Starting an education business in Vietnam involves stringent licensing, significant capital, and specific facilities, requiring an Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) before securing special education licenses for operation, with varying capital and space requirements based on the type (preschool, general, short-term, higher ed) and whether facilities are new or rented. You’ll need proof of funds, qualified staff, and adherence to strict student-teacher ratios and space standards, making local legal guidance crucial.
Key Steps & Requirements:
- Get an Investment Registration Certificate (IRC): First step for foreign investors, proving your project’s legitimacy with proposal, investor details, and financial proof (15-30 working days).
- Obtain an Enterprise Registration Certificate (ERC): Officially forms your company, requiring a charter, address, and legal reps (3-5 working days).
- Secure Education Licenses: This involves getting an establishment license (to build/set up) and an operation license (to run), often requiring approvals from education authorities (20 working days for education operation permit).
- Meet Capital & Facility Standards:
- Capital: Varies widely (e.g., VND 50 million/student for K-12 = ~USD 2,000/student, VND 20 million/student for language centers = ~USD 800/student, VND 500 billion for university branches = ~USD 20 million), with lower requirements (70%) if renting.
- Space: Minimum area per student (e.g., 2.5m² for language centers) and teacher-student ratios (25:1 maximum) are mandated.
- Staffing & Curriculum: Staff must meet qualifications (degrees, experience), and foreign teacher credentials need Ministry of Education approval. Programs must be accredited in home country and operational for at least 5 years.
- Bank Account & Trademark: Open a Vietnamese bank account for investment funds and register your brand.
Essential Considerations:
- Type of Institution: Requirements differ for kindergartens, language centers, vocational schools, or universities.
- Foreign Investment Rules: Education is a conditional sector; expect detailed scrutiny under Decree 124/2024 (effective November 20, 2024).
- Local Expertise: Engaging local consultants is highly recommended for navigating the complex process.
In essence, it’s a multi-layered process requiring significant capital, robust documentation, and adherence to strict Vietnamese educational laws, requiring professional help for success.
Why Should Foreign Investors Consider Starting an Education Business in Vietnam?
Vietnam’s education sector offers exceptional growth opportunities driven by a population exceeding 100 million with nearly 23% under 35 years old by 2030, rapidly expanding middle class, and strong government commitment to educational modernization. According to Vietnam’s Ministry of Education and Training, the country has approximately 25.6 million students across all education levels in the 2023-2024 school year, creating substantial demand for quality education services. As of February 2025, Vietnam had 707 foreign direct investment (FDI) projects in the education sector with total registered capital nearing USD 4.64 billion, demonstrating strong investor confidence.
What Market Opportunities Drive Education Investment in 2025?
Three primary factors drive Vietnam’s education investment boom: demographic advantages, economic development, and government policy support (Resolution 35/NQ-CP promoting private sector participation to reach 13.5% of all institutions by 2025). Vietnam faces a significant teacher shortage of nearly 120,000 positions as of May 2025, creating substantial demand for qualified educators and education institutions. The Vietnamese government’s emphasis on STEM education (targeting 35% of students by 2030, with Vietnam currently at 55 STEM students per 10,000 people representing 30% of higher education enrollment) presents specialized opportunities for international education providers.
EdTech sector growth is particularly explosive, with Vietnam’s online education market valued at USD 3 billion, with leading startups like MindX, Prep, and NativeX attracting major funding. The Asian Development Bank’s first private sector investment in Vietnam’s education—a USD 150 million sustainability-linked loan to Vinschool in March 2025—signals growing recognition of private education’s role in addressing quality and accessibility challenges.
Vietnam’s higher education market is projected to expand significantly through 2029, fueled by rising demand, supportive policies, and tax incentives. Decree 124/2024 and Decree 125/2024 (both effective November 20, 2024) have significantly strengthened the regulatory framework, introducing clearer rules on foreign ownership, licensing, capital requirements, and curriculum standards.
