreign-invested educational institutions have created a development environment as well as attracted foreign investors to invest, forming more foreign-invested educational institutions.

Types of foreign-invested educational institutions in Vietnam

There are 5 types of foreign-invested educational institutions specified in Article 28 of Decree 86/2018/ND-CP, including:

• Short-term training and retraining institutions.
• Preschool educational institutions.
• General education institutions (primary schools, lower secondary schools, upper secondary schools, high schools with several levels of education).
• Higher education institutions.
• Branches of foreign-invested higher education institutions in Vietnam.

Conditions for investment in the field of education according to international agreements

According to Vietnam’s commitments in the WTO

• Regarding market access restrictions for the education sector, the current mode of trade presence is not committed to the WTO.
• Scope of activities: General education, higher education, adult education and other educational services, including foreign language training
• The training program must be approved by a competent state agency.

According to CPTPP

According to Vietnam’s commitments in the CPTPP, foreign investors may invest in the establishment of general education institutions only if they satisfy the following conditions:

• General education institutions shall implement educational programs according to foreign programs, grant foreign diplomas, for foreign students and a part of Vietnamese students in need.
• General education institutions are allowed to admit Vietnamese students, but the number of Vietnamese students in primary and lower secondary schools is not more than 10% of the total number of students of the school, in upper secondary schools not more than 20% of the total number of students of the school.

In Annex II, Viet Nam reserves the right to adopt and maintain any measures relating to investment and/or provision of lower secondary education services.

Conditions for foreign investment in the form of general education institutions

Conditions on investment capital

• Pursuant to Clause 2, Article 34 of Decree 86/2018/ND-CP stipulating that investment projects to establish general education institutions must have an investment rate of at least VND 50 million/student (excluding land use costs). The total investment capital is at least calculated based on the time of the highest expected scale, but not lower than VND 50 billion.
• At the same time, for foreign-invested educational institutions that do not build new facilities but only lease them or are contributed capital by the Vietnamese party with existing facilities for operation, the investment level must reach at least 70% of the levels specified in the above section.

Material and technical base

Pursuant to Clause 3, Article 36 of Decree 86/2018/ND-CP on material foundations and equipment for general education institutions.

• The school is concentrated in one location, with a good environment. The area of school construction is determined on the basis of the number of classes, the number of students and regional characteristics, with an average of at least 06 m2/student for cities and towns and 10 m2/student for rural areas;
• Having an area used for learning and teaching to ensure an average of at least 2.5 m2/student;
• There are appropriate school offices, school boards, teachers’ rooms, meeting rooms;
• Having subject classrooms (for lower secondary schools and upper secondary schools), libraries, tables and chairs, teaching equipment and supplies, meeting standards according to current regulations of the Ministry of Education and Training;
• There is a multi-purpose gymnasium, art education room, computer room, education support room for disabled students, inclusive learning disabilities, school health room. There is a cafeteria, lunch room if day school is held;
• Having clean water and toilet systems suitable to the scale of the educational institution, ensuring conditions on standards according to current regulations of the Ministry of Education and Training;
• There are playgrounds, training grounds, parking areas with an area at least equal to 30% of the total area of the school. There is a wall surrounding the school area, a school gate with a school sign clearly stating the name of the school as prescribed in Article 29 of this Decree.

The educational program of the general educational institution is organized and taught

Educational programs implemented at foreign-invested educational institutions must reflect educational objectives and not contain contents detrimental to national defense, security and community interests; not to spread religion or distort history; must not adversely affect Vietnamese culture, morality and fine customs and customs and must ensure conditions for transfer between education and training levels

Teachers

Pursuant to the provisions of Clause 3, Article 38 of Decree 86/2018/ND-CP, teachers for foreign-invested general education institutions need to comply with the following requirements:

• Teachers must have at least a pedagogical university degree or equivalent
• The number of teachers must be at least 1.5 teachers per class for primary schools, 1.95 teachers per class for lower secondary schools and 2.25 teachers per class for upper secondary schools;
• The number of students per class must not exceed 30 students per class for elementary schools, 35 students per class for middle and high schools

Process of establishment of foreign-invested general education institutions

Step 1: Issuance of investment registration certificate

Depending on the investor’s project, the foreign investor must prepare dossiers to apply for an investment registration certificate. Accordingly, if meeting the conditions for issuance of certificates, competent agencies under the Department of Planning and Investment shall grant them. Besides, for the issuance of investment registration certificates related to education, it is also necessary to obtain appraisal opinions of the Department of Education and Training.

Step 2: Carry out land lease procedures (if any)

Foreign investors need to carry out land lease procedures to carry out the construction of educational institutions according to their projects. In case of new construction of educational institutions, foreign investors must apply for construction permits before establishment.

Step 3: Establish a foreign-invested educational institution

In order to proceed with the establishment of an educational institution, the foreign investor must submit a dossier of application for establishment permission. After obtaining the establishment license, the foreign investor must continue to make the application for registration for permission for educational activities.

After being granted the certificate, enterprises will be able to publish the contents of business registration information with a disclosure fee of VND 100,000 as prescribed in Circular 47/2019/TT-BCT.

If you are a foreign investor wishing to advise on the service of establishing a foreign-invested general education company (institution) in Vietnam, please contact Viet An Law Firm for the best support.