New regulations on cooperation and investment in education sector - reform, but not thorough

After more than six years of implementation, it can be said that Government Decree No. 86/2018/ND-CP regulating foreign investment cooperation in the education sector ("Decree No. 86") has achieved remarkable results in creating a legal framework for foreign individuals and organisations to participate in the development of Vietnam's education system. However, Decree No. 86 has also revealed some shortcomings, with some provisions incompatible with practice and others not fully in line with newly enacted laws.

Source: The Saigon Times

Therefore, since 2021, the Ministry of Education and Training has been given the responsibility to lead and coordinate with relevant ministries and sectors to draft a new decree to amend Decree 86. After more than three years of preparation by the Ministry of Education and Training, on October 5^th 2024, the Government approved and issued Decree No. 124/2024/ND-CP, which amends and supplements several provisions of Decree No. 86 (“Decree No. 124”). While Decree No. 124 has made relatively significant adjustments to the provisions of Decree No. 86, there are still some unresolved issues, particularly regarding the procedures for establishing representative offices of foreign organizations and educational institutions in Vietnam. In this article, the author discusses several issues that Decree No. 124 has yet to address, and which continue to pose challenges in practice for many foreign organizations and educational institutions in practice.

Lack of forms in the establishment registration documents

Currently, according to Clause 1, Article 54 of Decree No. 86, in addition to the application form for establishing a representative office, which has an official form, other required documents such as (i) a summary report on the formation and development of the foreign organization or educational institution, (ii) a draft regulation on the organization and operation of the foreign educational representative office in Vietnam, and (iii) a document introducing the personnel to serve as the head of the foreign educational representative office in Vietnam, do not have official templates. The absence of forms, as well as the lack of specific regulations on the required contents of these documents, unintentionally creates difficulties for foreign educational institutions and organizations when establishing representative offices in Vietnam. At the same time, it also complicates the work of the relevant authorities in reviewing and evaluating the application documents and providing a basis for requesting adjustments to the documents.

The Grand Opening Ceremony of the University of Hong Kong (HKU) Representative Office in Vietnam on July 27 in Ho Chi Minh City. Source: HKU

According to the Plan for Reducing and Simplifying Regulations Related to Business Activities under the Management Functions of the Ministry of Education and Training, issued together with Decision No. 793/QD-TTg on July 6^th 2022, by the Prime Minister ("Simplification Plan"), standardizing the documents in the application file for establishing a representative office of a foreign organization or educational institution is necessary to facilitate individuals and organizations in carrying out administrative procedures, reduce processing time, and minimizing compliance costs (Section I.4, Part X of the Simplification Plan). Although the Simplification Plan was issued while the draft amendments to Decree No. 86[1] were still under development, Decree No. 124, at the time of its issuance, did not contain any provisions to regulate or adjust these aspects. This means that foreign organizations and individuals wishing to establish a representative office in Vietnam will continue to face the same challenges as they do under the current circumstances.

In particular, under the current regulations, an organization or educational institution must go through two steps to establish a representative office in Vietnam: obtaining approval from the Ministry of Education and Training (MOET) to establish the office, and registering its operations with the Department of Education and Training (DOET). These two processes should be considered together, as any "bottleneck" at either stage may delay the establishment of the representative office. Regarding the process at the DOET, there is currently a problem where foreign organizations or educational institutions are required to submit to the DOET a copy of the application for the establishment decision that has already been sent to the Ministry of Education. This is clearly an unreasonable requirement as the foreign organization or educational institution has already submitted this documentation to the Ministry when applying for approval to establish the representative office. By the time the process reaches the registration stage with the Ministry of Education and Training, the documents submitted to the Ministry have already been approved.

In response to this problem, the Simplification Plan not only recommended the standardisation of the documents to be submitted to the Ministry of Education and Training, but the Prime Minister also approved the removal of the requirement to resubmit application documents that have already been submitted to the Ministry of Education and Training (Section I.4, Part X of the Simplification Plan). In line with this, Clause 32, Article 1 of Decree No. 124 has amended the procedure by removing the need to submit a copy of the documents already sent to the Ministry when registering with the Ministry of Education and Training. However, the recommendation to standardize the documents required to be submitted to the Ministry of Education and Training was not included in Decree No. 124.

By recognising only one of the many aspects of the Simplification Plan while adjusting the same procedure for establishing a representative office, this may result in incomplete simplification of the administrative procedure for establishing a representative office. As a result, foreign investors wishing to establish a representative office in Vietnam will continue to face difficulties.

Unclear licensing criteria

According to Decree No. 86, foreign organizations or educational institutions must meet certain conditions in order to be allowed to establish a representative office in Vietnam, as outlined in Article 53. However, the provisions of Article 53 of Decree No. 86 do not set out specific criteria, and there is currently no guidance document that defines the criteria for determining whether a foreign organization or educational institution meets these conditions. For example, one requirement is that the foreign organization or educational institution must have a clear charter, objectives and purpose of operation. This is a qualitative requirement and there are no standards for assessing the clarity of the organisation's or institution's charter, objectives and purposes. In practice, organizations and educational institutions from different countries will have charters and objectives that are consistent with the regulations of their respective countries. However, if these do not comply with Vietnamese law or are not in line with the views of the relevant authorities, this condition could be considered as not met. This lack of clarity in the assessment process may lead to confusion in determining whether the conditions for approval of a representative office are met.

Source: RMIT University Vietnam

In particular, one of the challenges faced by many foreign educational organizations today is the requirement to be accredited for educational quality or recognised by the competent authority for educational quality, as stipulated in Clause 2, Article 53 of Decree No. 86. In practice, many educational organizations focus on support activities, including educational partnerships, organising certification examinations and developing educational programmes for educational institutions. These organisations do not directly provide education or training to students, and therefore it is unreasonable to require them to have accreditation certificates of educational quality. In some cases, the accreditation certificates held by these organisations, based on their actual activities, may not meet the evaluation criteria of the competent authorities in Vietnam. Requiring a document that the foreign organisation either does not have or cannot meet due to the lack of clear evaluation criteria also poses a challenge for foreign educational organizations seeking to establish a representative office in Vietnam.

It is worth noting that in Clause 15, Article 1 of the Draft Amendments to Decree No. 86, the provision in Clause 2, Article 53 of Decree No. 86 was revised to remove the requirement that foreign educational organisations must be "accredited for education quality or recognised by the competent authority for education quality". This change was seen as a necessary adaptation to current realities. However, when Decree No. 124 was issued, this proposed amendment was not included.

After a long period of preparation, Decree No. 124 will officially come into effect on 20 November 2024. However, due to the above-mentioned unresolved issues, omitted amendments, and numerous challenges in the process of establishing representative offices for foreign organisations and educational institutions in Vietnam, Decree No. 124 still falls short of fully meeting the expectations of foreign educational organisations and institutions wishing to cooperate and invest in education in Vietnam. This is also an important issue for the relevant authorities to consider, monitor and make appropriate adjustments in the near future that are more in line with the actual situation.

Read more at: Quy định hợp tác, đầu tư trong lĩnh vực giáo dục – cải cách nhưng chưa triệt để

Lawyer Nguyen Nhat Duong

HM&P Law Firm