What Types of Education Businesses Can Foreign Investors Establish in Vietnam?
Foreign investors can establish five main types of education businesses: (1) Foreign-invested K-12 schools (preschool, primary, secondary), (2) Foreign branch campuses of universities (FBCs), (3) Foreign-invested private higher education institutions, (4) Short-term training centers (language, IT, vocational skills), and (5) Joint education arrangements with Vietnamese institutions. Each category operates under specific regulatory frameworks with distinct capital requirements, licensing procedures, and operational restrictions defined in Decree 124/2024.
What Are the Capital Requirements for K-12 Schools?
Foreign-invested K-12 schools require minimum total investment of VND 50 billion (approximately USD 2 million) with VND 50 million per student capacity (approximately USD 2,000 per student). According to Decree 124/2024, at least 50% of total investment must be realized at the time of educational operations appraisal, with investors committing to fulfill remaining capital requirements within 5 years from approval date.
The curriculum must be accredited in the home country, have been actually adopted for at least 5 years, and receive approval for use in Vietnam by the program owner. Vietnamese students attending foreign-invested schools must take Vietnamese language and cultural subjects in accordance with Ministry of Education and Training (MOET) regulations. Foreign ownership allows enrollment of below 50% foreign curriculum at preschool and compulsory education levels.
Facility requirements for K-12 schools: For institutions using leased facilities, investment must cover at least 70% of capital specified for owned facilities, with stable lease contracts for minimum 5 years. All facilities must meet safety, infrastructure, and space standards set by MOET and local education authorities.
Can Foreign Universities Open Branch Campuses in Vietnam?
Yes, but only foreign universities ranked in the global top 500 for at least one of the preceding three years can establish branch campuses (FBCs) in Vietnam under Decree 124/2024. Minimum investment capital ranges from VND 350 billion to VND 500 billion (approximately USD 13.5 million to USD 19.2 million), depending on whether the FBC develops its own facilities or leases them, with at least 50% of capital realized at appraisal.
The establishment process involves three regulatory approvals: (1) Investment Registration Certificate from provincial Department of Planning and Investment after Prime Minister’s In-Principle Approval, (2) Establishment License from the Prime Minister, and (3) Educational Operation Permit from MOET. FBCs can deliver foreign training programs and grant foreign diplomas of parent institutions without further state authority approval.
Education programs must be recognized or accredited in the home country and taught directly for at least 5 years before Vietnam application. Additional mandatory courses for Vietnamese learners (physical education, Vietnamese language) are required. The government encourages FBC development particularly in STEM fields (science, engineering, technology) in major economic corridors.
What About Opening a Language Center?
Foreign-invested language centers require minimum investment of VND 20 million per student (approximately USD 800 per student, excluding land use costs) for owned facilities, or at least 70% of this amount for leased facilities. By appraisal time for operational permission, investment value must exceed 50% of total investment capital, with commitment to complete remaining investment within 5 years.
Key infrastructure requirements for language centers:
- Minimum average teaching area: 2.5 m² per student
- Offices for administration, teachers’ room, library, and functional rooms
- Appropriate lighting, furniture, equipment, and teaching aids
- For leased facilities: stable contracts for minimum 5 years
Staffing requirements: Teachers must hold minimum college degree in foreign languages or equivalent. The maximum student-to-teacher ratio is 25:1. Center directors must hold foreign language degrees or bachelor’s degrees with language certificates of at least level 3 according to Vietnam’s 6-level Foreign Language Competency Framework, plus 3 years of management and teaching experience.
Foreign teachers must possess at least a college degree or equivalent under Decree 124/2024. However, a practical challenge exists: foreign teachers need work permits to legally work, but licensing authorities require the center to already have an operating license. This requires investors to initially hire Vietnamese teachers first.
What Is the Step-by-Step Process to Start an Education Business in Vietnam?
