New amendments to regulations on foreign investment in education sector in Vietnam

In June 2018, the Government issued Decree 86/2018 on cooperation with and investment by foreign investors (Decree 86/2018). Decree 86/2018 replaces Decree 73/2012 as from August 2018. In comparison with Decree 73/2012, Decree 86/2018 introduces certain notable changes as follows:

  • Decree 86/2018 no longer applies to foreign investment in vocational education (đào tạo nghề).  
  • For the first time, joint cooperation with foreign investors is permitted at all level of education including preliminary schools, secondary schools and high schools. Under Decree 73/2012, joint cooperation is only permitted for university education.
  • Decree 86/2018 expressly provides that a foreign investor to invest in education sector by contributing capital or to purchase shares and capital contribution from (1) a Vietnamese educational institution or (2) a foreign-invested business entity that establishes an educational institution in Vietnam. Decree 86/2018 also defines a foreign-invested educational institution as an education institution invested by foreign invested business entity.
  • Decree 86/2018 increases the cap on number of local students that a foreign-invested primary, secondary school, or a high school can enrol to 50% of the total students. Under Decree 73/2012, the cap is 20%.
  • Decree 86/2018 makes it more difficult for foreign investors to invest in universities in Vietnam by increasing the minimum investment amount to VND 1,000 billion (from VND 300 billion).

This post is contributed by Ha Kieu Anh, a legal trainee at Venture North Law.