In 2020, when most sectors suffer major reductions due to impacts of the Covid-19 pandemic, the education sector stood out with an increase of 58% in foreign-direct investment.
Investors eyeing investment in the education sector in Vietnam must be aware of their benefits, and limitation, under the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA). The CPTPP came into force on 14 January 2019 for Vietnam and currently include the following signatories: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. In addition, China, Ecuador, Taiwan and United Kingdom applied and awaiting result on their accession to the CPTPP. The EVFTA came into force on 1 August 2020 between the European Union countries and Vietnam.
CPTPP:
Vietnam welcomes the opportunity to formulate policies with other CPTPP countries on initiatives that enhance and promote growth and investment in education. Specific commitments of Vietnam under the CPTPP with regards to education services include:
- Vietnam reserves the right to adopt and maintain any measure related to investment in secondary education services.
- Foreign investor is prohibited to provide educational services in the following subjects: security, national defense, politics, religion, Vietnamese culture and other subjects necessary to protect Vietnamese social morality. This limitation does not prevent the provision of educational services in subjects to which Vietnam has committed in other trade agreements.
- No foreign investor is allowed to provide primary education or secondary education services except through:
– Pre-school educational institutions implementing foreign educational programs for children who are foreigners;
– General education institutions implementing foreign educational programs, granting foreign degrees, for foreign students and a part of Vietnamese students in need.
- General education institutions are allowed to accept Vietnamese students, but the number of Vietnamese students in primary and secondary schools shall not exceed 10% of the total number of students in the school, in high schools not more than 20% of the total number of students in the school.
The establishment of foreign educational institutions in Vietnam will automatically lead to increase in education-related travel services and a variety of education tools advancement (e.g. online courses), contributing to the trading activities between investor countries and Vietnam.
EVFTA:
Vietnam’s commitments in educational services are only in technical, natural sciences and technology, business administration and business studies, economics, accounting, international law and language training fields.
- For secondary education service, cross-border supply and foreign investor’s commercial presence in Vietnam are fully open.
- For higher education services, adult education and other education services (including foreign language training), Vietnam has not made any commitments under the EVFTA and the education content under such services must be approved by Vietnam’s Ministry of Education and Training.
- Foreign teachers who wish to work in foreign-invested schools in Vietnam shall have at least 5 years if teaching experience, and their qualifications shall be recognized by the competent authority.
Vietnam welcomes foreign capital to further increase the quality and quantity in the education sector. With the number of middle-class growing rapidly, citizens require much higher living standards. This includes parents sending children to study abroad or at least, enjoy world-class education domestically. An increase in the number of expats also contribute to the need for more advanced and tailored education system. Foreign investors should grasp the opportunity to invest in this growing market sector.
Please do not hesitate to contact Dr. Oliver Massmann under [email protected] if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