The complete process requires 6 sequential steps: (1) Obtain Investment Registration Certificate (IRC), (2) Secure Enterprise Registration Certificate (ERC), (3) Get establishment approval from MOET or Department of Education and Training, (4) Prepare facilities and staffing, (5) Apply for Educational Operation Permit, and (6) Register company seal and open bank accounts. The entire timeline typically ranges from 30-45 working days for IRC and ERC, plus 20 working days for education-specific licenses, though complex projects may require 3-6 months including facility preparation.
How Do You Obtain an Investment Registration Certificate (IRC)?
The IRC is issued by the Department of Planning and Investment (DPI) and typically takes 15-30 working days after submission of complete application. For education projects, DPI must obtain appraisal opinions from MOET (for higher education branch campuses) or Department of Education and Training (for preschool, K-12, and short-term training) before issuing the IRC.
Required IRC documents include:
- Investment project proposal with detailed business plan and financial projections
- Investor’s legal documents (passport for individuals, company registration for organizations)
- Proof of financial capacity (bank statements demonstrating sufficient capital)
- Address proof for project location (land lease contract or ownership certificate)
- For education sector: additional documents demonstrating compliance with education-specific conditions
The registered capital specified in the IRC must be injected into a Vietnamese bank account within 12 months of IRC issuance. For education businesses, capital requirements are sector-specific as outlined above.
Education is a conditional business sector, meaning the IRC alone does not grant permission to commence operations—additional education licenses are mandatory. The IRC application through the National Enterprise Registration Portal allows online tracking. If successful, DPI issues a project code; if rejected, DPI provides written explanation within 5 working days.
What Comes After IRC? Understanding the ERC Process
The Enterprise Registration Certificate (ERC) can only be obtained after receiving the IRC and typically takes 3-5 working days. The ERC formalizes the legal existence of the company and doubles as the tax registration number.
Essential ERC application information:
- Company name (must include legal form: LLC or JSC)
- Registered capital amount (matching IRC specifications)
- Business address with legal proof of occupancy
- Legal representative details (at least one residing in Vietnam)
- Company charter and organizational structure
- Shareholder/member information and capital contribution commitments
The ERC is valid indefinitely unless revoked, while the IRC remains valid for the investment project duration, typically 5-50 years depending on project type. Educational infrastructure projects may receive validity up to 70 years.
How Do You Secure Education-Specific Licenses from MOET?
Education businesses require two additional licenses: (1) Establishment/Formation Decision and (2) Educational Operation Permit. The Establishment Decision is issued by the Director of Department of Education and Training (for language centers, K-12 schools, short-term training) or Prime Minister (for university branch campuses), typically within 5 working days if all conditions are met.
Application for Establishment Decision requires:
- Copy of IRC and ERC
- Proposed organizational structure and management regulations
- Educational program details (curriculum, teaching materials)
- Facility documentation (ownership or lease contracts minimum 5 years)
- Management staff profiles with required qualifications
- Initial teacher roster demonstrating compliance with 25:1 student-teacher ratio
Application for Educational Operation Permit requires:
- Written request for educational operation license
- Copy of establishment decision
- Regulations on educational activities
- Report on facilities, equipment, programs, teaching materials
- Management staff and teacher profiles with qualification proofs
- Documents proving lawful right to use land and buildings
- Funding sources documentation
Processing timeline: Within 20 working days from receiving complete documents, Department of Education and Training coordinates with relevant agencies to appraise conditions. If documents are invalid, notification comes within 5 working days. Decree 124/2024 streamlined this by reducing 14 of the 21 application forms, introducing online submissions and data sharing among government agencies.
What Are the Legal Requirements for Foreign vs. Vietnamese Ownership?
Foreign investors can establish 100% wholly foreign-owned education institutions in Vietnam, but restrictions apply to student enrollment composition. For foreign-invested K-12 schools and preschools, below 50% of enrolled students can follow foreign curriculum at preschool and compulsory education levels under Decree 124/2024. International schools serving primarily non-Vietnamese students (expatriate children) have no such restrictions.
