Starting a firm in the education sector in Vietnam is a sure bet. The nation’s education industry has drawn a lot of international investors because of its persistent demand and growth, as well as improving profitability.
Statistic estimates that Vietnam spent roughly 249.5 trillion Vietnamese dong on education and training in 2021. Vietnam’s GDP contribution from education and training that year was nearly under 4%.
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According to the Vietnam National Institute of Educational Science (VNIES), spending on education in Vietnam has tended to increase progressively over the last ten years.
The aforementioned initiatives include coverage for elementary schools, kindergartens, secondary schools, international schools, language schools, public schools, providers of vocational training, and higher education institutions, including colleges and universities.
As a result, the Vietnamese government approved Decree 86 on foreign investment and cooperation in education, which has been in effect since August 1, 2018, boosting the growth of the education industry in Vietnam.
Vietnam’s Education Sector: A Profitable Investment Destination for Entrepreneurs
Vietnam has attracted 437 foreign-funded projects with a total registered capital of USD 4.3 billion in the field of education and training. The majority of investments have gone toward the study of other languages, mainly English. There are currently roughly 450 English language facilities in Hanoi and Ho Chi Minh.
Major investments in education have served as the foundation for Vietnam’s growth strategy. UNESCO will continue to assist the nation and assist in overcoming the difficulties in this area in the upcoming years. The Vietnam National Institute of Educational Science (VNIES) conducted research that shows that throughout the preceding ten years, investments in education in Vietnam have tended to increase progressively.
The International Trade Admission claims that Vietnam’s education technology (EdTech) business has enormous potential and has grown rapidly in recent years. One of the prospective investment markets with substantial growth for investors is the Asian EdTEch market. Vietnam has experienced rapid growth as a result of the development of distant learning and edtech in Southeast Asia.
Investment in Vietnam Education: Opportunities and Challenges
Opportunities
It is common practice for students to enroll in additional private classes and training programs on top of their regular academic requirements due to the overwhelming workload, stringent standards, and questionable performance at public schools. High education aspirations among Vietnamese students frequently exceed those of students worldwide.
Only 27 cities globally have more than 50 international schools, including Ho Chi Minh City. In addition to providing education for expatriate children, these foreign schools also offer instruction to local families who desire to register their children in a school offering international credentials. Due to restrictions on domestic students attending international schools, many Vietnamese youngsters who would like to enroll in the majority of the foreign schools in HCMC are unable to do so.
Challenges
In Vietnam, bribes are still frequently given for admission to schools, passing tests, and receiving high grades, making education one of the industries with the poorest regulatory procedures.
For international investors, strict local government rules may provide a problem. High taxes, the minimum foreign capital investment required for each type of institution and partnership, staffing requirements, and drawn-out and challenging regulatory processes are some of the hurdles to entry for investors.
The Pros and Cons of the Decree No. 86
The recently enacted regulations undoubtedly have both benefits and drawbacks.
The Pros
This law’s primary advantage is, first and foremost, the increase in Vietnamese students enrolling in educational institutions abroad.
Decree 86 significantly increased the maximum number of Vietnamese students who are allowed to enroll at foreign universities from 10 to 50%.
Vietnamese kids under the age of five can now enroll in foreign schools as well. As a result, there are greater chances for international investors thanks to the increase of Vietnamese students.
The Decree 86-mandated eased procedures for international training and educational institutions are another factor contributing to the increase in Vietnamese enrollment.
Foreign investors can now participate in merger and acquisition activity with just three requirements to be met. This has given overseas investors new investment alternatives and saved them a great deal of time.
The Cons
Every implementation has its own unique set of difficulties. Even after Decree 86 was approved, the procedure could still be challenging and the government’s hold on particular activities might still be tight.
For instance, funding for investments, teachers, infrastructure, curriculum approval, and a host of other things. For overseas investors, thorough study or consulting is highly recommended.
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How to Establish an Education Business in Vietnam
The same rules apply when setting up an education business in Vietnam for foreigners who are launching a business there.
Investors can select one of the following most popular entities:
- A limited liability company with at least one shareholder with no minimum capital required
- A partnership with a local national (at least two shareholders)
- A 100% foreign-owned company
- A foreign subsidiary or branch office
As with any other business in VIetnam, foreign investors must, of course, get an education license before establishing a company here.
The Vietnamese Department of Education and Training will issue the education license after your company registration is complete.
Why Choose InCorp Vietnam as Your Business Partner
Are you searching for the perfect investment and want to start a business in Vietnam? Would you want a cost-efficient educational business setup and quick business license application in Vietnam?
You will comprehend the many jurisdictions and company ownership options available to you in Vietnam with the help of InCorp Vietnam.
Depending on the financial situation and commercial operations of your organization, our qualified advisers will explain the various legal entities, ownership, licenses, and other concepts.
Our specialist consultants will explain the differences of legal entities, ownerships, licenses and more based on your company’s business activities and budget.
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