Written by Duyen Ha Vo and Dan Thanh Tran

The Vietnamese Government has issued Decree 124/2024/ND-CP (Decree 124), introducing important amendments to the existing regulations set forth in Decree 86/2018/ND-CP.  These regulations govern foreign-invested institutions which deliver pre-school, K-12 or higher education (education institutions), foreign-invested short-course training institutions (training institutions), educational linkages and training linkages.

Decree 124 reflects the principles set forth in Politburo Conclusion No. 91-KL/TW of August 12, 2024, which encourages domestic educational institutions to partner with leading institutions worldwide and aims to attract reputable international universities to establish branch campuses in Vietnam. The decree’s objectives are twofold: first, to raise standards and operational requirements for foreign-invested institutions, educational linkages, and training linkages in areas such as capital investment, curriculum quality, and teacher qualifications; second, to streamline administrative and reporting processes for investors, enhancing both transparency and national competitiveness.

This article examines the key changes introduced by Decree 124 and their impact on foreign investors in Vietnam’s education and training sector.

Decree 124 will take effect on November 20, 2024.

1.      Expanded Scope of Educational Linkages

Decree 124 broadens the definition of “educational linkages” by allowing Vietnamese private educational institutions (pre-school and K-12 schools) to collaborate not only with foreign “education institutions” but also with foreign “education organizations,” defined as organizations providing educational programs established abroad.

Educational linkage refers to the collaboration between a Vietnamese pre-school and/or K-12 institution and a foreign education institution or education organization to deliver an integrated curriculum in Vietnam.

Please note that the regulations distinguish between “educational linkages” and “training linkages.” Training linkages refer to collaborations between a Vietnamese university and a foreign university to deliver courses that lead to degrees or certificates without creating a new legal entity. In a training linkage, the foreign partner must be a foreign university, and Decree 124 maintains this requirement.

2.      Stricter Requirements for Foreign Partners in Educational Linkages

Decree 124 introduces stricter requirements for foreign partners (including education institutions and education organizations) in educational linkages. They must have a minimum of five years of continuous operation in the offered education programs and comply with local laws in their home countries before applying for educational linkage approval.

Additionally, if the partner is a foreign education institution, its education programs must be officially recognized or accredited in its country of origin.

3.      Relaxed Location Restrictions for Training Linkages

Decree 124 permits training linkage programs to be taught not only at the main campus of the Vietnamese university as under current regulations but also at its other licensed branch campuses.

4.      Capital Injection Requirements for Foreign-Invested Education Institutions

For foreign-invested educational institutions, Decree 124 maintains the current requirement that a project establishing a K-12 school must invest at least 50 million VND per student, with a minimum total investment of 50 billion VND.  However, it adds that at least 50% of the total investment must be realized at the time when educational operations are appraised for approval, with the investor committing to fulfill the remaining investment capital requirement within five years.

5.      Curriculum Requirements for Foreign-Invested Education Institutions

Decree 124 increases curriculum standards for foreign-invested education institutions, including:

• The education program must be accredited in its home country, have been actually adopted for at least five years, and be approved for use in Vietnam by the program owner.
• The program must exclude content that could harm national security, public interests, or Vietnamese cultural values, and must avoid promoting religion or distorting history.
• It must ensure continuity across educational levels, allow student transitions to public schools, and align with Vietnam’s educational objectives.

6.      Branch Campus of Foreign University

Decree 124 raises the required standards for a foreign university to establish a branch campus in Vietnam by requiring it to be ranked among the top 500 higher education institutions in reputable global university rankings for at least one of the preceding three years.

7.      Tightened Requirement on Foreign Language Teachers

Decree 124 adds the requirement that foreign teachers in training institutions must hold at least college degrees or equivalent.

8.      Streamlining License Procedures

Decree 124 simplifies 14 of the 21 application forms from Decree 86/2018/ND-CP and introduces online submissions and data sharing among government agencies. This change aims to reduce the administrative burden on investors, removes unnecessary regulations, and enhances transparency to improve the investment climate in education.

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Vietnam’s approach to foreign investment in education has evolved significantly. The Government first allowed foreign-invested education institutions in 2000, though initially they could only serve children of foreign expatriates in Vietnam. The first comprehensive regulation expanded market access in 2012, allowing a wider range of foreign-invested institutions and international linkage programs. Since then, Vietnam has continued to update and improve these regulations, with Decree 124 being the latest development.  

By 2022, with a population of around 97 million — half of whom were under 30 years old —Vietnam had over 3,800 private education and training institutions, approximately 17% of which were foreign-invested.  However, most of these institutions are preschools and training institutions (including EdTech, with Vietnam ranking among the top 10 fastest-growing EdTech markets globally since 2019). Private K-12 and higher education institutions still represent a small fraction of the country’s overall K-12 and higher education system. With Decree 124, Vietnam aims to become a dynamic hub for educational investment, enhancing both the quality and diversity of educational opportunities available within its borders.