Can Vietnamese Citizens Partner with Foreign Investors?
Yes, joint ventures between Vietnamese and foreign investors are permitted and often strategically advantageous. There are no mandatory local partnership requirements for education businesses—foreign investors can choose 100% foreign ownership or joint venture structures based on strategy.
Joint venture advantages:
- Easier facility acquisition (Vietnamese partners can own land directly)
- Simplified government approvals through local connections
- Cultural and linguistic bridge for regulatory compliance
- Shared investment burden for capital-intensive projects
For training linkage programs (collaborations between Vietnamese and foreign universities delivering courses without creating new legal entity), maximum term is 5 years with renewal options, approved by MOET.
What Curriculum Restrictions Apply?
All foreign curricula must be accredited in the home country, operational for at least 5 years before Vietnam application, and approved for use in Vietnam by the program owner. Vietnamese students must take mandatory Vietnamese subjects (Vietnamese language, Vietnamese history, Vietnamese geography for K-12; National Defense Education, Physical Education for higher education) as prescribed by MOET.
Decree 124/2024 prohibits curriculum content that could:
- Jeopardize national security or territorial integrity
- Harm public interests or legitimate rights of organizations
- Violate Vietnamese cultural values or historical traditions
- Promote religious activities or distort historical facts
The government’s focus on STEM education and internationalization creates favorable conditions for foreign programs in science, technology, engineering, mathematics, and business administration.
For those establishing an education business in Vietnam, understanding local regulations extends beyond educational compliance. Foreign entrepreneurs should also be aware that navigating Vietnam requires familiarity with various regulations, including traffic laws and associated penalties, ensuring comprehensive legal compliance in all aspects of operations.
Explore More Content: How Much is the Fine for Running a Red Light in Vietnam?
What Financial Incentives and Tax Benefits Are Available?
Foreign-invested educational institutions benefit from significant tax incentives under Vietnam’s Law on Corporate Income Tax (CIT) and Law on Value-added Tax (VAT), including potential CIT exemptions, reduced rates, and VAT exemptions on educational services. Educational institutions providing general education typically qualify for CIT exemption or preferential rates as low as 10% for extended periods.
What Tax Rates Apply to Education Businesses?
Educational institutions providing general education (preschool through high school) typically qualify for CIT exemption or preferential tax rates. Higher education institutions and vocational training centers may receive 4-year CIT exemption from revenue-generating date, followed by 50% reduction for subsequent years.
VAT treatment for education services:
- Educational services (tuition, enrollment fees) are VAT-exempt
- Textbooks and teaching materials may qualify for VAT exemptions or 5% reduced rates
- Ancillary services (transportation, meals) subject to standard 10% VAT
Land and facilities incentives:
- Exemption from land rent for educational institutions during operation period
- Reduced land prices for educational facility construction in prioritized areas
- Streamlined land allocation procedures for qualifying education projects
Import duty exemptions apply to imported educational equipment, teaching aids, and specialized technology not manufactured in Vietnam.
Transitioning from domestic to foreign-invested status may trigger changes to available incentives. The grace period for satisfying investment licensing extends until November 20, 2025, and for education licensing until November 20, 2029, for existing domestic institutions converting to foreign-invested enterprises under Decree 124/2024.
What Are the Staffing and Work Permit Requirements?
Foreign teachers require valid work permits issued by the Department of Labor, Invalids and Social Affairs (DOLISA), which necessitate minimum bachelor’s degree (relevant to teaching subject), teaching certification (TEFL, TESOL, CELTA for language instructors), and typically 2-3 years relevant experience. Under Decree 124/2024, foreign teachers in training institutions must hold at least college degrees or equivalent.
How Do Education Businesses Obtain Work Permits?
