Education is an attractive field for foreign investors. However, when investing in this field, investors should be careful about the opportunities and challenges that bring.
The education sector is being facilitated
Vietnam’s commitment to the WTO on opening up the education sector actually creates opportunities for foreign investors. In the context that Vietnam is in dire need of international-standard learning environments, the education business has the potential to bring great profits to investors.
When establishing an educational institution, it is not in all cases that a foreign-invested enterprise has to carry out the construction of the facilities and complete it before putting it into operation. For educational institutions registered to operate for less than 20 years, it is not necessary to build their own facilities, but they can rent schools, classrooms, workshops, and other suitable and stable areas for at least a period of time. 05 years. In the case of registration of operation for 20 years or more, the construction of new facilities is mandatory, the maximum period is five years. These establishments must have a contract or agreement on the principle of leasing necessary and stable facilities for the implementation of training and teaching and must ensure the investment in building facilities according to the project’s schedule.
In addition to the main educational institution, foreign investors can also open more branches in the same province or city or in other provinces and cities.
Notable legal issues
1. Scope and form when foreign investors invest in the education sector
According to the schedule of commitments with WTO, for the education sector, Vietnam only commits to the fields of engineering, natural science and technology, business administration and business science, economics, accounting, international law, language training, for educational content within the scope of Higher Education, Adult Education, Other educational services, the training program must be approved by the Ministry of Education and Training of Vietnam ratified.
Particularly for general education services including primary, lower secondary, high school and preschool education, Vietnam has not yet committed to opening its doors to foreign investors. Therefore, the general education institution opened by foreign investors is for foreign students and only a part of Vietnamese students has needs according to the statutory ratio. As for the preschool education institutions for children who are foreigners and are not allowed to accept children of Vietnamese nationality.
Foreign investors are allowed to invest in the establishment of educational institutions in one of two forms: an educational institution with 100% foreign capital or a joint-venture educational institution with domestic investors.
2. Limitations in setting up an educational institution for foreign investors
Foreign investors must carry out procedures to apply for 3 kinds of licenses according to the following process:
- Investment registration certificate;
- Decision for approval of educational institution establishment;
- License for educational operation.
Note, if more than 36 months for higher education institutions and vocational education institutions (except vocational training centers) and more than 24 months for other educational institutions, the educational institutions still do not have If all conditions are met to be granted an educational operation license, the previously issued establishment permit decision will be revoked.
The percentage of Vietnamese students studying at educational institutions implementing educational programs according to foreign programs and granting foreign diplomas must not exceed 10% for primary and lower secondary schools, and not more than 20%. with high school. This regulation will cause difficulties for the above schools when the number of Vietnamese students who would like to enroll exceeds the statutory rate.
According to the provisions of Decree 73, the percentage of lecturers with doctorate degrees of foreign-invested colleges and universities is at least 25% and 35%, respectively. Meanwhile, from non-foreign-invested universities, the number of lecturers with doctorate degrees is not fixed, but only needs to meet the school’s operational requirements.