Education investors miss $3 billion market for overseas study

  • by VNBUSINESS
  • December 16, 2015

Vietnamese spend $3 billion every year to pay for their children’s study overseas, but the local education market has not been able to take advantage of this spending. 
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Vietnamese spend $3 billion every year to pay for their children’s study overseas
Hoa, a parent in Ninh Binh province, said she has to pay VND300 million a year to fund her son’s study in Singapore. Hoa and her husband have to work hard to save money and live away from their son, but they don’t regret their decision to send their child to Singapore.

“We want him to grow up well, have good basic knowledge and good English skills. But we don’t think our son can get these things from Vietnam’s education,” she explained.

A lot of investors want to set up education establishments in Vietnam which can provide education services in accordance with international standards, where the parents like Hoa can send their children and where students can receive a high quality education without needed to go abroad.

$3.6 billion worth of FDI in education had been registered by November 2015

However, legal barriers have made the investors cautious.

Nguyen Kim Dung from Apollo, a well-known foreign language center in Vietnam, complained that the administration procedures are very complicated. 

Foreign investors have to apply for three different licenses – investment, establishment and operation licenses. Applying for the license to establish education establishments proves to be the most time consuming because investors have to go through a lot of agencies.

Dung said investors are required to show the profiles of teachers, including the work permits. This means that education establishments have to employ teachers, sign labor contracts and ask for work permits for teachers before the establishments begin their operation.

A report of the Vietnam Business Forum’s Education & Training Working Team showed that under WTO commitments and the Investment Law, Vietnam encourages foreign investors to invest in the education sector. However, other legal documents hinder the investment.

The report showed investors complained that it was hard to follow all the complicated procedures requested, and this is contrary to the government’s and National Assembly’s instructions on simplifying administration procedures.

Under the current regulations, the number of Vietnamese students must not be higher than 10 percent at international primary and secondary schools and 20 percent at high schools. The limitation set by the government was seen as “unreasonable” by foreign investors.

Phan Manh Hung, legal director of Kinderworld Group, noted that the demand of Vietnamese students for going to international schools has increased rapidly, and with such regulation, it is nearly impossible to set up international schools in provinces and cities outside Hanoi and HCM City. These areas do not have many expats.

A report of the Ministry of Planning and Investment (MPI) showed that only $3.6 billion worth of FDI in education had been registered by November 2015.

Source: VietNamNet

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