The work permit process requires 15-20 working days and involves submission of: completed application form, health certificate from Vietnamese medical facility, criminal record check from home country (authenticated and legalized), educational credentials (bachelor’s degree minimum, notarized), teaching certification, proof of work experience, passport copies, and labor contract from employing institution.
Critical procedural challenge: Work permit applications require the education institution to already possess an Educational Operation Permit, creating a catch-22. The practical solution involves:
- Initially hiring Vietnamese teachers to meet licensing thresholds
- Securing Educational Operation Permit with Vietnamese staff
- Subsequently applying for work permits for foreign teachers
- Gradually adjusting staff composition
Teacher qualifications for MOET approval:
- Vietnamese teachers: Minimum pedagogical college degree for preschool/primary, bachelor’s degree for secondary/high school
- Foreign language teachers: College degree in foreign languages or bachelor’s degree with language certificate level 3+ or equivalent
- University lecturers: Master’s degree minimum, doctorate preferred
The student-teacher ratio of 25:1 maximum applies across education levels, requiring careful staffing planning for both regulatory compliance and educational quality.
What Common Challenges Do Foreign Education Entrepreneurs Face?
The three most significant challenges are: (1) complex multi-layered licensing procedures requiring 30-180 days across multiple agencies, (2) substantial upfront capital requirements (VND 50 billion to VND 500 billion depending on institution type), and (3) stringent regulatory compliance including curriculum approvals, facility standards, and ongoing reporting obligations. Additional challenges include finding qualified teachers, securing appropriate facilities, and navigating cultural differences in educational expectations.
How Can Investors Navigate Vietnam’s Education Regulations?
Engaging experienced local legal consultants and education specialists from project inception is crucial. Professional advisors provide: pre-investment feasibility analysis, licensing support (IRC and ERC application preparation, MOET liaison), compliance structuring (entity formation, curriculum approval strategies), and operational setup (teacher recruitment, contract drafting).
Critical success factors:
- Thorough due diligence (3-6 months) examining market demand, competitive landscape, and regulatory requirements
- Adequate capital planning (125-150% of minimum requirements) accounting for delays and contingencies
- Strong local partnerships (legal advisors, education consultants) reducing regulatory friction
- Phased implementation starting with pilot programs before scaling
- Quality-first approach prioritizing educational excellence over rapid expansion
The opportunity cost of non-compliance is severe: operating without proper licenses risks fines, business suspension, deportation of foreign staff, and permanent reputational damage. Vietnam’s education authorities actively monitor foreign-invested institutions through regular inspections.
For foreign teachers and education business owners planning their financial future in Vietnam, understanding potential earnings and savings opportunities is essential. Many find it helpful to learn about typical teacher salary structures and saving potential in Vietnam when planning their education business financial models and staffing budgets.
What Is the Long-Term Outlook for Foreign Education Investment?
Vietnam’s education sector continues expanding with private education’s share targeting 13.5% of all institutions by 2025 and continuing growth thereafter. Government commitment to educational modernization, articulated in Resolution 51/NQ-CP (March 2025), includes comprehensive action plans for digitalization and international integration.
What Future Regulatory Changes Should Investors Anticipate?
The new Investment Law taking effect March 1, 2026 (with conditional business line provisions effective July 1, 2026) will streamline foreign investment procedures by allowing enterprise establishment before IRC issuance for certain sectors. The government is reducing 38 conditional business lines and revising scope of 20 others, potentially easing education sector entry.
Expected education policy developments through 2026:
- Draft resolutions enhancing educational infrastructure from 2026-2035 (expected September 2025)
- Public investment program for modernizing higher education (December 2025)
- Strategic plan for high-tech industries workforce training (May 2025)
- Draft policy attracting foreign experts and overseas Vietnamese (August 2026)
The University Network Plan’s vision extending to 2050 encourages private higher education development, particularly not-for-profit models, welcoming top foreign universities to establish branch campuses beyond traditional Hanoi-Ho Chi Minh City hubs in cities like Da Nang, Hai Phong, Can Tho, Nha Trang, and others.
