Question: We are foreign investor and would like to set up preschool education institution in Ho Chi Minh City, please advise legal procedure?
Answer: SBLAW is 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 preschool education institution in Ho Chi Minh City, Vietnam.
According to the Decree No. 73/2012/ND-CP dated September 26, 2012, on foreign cooperation and investment in education, you are entitled to set up a wholly foreign invested preschool education institution in Vietnam in order to provide foreign educational programs for foreign children.
In order to setup a foreign invested preschool education institution in Vietnam, you must satisfy following conditions:
(a) Investment Capital: Capital investment must be at least30 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;
(b)Facilities and equipment:
– The school must be situated in a good environment.
– The area must be calculated based on the quantity of classes and kids: at least 6 – 8 m2 per kid;
– The area, light, furniture, and equipment in classrooms, bedrooms, and functional rooms must be appropriate;
– The offices, the infirmary, the security room, and staff’s rooms must be suitable regarding the area and equipment serving the management, care for, education of children;
– The water supply and drainage system, bathroom, and sanitation must be safe, clean, and suitable for the school operation;
– The kitchen (if any) must be organized based on the one-direction process using the suitable equipment that ensure food safety and hygiene;
– Having the playground, surrounding walls, and a gate specifying its name;
– There are trees in the schools area. All the constructions, equipment, and toys of the school must ensure absolute safety for the kids.
(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.
(d)The class
– The teachers must have college degrees in preschool pedagogy, or the equivalent;
– The maximum number of kids in a class must be as follows:
- 03 – 12 months old: 15 kids/class;
- 13 – 24 months old: 20 kids/class;
- 25 – 36 months old: 25 kids/class;
- 3 – 4 years old: 25 kids/class;
- 4 – 5 years old: 30 kids/class;
- 5 – 6 years old: 35 kids/class.
– The quantity of teachers in a class must be as follows:
- For kids 03 – 36 months old: 5 kids per teacher;
- For kids 03 – 06 years old: 10 – 12 kids per teacher.
Establishment of foreign invested preschool education institution in Vietnam must undergo three phases, i.e. (i) obtaining Investment Certificate; (ii) Approval for establishment of foreign invested preschool education institution and (iii) Approval for provision of education services.
2. PROCEDURES FOR ESTABLISHMENT OF foreign invested preschool education institution IN VIETNAM.
2.1. Obtaining Investment Certificate:
Before establishing foreign invested preschool education institution, Foreign Investor is required to setup a Foreign Invested Company (hereinafter referred to as “FIC”) which shall manage and operate foreign invested preschool education institution. The establishment of the FIC requires an Investment Certificate from the licensing authority.
We would like to clarify that the procedure for establishment of a FIC in Vietnam generally takes a rather long time in comparison with other countries in the region. Our practical experiences show that although the total time for establishment of a FIC as stipulated under Vietnam Investment Law 2005 is only 20 – 45 days, the actual process may take a longer time due to that the competent authority must consult other relevant offices to evaluate the investment project. Especially, with regard to the conditional business as training service and restaurant, the total time for establishment may be 6 months.
Under Vietnam Law on Investment, for incorporating a FIC, you are required to propose an Investment Project initially to obtain Investment certificate. The relevant licensing authority shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate on the following factors:
- The Investment Project must be in conformity with the socio-economic development and the educational Center network planning approved by competent State agencies;
- Pre-feasibility study on the establishment of the foreign invested preschool education institution;
- Available land in the locality to give or to lease out, or the agreement on leasing available facilities;
- Your financial ability, investment capital to put in the Investment Project, and human resources serving the implementation of such investment project in Vietnam.
The roadmap for the incorporation of the FIC can be described in following steps as follows:
i. Preparing the application dossier: We shall collect necessary information and documents from you. 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 10-12 working days.
ii. Submission of application dossier: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. It shall take about 50 workings days from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate. In some case the process can be longer as it takes time to consult relevant Ministries such as Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Finance and Ministry of Training and Education, Department of Training and Education of Ho Chi Minh City and the People’s Committee of District where the Center will be located.
iii. Post licensing: Within 13 working days we shall complete the post licensing procedures such as publishing the New Company in News Paper, obtaining seal and tax code registration.
By the way, we also would like to note that in the year of 2014, Vietnam National Assembly adopted a new law on Investment and Enterprise which shall become effect from 1st July 2015. Accordingly, the licensing procedure for setting up FIC shall have to undergo two following steps:
– Step 1: Obtainment of Investment Certificate. The Law requires that within 15 working days from submission of the application dossier the competent authority shall have to issue the Investment Certificate for Foreign Investor. However, having preliminarily discussed with the Licensing Authority, we do not much expect that the licensing authority can comply with this requirement in practice, especially, those relating to conditional investment sectors
– Step 2: After obtainment of Investment Certificate, Client shall be required to obtain the Certificate of Business Registration. The Law requires that within 05 working days from submission of application dossier, the competent authority shall have to issue the Certificate of Business Registration for forming the Foreign Invested Company.
2.2. Approval for establishment of foreign invested preschool education institution in Vietnam
After obtaining Investment Certificate from the competent authority, you must submit application dossier for approval for establishment of foreign invested preschool education institution in Vietnam to the Provincial Department of Education and Training. In this phase, you must prepare detailed project of the establishment of the preschool education institution, specifying name, educational targets; the designed structure of the managerial mechanism and the detailed plan for the development and scale of the preschool education institution in each period, specifying the fulfillment of the conditions for facilities and equipment, education programs, and teaching staff.
Within about 50 working days from the date of submission of valid application dossier to the competent authority, the provincial People’s Committee shall grant Decision on establishment of preschool education institution.
2.3. Approval for provision of education services
Within 24 months from being issued with the Decision on approving the establishment of the preschool education institution, you must apply for approval for providing education services.
The approval for providing education services shall be granted upon the satisfaction of following conditions:
- The organizational structure of the preschool education institution or its campus has been completed;
- The Regulation on organization and operation of preschool education institution is conformable with law;
- The conditions of capital, facilities and equipment, education programs, and teaching staff are satisfied;
- The conditions for establishing new faculties are satisfied, applicable to preschool education institution that establishes new faculties.
Within 30 working dates from the submission of application dossier, the competent authority shall approve the provision of education services. Then, your preschool education institution can officially provide training courses to foreign kids.
