Setting up a foreign invested company for operating international mixed education institution in Vietnam

Question: My company would like to set up a foreign invested company for operating international mixed education institution in Vietnam. Please quote.

Answer:

This is reference to our conservation from which we were requested to advice on setting up a foreign invested company (hereinafter referred to as “FIC”) for operating international mixed education institution (from kindergarten to high school) in Vietnam. We therefore are grateful to set our legal services proposal for your review and consideration as follows:

1. BRIEF SUMMARY OF BACKGROUND AND OUR COMMENTS

It is our understanding that you are now considering possibilities of setting up a foreign invested company for operating international kindergarten, elementary, secondary and high school in Vietnam.

1.1 Kindergarten Education Service

For operating kindergarten in Vietnam, you must satisfy following conditions:

• Investment Capital: Capital investment must be at least 30 million VND (about 1,500USD) per kid (exclusive of the expense on land tenancy). The total minimum capital is calculated based on the total quantity of students when the estimated education scale is greatest. For instance, according to your business plan, you shall receive about 350 kids when your kindergarten reaches the maximum scale. Then, your investment capital should be at least 1,500USD x 350 =525,000USD;

(b) Facilities and equipment:

• The light, furniture, and teaching equipment in classrooms must be appropriate;
• The minimum average area for teaching must be 6-8 m2 per kid;
• Bed room must satisfy the standard of 1.2-1.5 m2 per kid;
• Playing room or class room must satisfy the standard of 1.5-1.8m2 per kid;
• Toilet must satisfy the standard of 0.4-0.6m2 per kid;
• Having offices for the Board of Directors, teachers, libraries, and other functional rooms;
• Having necessary equipment serving the teaching and

(c) Education program

• The education program must demonstrate the educational target, without damaging the national security and public interests; without spreading religion, distorting history; without negatively affect the cultures, ethics, and traditional customs of Vietnam, and must ensure the connection between the levels and grades.
• You can provide International Education Program to kids. However, at presence, Vietnamese Kids below 5 years old must not attend International Education Program. This restriction shall be removed upon the Government issues new Decree on international co-operation on education

(d) The teaching staffs and Manager

• Teachers must possess professional secondary pedagogical school diplomas upward in the field of kindergarten education industries; For teachers possessing professional secondary pedagogical school diplomas upwards in the field of education other than kindergarten education industries, they must join a 30 days training courses on kindergarten education;
• Director of Kindergarten must possess professional secondary pedagogical school diplomas upward in the field of kindergarten education industries, having at least 5 years experience in the field of kindergarten education and having completed training course for management in education services;
• Chairman of Kindergarten must possess professional secondary pedagogical school diplomas upward in the field of kindergarten education industries and having completed training course for management in education services;

1.2  Compulsory education Service

For operating Mixed Compulsory Education Institution in Vietnam, you must satisfy following conditions:

• Investment Capital: Capital investment must be at least 50 million VND (about 2,203USD) per student (exclusive of the expense on land tenancy). The total minimum capital calculated based on the total quantity of students when the estimated education scale is greatest must not be lower than 50 billion VND (about 2,203,000USD);

(b) Facilities and equipment:

• The school must be situated in a good environment. The area must be calculated based on the quantity of classes, students, and the regional characteristics: at least 6 m2 per student, applicable to urban areas; 10 m2 per student, applicable to rural areas;
• The minimum average area for teaching is 2.5 m2 per student;
• Having offices for the Board of Directors, teachers’ room, and conference room;
• Having specialized classrooms (for middle schools and high schools), libraries, furniture, and teaching materials satisfying the current standards set by Vietnam Law;
• Having a multi-purpose gym, art learning room, computer lab, language learning room; supporting rooms for disabled students, an infirmary, canteen, and siesta rooms (for day-boarding schools);
• Having the water supply and drainage system suitable for the scale of the educational institution, ensuring the standards set by Vietnam Law;
• Having playgrounds, drill grounds, and parking lots that account for at least 30% total area of the school. Having surrounding walls, and a gate specifying its name as prescribed in accordance with Vietnam

(c) Education program

• The education program must demonstrate the educational target, without damaging the national security and public interests; without spreading religion, distorting history; without negatively affect the cultures, ethics, and traditional customs of Vietnam, and must ensure the connection between the levels and grades.
• You can provide either International Education Program or Vietnam Education Program to students. However, at presence, the number of Vietnamese students in primary schools and secondary schools must not exceed 10% of the total number of students, and that in high schools must not exceed 20% of the total number of students. This restriction shall be removed upon the Government issues new Decree on international co-operation on education

