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Establishment of a foreign-invested language center with the latest implementation conditions and procedures

1. What is a Foreign-invested language center?

Accordingly, Clause 3, Article 2 of Circular 21/2018/TT-BGDDT stipulates the definition of Foreign-invested language centers as follows:

Foreign language centers with foreign investment capital invested entirely or partly by foreign economic organizations or individuals to establish and ensure operating conditions as prescribed by law are allowed to use their seal and account.”

Under Clause 2, Article 2 of Decree No. 86/2018/ND-CP:

A short-term training and fostering institution is a foreign-invested educational institution, including a center for training and fostering languages, informatics, culture, skills, expertise, and professions. Training and retraining institutions established by foreign diplomatic missions or intergovernmental international organizations licensed to operate in Viet Nam.”

Thus, based on the nature of operations, it can be understood that a Foreign-invested language center is an institution that conducts activities to teach foreign language skills, invested and contributed by foreign investors, who are individuals and organizations, and ensure operating conditions are prescribed by law.

2. Relevant legal basis for the establishment of a Foreign-invested language center

Enterprise Law 2020;

Investment Law 2020;

Decree No. 86/2018/ND-CP on foreign cooperation and investment in the field of education;

Circular No. 21/2018/TT-BGDDT on organization and operation regulations of foreign language and informatics centers.

3. Conditions for the establishment and operation of a Foreign-invested language center

Education activities at foreign-invested educational institutions are conditional business lines. A foreign language center belongs to a short-term training institution aiming to train and foster foreign language knowledge.

First, the conditions for investment capital specified in Clause 3, Article 35 of Decree No. 86/2018/ND-CP:

Investment projects for the establishment of short-term training and retraining establishments must have an investment rate of at least  20 million VND/student (excluding land-use costs). The minimum total investment capital is calculated based on the time with the highest expected scale.

For foreign-invested educational institutions that do not build new facilities but only rent them out or have capital contributed by the Vietnamese party with existing facilities to carry out their operations, the minimum investment must reach 70% of the levels specified in Clause 3, Article 35 of Decree No. 86/2018/ND-CP.

Secondly, the conditions on facilities are specified in Clause 1, Article 36 of Decree No. 86/2018/ND-CP:

– Having appropriate classrooms in terms of lighting, furniture, equipment, and teaching aids;

– Having an area used for study and teaching to ensure an average of at least 2.5m2/learner for short-term training and retraining institutions;

– There are offices for the board of directors, leader’s rooms, teacher’s rooms, libraries, and other functional rooms.

Note: Foreign-invested educational institutions are allowed to rent stable facilities for a period of at least 05 years and must ensure that their facilities meet the above regulations.

Third, about the educational program in Article 37 of Decree No. 86/2018/ND-CP:

– The educational program conducted at the foreign-invested educational institution must show the educational objectives and must not contain any content harmful to national defense, security, or community interests; it must not propagate religion or distort history; it must not adversely affect the culture, morality, fine customs, and traditions of Vietnam; and it must ensure the connection conditions between education levels and training levels.

– Foreign-invested educational institutions may organize the teaching of:

+ Education program of Vietnam by the Vietnamese Law;

+ Short-term training and retraining programs in foreign countries.

Fourth, the conditions for the contingent of teachers are specified in Clause 1, Article 38 of Decree No. 86/2018/ND-CP:

– Teachers must have at least a college degree or equivalent and a training discipline suitable to their assigned teaching expertise;

– The maximum student/teacher ratio is 25 student/teacher.

Fifth, the conditions for permitting educational activities, Clause 1, Article 45 of Decree No. 86/2018/ND-CP:

Having a decision permitting the establishment of an educational institution or an investment registration certificate and an enterprise registration certificate for short-term training and retraining institutions.

– Conditions for issuance of the Investment Registration Certificate:

According to Clause 2 and Article 38 of the Investment Law 2020, for investment projects that are not subject to the approval of investment policies, investors must meet certain conditions to be granted an Investment Registration Certificate.

– Conditions to be granted an Enterprise Registration Certificate:

According to Clause 1, Article 27 of the Enterprise Law 2020, an enterprise is granted an enterprise registration certificate when it fully meets the following conditions:

+ The registered business lines and trades are not banned from business investment;

+ The enterprise’s name is named by the provisions of Articles 37, 38, 39, and 41 of the Enterprise Law;

+ Having a valid enterprise registration dossier;

+ Fully pay the business registration fee by the law on fees.

