A foreign invested language center: Establishment conditions and practice notes

The article concentrates on the establishment conditions and practice notes in regard to a foreign invested language center in Vietnam.

Nowadays, together with the international integration of Vietnam in all fields, the demand for learning foreign languages of the Vietnamese has more and more increased. As a result, the establishment of foreign language centers has become a favorable investment, especially foreign-invested ones (“Center”).

According to the WTO commitment No. 318/WTO/CK, foreign language training service may be classified under CPC 929 (other education services). Vietnam has committed to open freely and unlimitedly from 01^st January 2009. Therefore, any foreign investor from a country of WTO members can establish a Center with maximum foreign capital up to 100%. However, as education is a conditional sector under Appendix 4 of Law of Investment No. 61/2020/QH14 (“LOI”), when establishing a Center, foreign investors have to additionally meet conditions prescribed by LOI and relevant documents such as Decree 86/2018/ND-CP on foreign cooperation and investment in education (“Decree 86/2018”).

Pursuant to Decree 86/2018/, there are two licenses to be chronologically applied for a Center to start educational activities in Vietnam. They are: (i) an investment registration certificate for the Center establishment issued by Department of Planning and Investment; and then (ii) a decision on approval for provision of educational services of Center issued by the Director of Department of Education and Training.

The conditions of the Center establishment are summarized as below:

In conclusion, BLG recommends that investors should prepare carefully from the initial steps to ensure procedures are handled smoothly. Here are notes for your consideration:

First of all, the choice of the Center’s location is one of the lifeblood of the success of the Center's establishment. The Center’s location is not allowed to be located in the building which is planned for the purpose of living. Besides, the investors are required to carefully prepare the location's legal aspects. Specifically:

• In case the premise is under its use right, it must have a certificate of land use rights, ownership of houses and other land-attached assets ("LURC") issued by the competent authority as evidence;
• In case the premise is rented, the investors must enter into a lease agreement with the lawful landlord with a valid LURC. In addition, the lease agreement should be notarized at the Notary Public/Notary Office to increase the legal guarantee for the transaction.

One thing is fairly important that the Center shall have a parking lot for teachers, parents and students. It may be arranged at suitable areas in or outside the Center but must ensure safety and security.

In addition, the investors should determine the training scale, the target audience (e.g preschool children, primary school students, middle school students, high school students, students or working people) and build the educational program (e.g teaching communication or certified exam teaching or both) from the early stage of investment. The determination of the above criteria will affect the total investment capital, the Center's area, the orientation of teacher selection, and the development of curricula and training programs.

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