Legal barriers for foreign investors opening language centers in Vietnam

Vietnam is a promising market in the field of foreign language education due to the increasing demand for learning English, Chinese, Japanese, and other languages. However, foreign investors entering this sector face significant legal challenges. This article analyzes the key legal barriers that foreign investors may encounter when establishing a language center in Vietnam. 

1. Investment Forms 

Foreign investors can choose one of the following investment forms: 

• Establishing a wholly foreign-owned company. 

• Entering into a joint venture with a local partner. 

2. Licenses for Operating a Language Center 

Before commencing operations, foreign investors must obtain the following licenses: 

• Investment Registration Certificate for foreign language training activities. 

• Enterprise Registration Certificate. 

• Approval decision for educational operations.

• Work permits for foreign teachers (if applicable). 

3. Basic Requirements for a Language Center 

3.1 Investment Capital  

• The investment project must have a minimum investment of VND 20 million per student (excluding land use costs). The total minimum investment is determined based on the highest projected enrollment at any given time. 

• For foreign-invested language centers that do not construct new facilities but instead lease premises or use existing facilities contributed by a Vietnamese partner, the minimum investment must be at least 70% of the required amount stated above. By the time of educational operation approval, at least 50% of the total committed investment must be realized, and investors must commit to fully investing the required capital within five years from the date the center is approved for operation. 

See more: Service for obtaining an operating license for foreign language centers

3.2 Facilities 

• Ensure adequate lighting, furniture, equipment, and teaching materials as required by the educational program.

• The teaching and learning area must provide a minimum average space of 2.5 square meters per student.

• The center must have an office for the management board, a teachers’ lounge, a library, and other functional rooms.

• Comply with fire prevention and firefighting regulations. 

• Foreign-invested educational institutions are allowed to lease facilities for a minimum stable period of five years. 

3.3 Requirements for the Director of a Language Center 

3.3.1 Role and Responsibilities 

• Directly manage and operate the center’s organization and administration. 

• Be legally responsible for all activities of the center before the law and the relevant authorities. 

3.3.2 Qualifications 

• Have a good personal record. 

• Possess management capabilities.

• Hold a university degree in foreign languages or a university degree with at least a Level 3 foreign language certificate according to Vietnam’s 6-level Foreign Language Proficiency Framework (or an equivalent qualification).

• Have experience in the education and training sector. 

3.3.3 Appointment and Term 

• Must be appointed and recognized by the competent authority. 

• The term of office is five years. 

3.4 Requirements for Teachers 

3.4.1 For Vietnamese Teachers 

Teachers must meet one of the following conditions:  

• Hold a college degree or higher in foreign language pedagogy; or 

• Hold a college degree or higher in a foreign language and possess a teaching certificate. 

3.4.2 For Foreign Teachers 

Teachers must meet one of the following conditions: 

• Hold a college degree or higher in foreign language pedagogy; or 

• Hold a college degree or higher in a foreign language and possess an appropriate foreign language teaching certificate; or 

• Hold a college degree or higher, a foreign language proficiency certificate of Level 5 or above according to Vietnam’s 6-level Foreign Language Proficiency Framework (or an equivalent qualification), and an appropriate foreign language teaching certificate. 

Notes: 

• Work Permit Requirement for Foreign Teachers: Foreign teachers must obtain a work permit to legally work in Vietnam. However, when applying for a work permit, licensing authorities require the language center to have already obtained an operating license. This creates a challenge for investors, as they cannot employ foreign teachers to obtain the operating license and are instead required to hire Vietnamese teachers first. 

• Teacher-to-Student Ratio: The maximum teacher-to-student ratio is 25 students per teacher. Therefore, language centers must carefully plan their scale and student enrollment to ensure an appropriate number of teachers. 

3.5 Requirements for Teaching Curriculum 

Foreign education programs implemented in Vietnam must meet the following requirements: 

• The program must be recognized or accredited by a competent educational authority in the country of origin, ensuring it meets the quality standards of that country. 

• The program must have been taught for at least five years in the country of origin before the date of application for operation in Vietnam.

• The program must be approved for use in Vietnam by the foreign institution or organization that owns the educational program. 

• The curriculum must not contain any content that could harm national defense, security, or public interests. It must not promote religion, distort history, or negatively affect Vietnam’s culture, ethics, and traditional values.

Foreign investors who wish to use an international curriculum in Vietnam must strictly comply with these conditions. However, in practice, obtaining approval from the Ministry of Education for foreign programs is challenging, as they must undergo a thorough review process before being permitted for use. This remains a significant obstacle for foreign investors looking to introduce international curricula into Vietnam. 

Conclusion, opening a language center in Vietnam as a foreign investor requires not only financial resources but also compliance with strict legal requirements. Barriers such as licensing conditions, director qualifications, restrictions on hiring foreign teachers, curriculum approval, and complex administrative procedures can pose significant challenges to establishing and operating a center. 

To overcome these obstacles, investors must thoroughly prepare, from researching the legal framework to developing a compliance strategy. Additionally, seeking support from professional legal consultants can help streamline the licensing process and facilitate smoother operations. 

As Vietnam continues to open up to international education, improving policies and regulations will contribute to a transparent, attractive, and efficient investment environment for foreign investors in this sector. 

Share: