ESTABLISHING A FOREIGN-INVESTED EDUCATION CENTER IN HO CHI MINH CITY: CONDITIONS AND PROCEDURES 2025

10 March, 2026 133 Views

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Ho Chi Minh City (HCMC) is a special class municipality and a hub for a vast community of expatriates living, studying, and working. It serves as a strategic destination for international investors, particularly in the education sector—a field that is increasingly opening up with robust growth potential. However, to establish a foreign-invested education center in HCMC, investors must clearly understand the legal framework, binding conditions, and rigorous licensing procedures under Vietnamese law.

This article provides a comprehensive analysis of current regulations and the latest 2025 updates to help you build a compliant and effective educational investment strategy.

Legal Framework Regulating Foreign Investment in Education

Foreign investment activities to establish education centers in Vietnam, and HCMC specifically, are governed by a strict legal system. Key legal instruments include:

Law on Investment 2020 (amended in 2022).
Law on Education 2019.
Decree No. 86/2018/ND-CP on foreign cooperation and investment in education.
Circular No. 04/2020/TT-BGDĐT guiding the implementation of Decree 86.
Law on Enterprises 2020 and relevant specialized regulations (Fire Prevention and Fighting, Construction, Labor, etc.).
Guidelines from the HCMC Department of Planning and Investment (DPI) and the HCMC Department of Education and Training (DOET)

Note: Depending on the specific type of center (Foreign Languages, Life Skills, Overseas Study Consultancy, etc.), additional specialized regulations may apply.

Permitted Investment Forms for Foreign-Invested Education Center

According to the law, foreign investors may establish education centers under the following forms:

Language Centers are categorized under “Other Education Services (CPC 929, including foreign language training).”
WTO Commitments: Under Vietnam’s WTO Schedule of Specific Commitments in Services, “Other Education Services” are committed as follows:

“Unbound, except: As of the date of accession, only joint ventures are permitted. Foreign ownership may be a majority. As of January 1, 2009, 100% foreign-invested education establishments are permitted.”

Current Status: Foreign investors are now fully permitted to conduct language training businesses and establish 100% foreign-owned language centers in Vietnam without restrictions on investment form

Conditions for Establishing a Foreign-Invested Education Center

1. Investor Capacity

Investors must demonstrate financial capacity, reputation, and experience. Criteria include:

Sufficient investment capital to ensure operations for at least the first year.
A clean legal record (no violations in the home country or Vietnam).
Priority is given to investors with experience in international education or those owning reputable educational brands.

2. Investment Capital

While there is no “hard” statutory minimum, in practice, based on DOET and DPI guidelines:

Minimum 1 billion VND for a small-scale center (approx. 5 classrooms).
Proof of capital via financial statements, bank statements, or capital confirmation from reputable financial institutions.
For large-scale or multi-functional centers, the required capital typically ranges from 3 to 5 billion VND.
Capital must be proportional to the training scale, projected student enrollment, and operating costs.

3. Location and Facilities

Facilities are a mandatory factor audited before an educational operation license is granted:

Location: Must have a specific address in HCMC, compliant with land-use planning (residential apartments are strictly prohibited).
Average Area: Minimum 2.5 m² per student at peak capacity.
Safety: Classrooms must have adequate lighting, ventilation, and Fire Prevention and Fighting (FPF) certification, including standardized emergency exit plans.
Lease Term: A notarized lease or purchase agreement with a remaining term of at least 5 years.

4. Teaching and Management Staff

Foreign Teachers: Must hold a university degree or higher, relevant expertise, and at least 5 years of experience (For language teaching, a university degree plus a TESOL/TEFL/CELTA certificate is required).
Vietnamese Teachers: Must have pedagogical degrees or pedagogical practice certificates.
Director: Must have at least 3 years of experience in educational management.
Compliance: All personnel must hold legal labor contracts and social insurance. Foreign staff require valid Work Permits and appropriate Visas

Licensing Procedures in HCMC

The process consists of three main steps:

Step 1: Investment Policy Registration

Authority: Department of Planning and Investment (DPI).
Dossier: Investment proposal, proof of investor capacity, legal documents.
Timeline: 15–20 working days.
Result: Investment Registration Certificate (IRC).

Step 2: Entity Establishment & Center Creation License

Action: Establish a business entity with educational functions under the Law on Enterprises 2020.
Authority: DOET.
Dossier: Educational operation plan, facility documentation, staff lists, organizational charter.
Timeline: 20–30 working days.
Result: Decision on Establishment of the Center.

Step 3: License to Operate Educational Activities

Action: Conducted after recruitment and facility setup are complete.
Authority: DOET (via physical inspection).
Result: License to Operate Education Activities. This allows the center to officially enroll students and grant certificates.
Note: Licenses are typically valid for 5 years and must be renewed on time

Risks and Recommendations

Despite the potential, investors should be aware of:

Complex legal procedures involving multiple ministries and specialized sub-regulations.
High requirements for financial transparency, tax compliance, and labor law.
Language and cultural barriers in personnel management.
Recommendation: Investors should collaborate with reputable legal and investment consultancies to navigate the process from planning to operation.