What to Know about Foreign Investment in Vocational Institutions in Vietnam

Decree No. 15/2019/ND-CP or Decree 15 was announced effective on March 20, 2019 by the government regarding foreign investment in the vocational education sector in Vietnam. This recently issued regulation has introduced new requirements for foreign investors with detailed instructions on Vocational Education and Training (LOVET). This regulation is expected to bring in more foreign investments in vocational education institutions.

Previously without Decree 15, foreign investments in vocational education sector were not easy due to the lack of regulations laying out conditions on foreign-invested vocational training institutions in Vietnam. In Decree 15, the new conditions for foreign investors consist of investment capital size of establishment size, training modules, and representative offices or branches setup.

In this article, you will learn more about Decree 15 and how you can invest in vocational education sector in Vietnam.

Capital of Investment

VND 5 billion (~US$217,000) is the minimum amount in order for a foreigner to start a vocational training center. The minimum investment capitals are different for a secondary vocational institution and vocational college: they are VND 50 billion (~US$ 2.1 million) and VND 100 billion (~US$4.2 million) respectively.

Size of Establishment

Decree 15 stated that in order to set up a basic vocational training center, a foreign investor must acquire a land with a size of 1,000 square meters.

For urban-area secondary vocational training centers, suburban schools or rural-area schools, a foreign investor needs at least 10,000 square meters of land (urban areas) and 20,000 square meters of land (suburbs and rural areas).

For urban-area and non-urban area vocational college, lands with 20,000 square meters (urban areas) and 40,000 square meters (non-urban areas) are compulsory.

Representative Office in Vietnam

Decree 15 allows foreign vocational educational institutions to set up representative offices to enhance the collaboration between foreign institutions and Vietnamese partners. Through the partnership, they can organise seminars and provide counseling services.

However, a representative office is prohibited to participate in profit-generating commercial activities. It is also not allowed to open branches in Vietnam.

The requirements for a foreign institution to open a representative in Vietnam are as follows:

• It has a legal entity status overseas
• It must have already operated for no fewer than five years in its own country abroad

Related article: Restrictions for Representative Office in Vietnam

Branches in Vietnam

A new branch of a foreign-invested secondary vocational school or college is possible when investors fulfill the below conditions:

• The investor has a detailed development plan indicating why the new branch or campus is necessary
• The plan must also include the name, the entity’s scope, and detailed training subjects and fields
• Investors have to provide a minimum 5-year lease agreement of the infrastructure and facilities
• The capital of investment capital is 25% of the minimum capital requirement for establishing a vocational training institution

Training Modules

The training modules should comply with Article 34 in the Vocational Training Law and must include all the compulsory subjects.

Contents that threaten public interest or national defense, misinterpret history of the country, publicise religions, or impair customs, ethics and culture are strictly prohibited.

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