With over half of the population under the age of 30, developing a well-trained labor force is crucial for Vietnam. Due to the range of possibilities in the area of education it is also an appealing sight for foreign businesses. The following article will give foreign investor an overview of starting with an education business in Vietnam.
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Foreign owned education business registration
Based on Export.gov, there are 234 universities and 185 colleges operating in Vietnam today. However, Vietnamese universities have room for only about 600,000 students of the over 1.8 million candidates who have taken the university/college entrance exams. Thus, today’s conditions are favorable for a foreign investor to start an education business in Vietnam.
The procedure of registering a foreign owned company for education purposes comes by registering the following:
- An investment project
- A company
- A license for educational activities
Formal education in Vietnam
The structure of education system in Vietnam is as follows:
- Preschool and kindergarten
- Primary school
- Secondary school
- Higher education
The 5 years spent in primary school are the only ones compulsory for Vietnamese children.
Secondary school however is divided into two separate educations:
- A lower secondary (trung học cơ sở)
- A higher secondary (trung học phổ thông)
Higher education in Vietnam
Vietnamese higher level education is provided by the following institutions:
- Senior colleges
- Research institutes
- Junior colleges
- Professional secondary schools
- Vocational schools
Based on the current legal framework stated on the Vietnamese Government Decree 73, the percentage of lecturers with a doctoral degree from colleges and universities with foreign investment is stipulated. Note that currently it must be at least 25 % and 35 %, respectively.
Incentives to set up an education company
The Vietnamese government has set up incentives for businesses investing in the following areas:
- Preschool education
- Compulsory education
- Vocational education
While Vietnam is showing efforts in getting closer to an international-standard learning environment, here is where a foreign investor can step in:
|Business line||Contribution limitation||Minimum capital|
|Vocational school||100% foreign-owned||Minimum capital: 100 billion VND (~4,4 million $US)|
|University||100% foreign-owned||Minimum capital: 300 billion (~13,2 million $US)|
|Note that the capital excludes land use expenses.|
In case you plan to rent available facilities, the minimum capital must be at least 70% of the minimum capital required.
To have a better image of what doing business in Vietnam is all about, make sure to also read our article about Corporate Compliance in Vietnam: A Year in the Life of a Foreign Company and minimum capital requirements in Vietnam.
Other educational and education support activities in Vietnam
This is what the education business in Vietnam knows as the grey area. There are many conditional business lines which by law are not stipulated and and can be considered as other educational activities. To sample a few, the following would qualify as such in Vietnam:
- Language centre
- Short term training
These non-formal lines of businesses do not require an additional license from the Department of Education and Training after setting up a company.
Which education business in Vietnam needs a license?
Whether you also need to process an education licence after setting up your company depends on the exact educational activities in Vietnam. From the below you’ll see that in some cases registering a company is just plenty from procedural sides.
For example, here is a sample list of business lines which need a license:
- Computer training
- Lifeguard and survival training
- Overseas study consultancy
However, as a comparison, speed reading instruction does not need a license registration.
In addition, there are some more alternatives.
Let´s say when your activities include employee or management education in the light of training, it is possible to sign your business up for management consultancy or business support instead. Outsourcing trainings on a short term basis is also an option if it meets your needs.
Emerhub can help you with both determining the type of license your business needs and processing the license itself.