You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

December 6, 2021

Options for Vietnam Market Entry for International Educational Brands

Subscribe to Updates

As international integration has been one of Vietnam’s principal economic goals, the country’s demand for a highly educated labor force equipped with international-standard education has become higher and higher. As studying abroad may be financially burdensome, international-standard education offered by local entities has become a reasonable choice for many Vietnamese students. As a result, the sector has attracted more and more investors, both local and foreign.

Some popular options for global brands to enter the promising education market of Vietnam are discussed below.

1. Establishing a Foreign-Invested Educational Institution

Foreign-invested educational institutions (FIEI) include (i) short-term training institutions such as foreign language centers; (ii) kindergartens; (iii) compulsory educational institutions (primary, intermediate, or high schools or combined schools); (iv) universities; or (v) branches of foreign universities). To establish a FIEI in Vietnam, a foreign investor needs to either establish a wholly foreign-owned enterprise (WFOE) or form a joint venture company with a local partner.

The established company must have in its license a business line of providing educational services (e.g., primary education services or university education services) because Vietnam practices the doctrine of corporate ultra vires, meaning that all enterprises, including WFOEs and joint ventures, may only engage in activities (business lines) which are approved by the licensing authorities. Moreover, under Vietnamese laws, educational services are a conditional business line; thus, the established company must obtain required sublicenses for providing these services in Vietnam.

Typically, some or all of the following steps will need to be carried out for a FIEI to be established and start operating in Vietnam:

  1. Obtaining an Investment Registration Certificate (IRC). The IRC will recognize the contents relating to the investment project, such as the investor(s), project location, objectives and scale of the project, investment capital, investment incentives and restrictions, etc.
  2. Obtaining an Enterprise Registration Certificate (ERC). The ERC will provide for the corporate details such as the company name, registered office address, charter capital, owner’s details, and legal representative(s) of the company.
  3. Obtaining a decision on establishment of an educational institution.
  4. Obtaining an approval for providing educational operations.

The above licenses are granted subject to certain conditions regarding educational planning, investment capital, facilities, teachers, and the ratio of Vietnamese students.

Establishing a FIEI may be a good choice for foreign investors who want to do long-term business with stability. This method also gives investors the ability to manage and operate their businesses directly. However, the investor would likely face greater expenses in establishing, maintaining, and expanding its business in Vietnam as compared to the other methods discussed below. Moreover, establishing a company would require a greater outlay of time and resources for the foreign investor to sufficiently acquire or develop knowledge of the local market.

2. Acquisition

Acquiring equity in an existing education company is suitable for foreign investors who wish to access the Vietnam market without the need to go through the cumbersome and time-consuming process of obtaining all the licenses for establishing an FIEI as set out above. Instead, the existing education company may need to carry out procedures relating to equity investment registration, amendment of investment and corporate registration, and amendments of sublicenses regarding the establishment and operation of the educational institution.

However, Vietnamese laws currently remain silent on amendments of sublicenses regarding the establishment and operation of an educational institution due to equity acquisition by foreign investors. Thus, the required procedures may be carried out on a case-by-case basis upon obtaining guidance from the relevant authorities.

3. Franchising

Franchising is one of the fastest ways for foreign brands to have their goods or services sold in the Vietnam market. As of mid-2021, more than 260 foreign franchisors had registered to carry out franchising activities in Vietnam, mainly in the business sectors of food and beverages (42%); fashion (21%); education (9%), and retail stores (8%).

Franchising in educational services has certain advantages compared to establishing a Vietnam subsidiary. The most obvious benefit of franchising is the ability to expand a business by using the manpower, capital, and local market knowledge of franchisees, while still maintaining the ability to control the quality of the educational services. A franchisor is also able to direct how it would like the local franchisees to develop the business, such as by setting up minimum targets for opening campuses.

A foreign franchisor entering Vietnam through a franchising arrangement with a Vietnamese partner does not need to have a legal presence in Vietnam. However, the franchised business system must have been operating for at least one year in any country in the world prior to franchising.

In Vietnam, a foreign franchisor needs to register its franchising activities with the Ministry of Industry and Trade (MOIT). In practice, for franchises in educational services, the MOIT expects foreign franchisors to prove their experience in the education sector, their education method that they offer prospective franchisees, as well as their legitimate ownership over trademarks and other IP rights related to the educational franchise systems.

4. Licensing Coupled with Provision of Management Services

A foreign education company may also get brand presence in Vietnam through contractual arrangements with a local partner, including a license agreement and a management agreement. The most advantageous factor of these arrangements is that no registration procedures are required.

With regard to the license agreement, a foreign licensor might grant to the licensee in Vietnam the rights to use its brands and trademarks in connection with the educational services. For protection of the licensor’s ownership of trademarks relating to educational services, the licensor should register for protection of such trademarks in Vietnam at the Intellectual Property Office of Vietnam or through the World Intellectual Property Office as soon as possible.

In addition to granting the rights to use its brands and trademarks, the foreign licensor may enter into a management agreement with the local licensee to provide its services of management of the school bearing its brands and trademarks. It is recommended that foreign investors should conduct sufficient due diligence on potential local partners to ensure that they have the requisite licenses, facilities, manpower, capital, and other requirements necessary to meet their responsibilities and ensure the reputation and quality of the school brands. Moreover, management agreements should clearly set out the rights and obligations of each party to ensure the operation of the school in compliance with the method of the manager, the provisions on the school body (e.g., school board, head of school) and dispute resolution mechanisms, among other matters.