EdTech regulation remains evolving, with government drafting frameworks for online education quality assurance, student data protection, and digital credential recognition. Foreign EdTech investors should monitor regulatory developments as Vietnam balances innovation with consumer protection.
Frequently Asked Questions About Starting an Education Business in Vietnam
Do I Need a Vietnamese Partner to Start an Education Business?
No, foreign investors can establish 100% wholly foreign-owned education businesses without mandatory Vietnamese partners. However, joint ventures with Vietnamese entities may offer strategic advantages including easier facility acquisition (land ownership), simplified government approvals, cultural bridges for regulatory compliance, and access to existing Vietnamese education networks. The decision should be based on business strategy rather than legal requirements.
How Much Capital Do I Need to Open a Language Center?
Minimum investment is VND 20 million per student (approximately USD 800 per student, excluding land costs) for owned facilities, or at least 70% of this amount for leased facilities. By appraisal time, investment value must exceed 50% of total capital, with commitment to complete remaining investment within 5 years. For a center with 100 student capacity, minimum capital would be approximately USD 80,000 for owned facilities or USD 56,000 for leased facilities, though practical operational capital typically ranges USD 100,000-150,000 including working capital.
Can I Hire Foreign Teachers Before Getting an Operation Permit?
No, this creates a procedural challenge as work permits require the institution to already possess an Educational Operation Permit, while obtaining the permit requires demonstrating adequate teaching staff. The practical solution involves initially hiring Vietnamese teachers to secure the permit, then subsequently applying for work permits and hiring foreign teachers after licensure. This catch-22 is one of the most common challenges requiring careful initial staffing planning.
What Happens If My Business Operates Without Proper Licenses?
Operating without proper licenses constitutes serious legal violation resulting in administrative fines, business suspension, potential criminal charges, deportation of foreign staff, and permanent reputational damage. Vietnamese education authorities conduct regular inspections monitoring compliance with licensing, facilities, curriculum, teacher qualifications, and financial management. The investment registration certificate and educational operation permit are non-negotiable prerequisites—there are no grace periods for unlicensed operations.
How Long Does the Complete Licensing Process Take?
The complete timeline typically ranges 30-45 working days for IRC and ERC, plus 20 working days for Educational Operation Permit, totaling approximately 50-65 working days for licensing. However, practical timelines often extend to 3-6 months including facility preparation, staff recruitment, and addressing document deficiencies. Complex projects such as university branch campuses requiring Prime Minister approval may extend to 6-12 months. Engaging professional consultants can reduce timelines by 30-40%.
What Are the Main Differences Between Vietnamese and Foreign-Operated Businesses?
Primary differences lie in curriculum restrictions (foreign curriculum enrollment caps at below 50% for Vietnamese students in K-12), capital requirements (higher minimums for foreign-invested institutions), licensing complexity (additional MOET approvals for foreign programs), and reporting obligations (quarterly reports to authorities). Vietnamese-operated institutions have more curriculum flexibility, lower capital thresholds, and simpler licensing. However, foreign-invested institutions benefit from international brand recognition, access to global curricula, higher tuition pricing power, and comparable tax incentives depending on classification.
Ready to Explore More About Living and Working in Vietnam?
Starting an education business in Vietnam represents a significant opportunity in one of Southeast Asia’s most dynamic markets, but success requires thorough understanding of legal requirements, strategic planning, and professional guidance. Whether establishing an international school, language center, or EdTech platform, comprehensive knowledge of Vietnam’s regulatory environment is your foundation for sustainable growth.
Discover more essential guides for education professionals and entrepreneurs in Vietnam in our comprehensive UPDATES & LONG-TERM PLANNING category, covering everything from visa regulations and work permits to financial planning and business development strategies: Explore Updates & Long-Term Planning Resources