(d) The teaching staffs and Manager

• The teachers of elementary schools, middle schools, and high schools must have Bachelor’s degrees in pedagogy;
• The ratio of teachers must be kept at 5 teachers per class in elementary school; 1.95 teachers per class in middle schools, and 2.25 teachers per class in high school;
• The quantity of student must not exceed 30 students per class in elementary schools, 35 students per class in middle schools and high schools;

1.3 Licensing Process

• Setting up Foreign Invested Company in Vietnam:

The establishment of a Foreign Invested Company requires an Investment Certificate and Certificate of Enterprise Registration from the licensing authority. For this purpose, it shall require you to undergo two following steps:

Step 1: Obtainment of Investment Certificate. The Law requires that within 35 working days from submission of the application dossier the competent authority shall have to issue the Investment Certificate for Foreign Investor. For granting the Investment Certificate, the relevant licensing authorities shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate on the following basis:

• Legal framework including Vietnam’s WTO Commitments, Vietnam Investment Law, Vietnam Enterprise Law, Regulations applicable to specific industries as well as the master economic development plan of the city or province that the FIC shall register its head-office.
• Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.

Step 2: After obtainment of Investment Certificate, Client shall be required to obtain the Certificate of Enterprise Registration. The Law requires that within 07 working days from submission of application dossier, the competent authority shall have to issue the Certificate of Enterprise Registration for forming the Foreign Invested Company.

(b) Approval for establishment of Mixed Education Institution

After obtaining Certificate of Enterprise Registration from the competent authority, you must submit application dossier for approval for establishment of Mixed Education Institution to the Provincial People Committee. In this phase, you must prepare detailed project of the establishment of the Mixed Education Institution, specifying name, educational targets; qualifications and certificates being issued; the designed structure of the managerial mechanism and the detailed plan for the development and scale of the Mixed Education Institution in each period, specifying the fulfillment of the conditions for facilities and equipment, education programs, and teaching staff. A property lease contract having validity term from 5 years upward and detailed architecture design must be enclosed with the application dossier for approval.

Within 9 months from the submission of application dossier, the competent authority shall approve establishment of the Mixed Education Institution.

(c) Approval for operation of the Mixed Education Institution

After completion of decoration or construction work of kindergarten, recruiting staffs etc, the Mixed Education Institution shall proceed with legal procedure for approving operation of kindergarten. The application dossier shall be submitted to the Provincial Department of Education and Training. The Provincial Department of Education and Training shall setup audit team to audit facilities of the Mixed Education Institution. It shall take you about 60 working days from submission of application dossier to complete the approval.

2. SCOPE OF WORKS

Our estimated timeline shall be as follows:

a. Preparing the application dossier: We shall collect necessary information and documents from Upon receipt of necessary information and documents from you, we shall translate documents from English into Vietnamese and prepare the application dossier under the standard forms. The initial drafted application dossier shall be sent to you for your comments. Then, after updating the application dossier based on your comments, we shall obtain the preliminary comments from the competent authority and send the finalized application dossiers for you to sign and seal. We anticipate that this phase shall be completed within 20 working days.

b. Licensing Procedure:

• 02 working days from receipt of documents duly signed and sealed from Client, we shall submit the application dossier for starting the licensing procedure. It shall take about 35 working days from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment

• 03 working days from receipt of Investment Certificate issued by the competent authority, we shall submit the application dossier for obtainment of Certificate of Enterprise We shall obtain the Certificate of Enterprise Registration within 5 working days from the submission date.

c. Post licensing:

• Within 10 working days we shall complete the post licensing procedures such as publishing the FIC in National Database of Enterprise Registration, obtaining seal;
• Within 9 months from submission of application dossier to the competent authority, we shall complete obtaining license for establishment of the Mixed Education Institution;
• Within 60 working days from submission of application dossier to the competent authority, we shall complete obtaining approval for operation of the Mixed Education Institution.

3. PROFESSIONAL FEE

Establishment of FIC: 8,800USD (Eight thousand eight hundred US Dollar);

Setting up the Mixed Education Institution running foreign education program applicable for foreign students and a specific rate of Vietnamese students as stipulated at Decree No.72/2012/ND-CP: 35,500USD (Thirty five thousand and five hundred US Dollar).

Obtaining approval for operation of the Mixed Education Institution shall be 16,200USD (Sixteen thousand and two hundred US Dollar).

* The above service fee is exclusive of VAT (10%), Governmental fees, Expense for translating documents from English into Vietnamese (10USD/150 words), bank fees for receipt, deposit or transfer of funds, etc.

The above is proposed on the following specific consumptions:

+ Client shall be responsible for obtaining approval on adjustment of master plan on land and design for building up Mixed Education Institution;

+ Client shall lease the existed Building from ECOPARK for setting up Mixed Education Institution