Over the past few years, there has been a notable trend among investors who are redirecting their attention to Vietnam’s education sector, seeking greater prospects, particularly in the burgeoning EdTech market. To establish a thriving venture in Vietnam’s EdTech industry, it is crucial for investors to grasp the legal procedures involved in setting up an EdTechenterprise in the country. Understanding and adhering to the regulatory framework will play a pivotal role in their success in this exciting and rapidly expanding sector.

Overview of regulations and legal framework governing EdTech in Vietnam

Vietnam’s educational system is a rich tapestry of different components, ranging from Kindergarten and general education to vocational training and higher education programs. As the country strives to keep pace with the demands of its rapidly evolving economy and society, the popularity of short-term courses catering to soft or life skills, as well as various certification programs for national and international practices and foreign languages, has surged.

However, despite these advancements, the domain of EdTech in Vietnam remains somewhat ambiguous due to a lack of explicit definition in the legal framework. While the Vietnamese Government has initiated efforts to develop EdTech projects since the 2010s, these endeavors have primarily centered on small-scale subject-based initiatives with limited objectives, predominantly aimed at public schools.

Recognizing the regulatory obstacles and inconsistencies, the Ministry of Training and Education has now taken notice of the issue and is actively working on a draft Circular that addresses E-learning activities. To be more specific, on July 6, the Vietnamese government took a significant step by issuing Decision No. 793/QD-TTg, which entails the approval of a plan aimed at streamlining regulations for specific business activities within the education and training sector.

This decision focuses on simplifying regulations for ten key business lines in the education sector. The new simplified rules will be applicable to various educational institutions and services, including preschools, general education institutions, gifted schools, tertiary education establishments, vocational education institutions, education quality accreditation services, consulting services for studying abroad, joint training activities with foreign countries, and foreign-invested education establishments operating within Vietnam.

By streamlining regulations for these business activities, the government aims to promote growth and facilitate easier entry for investors and stakeholders in the education sector, particularly in areas like Edtech, where opportunities are expanding rapidly. This move is expected to encourage more investment in Vietnam’s education market and foster innovation in the sector.

Additionally, there are specific incentives provided to businesses investing in educational socialization facilities. Educational socialization institutions are educational establishments that fully meet the criteria outlined in Decision No. 1466/QD-TTg, 1470/QD-TTg, and 693/QD-TTg. This includes technical and technological training at professional intermediate schools and colleges. Foreign investors who invest in these fields can enjoy the incentives offered to educational socialization establishments.

To accelerate digital transformation in the field of education, the Government has further taken a proactive step by issuing Decision No. 131/QD-TTg, which formally approves the Project “Strengthening the application of information technology and digital transformation in education and training in the period of 2022 – 2025, orientation to 2030”. This ambitious project outlines the strategic development orientations and goals for digital transformation in the field of education.

Vietnam’s educational system continues to evolve and embrace innovation, marked by its proactive efforts in streamlining regulations, promoting EdTech, and driving digital transformation. The nation’s commitment to cultivating a future-ready education landscape reflects its dedication to staying at the forefront of global advancements in education and technology.

Market entry scenarios and licensing prerequisites

Market entry scenarios and licensing prerequisites are critical considerations for EdTech companies looking to establish themselves in Vietnam. Depending on the nature of their operations, EdTech investors must carefully select and apply for the appropriate business lines to ensure they adhere to the country’s regulations.

Creating and Providing Own Online Courses

If the EdTech company develops and offers its own online courses and e-learning activities to users, it must register business lines covering both educational and technological activities. This registration ensures that the company is legally permitted to provide educational services and utilize technology for its online learning platform.

Distributing Third-Party Online Courses or Operating an E-commerce Platform

For EdTech companies that act as intermediaries and distribute online courses or packages from third-party providers to users, without creating their own content, they may only need to register business lines related to technology and trading activities. However, it is crucial that the curriculum they distribute complies with all the legal requirements to avoid any regulatory issues.

Providing Technological Solutions for Classroom-Related Tasks

If the EdTech company’s primary focus is to offer technological solutions that support various classroom-related tasks, such as attendance tracking, homework assignment and grading, study progress monitoring, and access to a library of study materials, they will only need to register business lines specifically related to technology.

Understanding the appropriate business lines for registration is essential for EdTech companies to ensure they operate legally and in compliance with Vietnam’s regulations. By adhering to these licensing prerequisites, EdTech investors can enter the Vietnamese market confidently, knowing they are properly authorized to conduct their desired operations in the country.

The Registration Process of an EdTech Enterprise in Vietnam

Applying for an investment certificate in the dynamic field of Edtech demands meticulous attention to procedural excellence and the presentation of a comprehensive business plan. Prospective investors must meticulously compile an array of indispensable legal documents to initiate the process. These include a formal request for the investment project and, for individual investors, copies of their ID card or passport, while organizational investors are required to furnish their Certificate of Establishment or equivalent legal documents.

A well-crafted proposal for the investment project is then presented, encompassing vital aspects such as project goals, scope, capital, financing, location, duration, progress, labor, and a request for investment incentives. Moreover, a comprehensive assessment of the project’s impact on the social-economic landscape is essential. To substantiate the financial aspect of the application, investors can choose from a range of documents, including the most recent two years’ financial statements, commitments of financial support from parent companies or financial institutions, and proofs of financial capacity.

For projects involving land use, the application must include a request for land use, along with relevant documents like rental agreements to demonstrate the investor’s rights to the location. Additionally, if the project incorporates transfer-restricted technology, a detailed report on technology usage, covering names, origins, process mapping, and specifications of major machinery and equipment, must be provided to comply with regulations.

The time frame for establishing the company is estimated at 30-45 days, while the time required for sub-licensing depends on the type of license sought for educational institutions. Various types of sub-licenses exist in the education sector, encompassing operational licenses for international preschools, primary schools, and inter-level institutions, licenses for study abroad counseling centers, and licenses for foreign language and informatics centers.

However, it is crucial to acknowledge that there is currently no dedicated sub-license tailored exclusively to edtech investment activities. Nonetheless, when seeking to establish an educational institution, prospective investors must scrupulously adhere to Vietnam’s legal stipulations and secure the appropriate sub-license in accordance with regulatory mandates.

Final thoughts

When venturing into the EdTech market in Vietnam, foreign investors should recognize the importance of conducting a case-by-case evaluation to ensure compliance with the latest regulatory updates and protection from a company structure and statutory perspective. Each business model and activity may have unique requirements, and staying informed about the ever-changing regulations is crucial.

To do so, it is important that investors reach out to a local partner for further guidance and tailored advice on structuring their EdTech business in Vietnam. At Viettonkin, we gather a team of seasoned consulting experts who are dedicated to support investors and ensure a well-informed and legally compliant investment strategy.

For more information or to seek assistance, you can contact the Viettonkin team through the contact details provided on our website. By availing themselves of the expertise of our advisors, investors can enhance their chances of a successful and smooth market entry into Vietnam’s dynamic EdTech industry. Do not hesitate to reach out and get in touch with us now.