See relevant procedure:

Registration of the establishment of a two-member limited liability company

Registration of the establishment of a one-member limited liability company owned by an individual

Registration of the new establishment of a one-member limited liability company owned by an organization

Registration of the establishment of a joint stock company

4. Order and procedures for establishing and operating Foreign-invested language center

According to Article 31, Article 48 of Decree No. 86/2018/ND-CP, the procedures for establishing and operating foreign-invested language centers are as follows:

Step 1: Apply for an Investment Registration Certificate

See relevant procedure:

Procedures for the issuance of an Investment Registration Certificate for projects not subject to the approval of investment policies

Procedures for granting Investment Registration Certificates for projects not subject to the approval of investment policies Management

Step 2: Apply for a license to operate a foreign language center

See relevant procedure: Permit the operation of preschool educational institutions, general education institutions, and foreign-invested short-term training and retraining institutions in Vietnam.

5. Some issues to keep in mind when establishing and operating Foreign-invested language centers

Firstly, according to the provisions of Article 30 of Decree No. 86/2018/ND-CP, “The operation term of a foreign-invested educational institution shall not exceed 50 years from the date of issuance of the registration certificate investment but not longer than the land lease term.

Secondly, according to the provisions of Article 29 of Decree No. 86/2018/ND-CP on naming foreign-invested educational institutions:

– For short-term training and retraining institutions, the name must include the constituent elements arranged in the following order: “education or Training center”, “Major training branch or group” and the proper name;

– The proper name of the foreign-invested educational institution must not coincide with or cause confusion with the name of the registered educational institution or the name of the enterprise implementing the investment project; do not use words and signs that violate the historical, cultural, ethical, and fine traditions of the Vietnamese nation;

– The foreign-invested educational institution has its transaction name in Vietnamese and its international transaction name in English (or in another common foreign language) with equivalent content.

Thirdly, the rights and obligations of foreign-invested informatics centers are specified in Article 32 of Decree No. 86/2016/ND-CP:

– To have their legitimate rights and interests protected by the provisions of Vietnamese law and international treaties to which Vietnam is a contracting party;

– Subject to the territorial administrative management of the People’s Committee of the province; operates and is subject to state management by Vietnamese law;

– Publicly implement education quality commitments, conditions for quality assurance, and financial revenue and expenditure. Be responsible for refunding learners’ expenses paid in the case of providing training programs that do not guarantee the educational quality as committed;

– Ensuring the legitimate rights and interests of learners, officials, lecturers, teachers, and employees in case of termination or forced termination of activities before the deadline;

– Create favorable conditions for the operation of political organizations and socio-political organizations established and operating under Vietnamese law at foreign-invested educational institutions;

– Before November 30 of each year, report directly to the state management agency on the comprehensive development of the establishment and give full explanations when requested by the state management agency. The report includes the following main contents: the implementation of the decision to allow the operation; organizational structure; teachers and lecturers; the number of enrollments; the organization of teaching and learning; and the academic results of the students. students, students, graduate students, doctoral students, number of graduates, graduation rate, diplomas awarded, financial statements, difficulties and advantages in the process of implementation, proposals, and requests The reporting is done online and in writing.

– Other rights and obligations as prescribed by Vietnamese law.

Fourth, based on Clause 3, Article 34 of Decree No. 86/2018/ND-CP:

For investment projects on the establishment of short-term training and retraining establishments, preschool educational institutions, general education institutions, and investment registration certificate-issuing agencies, they must obtain appraisal opinions from the Department of Education and Training.

Fifth, based on Clause 2, Article 51 of Decree No. 86/2018/ND-CP, stipulating that a foreign-invested language center will be dissolved and terminated in the following cases:

– At the request of organizations or individuals establishing foreign-invested educational institutions, branches of foreign-invested higher education institutions;

– Serious violations of the law or regulations on the management, organization, and operation of the educational institution or its branch;

– After the suspension period stated in the decision on suspension of educational activities, the cause leading to the suspension cannot be remedied;

– The objectives and contents of the operation in the decision to permit the establishment of the decision to permit the operation are no longer consistent with the requirements of the socio-economic development of the country;

– Failure to properly perform the commitments shown in the approved project after 5 years from the effective date of the decision on establishment or approval of the establishment.

Sixth, under Clause 2, Article 50 of Decree No. 86/2018/ND-CP, stipulates that Foreign-invested language centers shall be suspended from educational activities when committing one of the following violations:

– Having fraudulent acts to establish, authorize the establishment, or permit educational activities;

– Failing to satisfy one of the conditions to be permitted to conduct educational activities specified in this Decree;

– Persons who permit educational activities without authority;

– Violating the provisions of the law on education shall be administratively sanctioned to the extent that the operation must be suspended;

– Other cases as prescribed by law.

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Establishment of a private foreign language center and the latest implementation procedures

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