Related Professionals

Practices

Corporate/M&A

Location

RELATED INSIGHTS​ 

October 30, 2025
Recent events at a Thai listed company, where a proposal to remove the director was not successful, amid claims that a competitor was attempting to gain control of the company, illustrate how disputes over corporate control can unfold differently at the board level and shareholder level. At the board level, removing directors of a listed company mid-term to gain corporate control is not an easy task under Thai law, as it requires a higher threshold than appointing a new director, which typically only requires a simple majority vote in a listed company. At the shareholder level, Thailand’s tender offer and competition regimes add complexity where different shareholder groups act in concert to remove opposing board representatives or otherwise influence control. In this article, we will explore why the attempted removal of a director may fail, and how the tender offer regime may apply. Key Issues at a Glance Shareholder groups may seek to convene meetings to propose changes to board composition or company authority. Such proposals can be delayed or complicated by regulatory requirements and the need for additional disclosures. Regulatory authorities and minority shareholders may raise concerns when major shareholders coordinate to influence board control, especially if such actions could trigger tender offer or merger control obligations. Companies often respond by seeking further information on shareholder relationships and potential conflicts before proceeding. Why the Director Removal Failed Under Section 76 of the Public Limited Companies Act B.E. 2535 (as amended), the early removal of a director requires two conditions to be satisfied at the same meeting of shareholders: Headcount test: At least 75% of shareholders attending and entitled to vote must vote in favor. If multiple shareholders appoint the same person as proxy, each proxy is counted as a separate head for the purpose of the headcount test,
Read More
October 24, 2025
On October 22, 2025, the Thai government posted a directive not to grant gambling licenses for gambling involving poker nationwide to crack down on illegal gambling activities. The directive was issued by Thailand’s Ministry of Interior to align with government policies to prevent the legalization of all types of gambling businesses, including poker as a sporting activity. This will result in the revocation of poker activities as sport and institute a strict ban on such activities nationwide. Businesses should note the new government’s strict approach toward gambling activities as the legal situation regarding gambling in the country continues to draw close attention.
Read More
October 1, 2025
In September 2025, Thailand’s Securities and Exchange Commission (SEC) accused a company listed on the Stock Exchange of Thailand (SET), including its current and former directors, of concealing material information in connection with its filing registration and draft prospectus. This recent enforcement action demonstrates the serious consequences of making false statements or appearing to conceal material information in IPO filings and ongoing disclosures. In addition to being subject to criminal penalties, such actions can impact the eligibility of directors and executives to serve and may cause lasting reputational damage. Key Legal Risks The Securities and Exchange Act B.E. 2535 (1992) (as amended) imposes strict liability for making false statements or concealing material information in IPO registration statements and draft prospectuses. In such cases, investors can claim for damages, and there are also criminal penalties, including imprisonment for up to five years and substantial fines, may apply to the company, its directors, and responsible officers. However, misstatements or omissions in IPO filings do not, by themselves, disqualify directors or executives from holding office, whether arising from an SEC accusation or even a final court judgment. In contrast, for ongoing disclosures after listing, such as financial statements, annual reports, and meeting notices, false or misleading statements or concealment of material information can result in not only criminal liability but also immediate disqualification of directors and executives. If the SEC accuses a listed company or its directors or executives of such misstatements or omissions, those directors or executives are immediately disqualified from their positions, even before a final court judgment. Director and Executive Qualifications Directors and executives must meet the SEC’s specified standards of trustworthiness, as set out in the relevant rules. The SEC clearly defines characteristics that are considered to demonstrate a lack of trustworthiness. For ongoing disclosures, being involved in
Read More
September 30, 2025
Vietnam’s higher education system is at a pivotal stage of reform, with the government taking decisive steps to strengthen its policy and regulatory framework. In response to obstacles encountered during the implementation of the Law on Higher Education, issued in 2012 and amended in 2018, the third draft of the amended Law on Higher Education (Draft Law) is scheduled for submission to the National Assembly in October 2025. The Draft Law reflects the state’s commitment to aligning the education sector with international standards while addressing persistent structural challenges. The Draft Law emphasizes clarifying institutional mandates, enhancing accountability, and modernizing governance models to enable higher education institutions to operate with greater autonomy and efficiency. Against this backdrop, we outline below several notable provisions of the third draft and their potential implications for higher education institutions (HEIs) in Vietnam. Applicable Entities In addition to HEIs as defined and covered under existing legislation, the Draft Law extends its scope of applicable entities. The current Law on Higher Education does not regulate training institutions under state agencies, the armed forces, or political and social organizations, nor does it provide specific provisions for institutions offering only postgraduate education. To address this, the Draft Law introduces the term “institutions with higher education activities,” expanding its scope to include: (a) academies and research institutes established by the prime minister, mandated to provide doctoral-level training; (b) educational institutions affiliated with state agencies, political organizations, socio-political organizations, and the people’s armed forces, authorized to offer higher education programs in their specialized fields; and (c) institutions established pursuant to international treaties or by decision of the prime minister, with authorization to deliver certain levels of higher education. The inclusion of “institutions with higher education activities” represents a significant development both legally and institutionally. In an increasingly diversified higher education
Read More