Vietnam's education system is increasingly witnessing the diversity of types of private educational institutions with different sizes and ways of operation. This development comes with a stricter requirement to comply with legal conditions in order to remain operational. Practice shows that when these conditions are ignored or not fully met, the legal consequences can be very serious, such as the case of the American International School Vietnam ("AISVN").
AISVN's scandal[1]
AISVN was established in 2006 in Hiep Phuoc Commune, Ho Chi Minh City and operates under the model of a multi-level private school. From September 2023, many parents have reflected on their signing of interest-free loans to AISVN with the condition that their children are exempt from tuition fees during their time at school. However, after completing the study program or completing the transfer procedure, AISVN still does not refund the above amount according to the agreement.
On March 30, 2024, in a meeting between parents and the school council to solve difficulties in operation, with the participation of the Department of Education and Training ("DOET") and the Ho Chi Minh City Police, AISVN called on parents to contribute about VND 125 billion to be able to repay teachers' salaries and operate until the end of June. but only raised more than 31 billion VND.
On June 28, 2024, after continuously organizing many working sessions with AISVN but still unable to resolve the situation, the Department of Education and Training of Ho Chi Minh City issued Decision No. 2042/QD-SGDDT on suspending AISVN's operations for 12 months from July 1, 2024 on the grounds of violating the Law on Education 2019 and Decree 46/2017/ND-CP ("Decree 46"), in particular, (i) there are not enough financial resources as prescribed to ensure the maintenance and development of educational activities, and (ii) the number of managers is insufficient to implement educational programs and activities.
On June 18, 2025, AISVN issued a written report and an application for an extension of the suspension period of educational activities until June 30, 2026. However, the document of this unit has not stated a solution to remedy the violation, which means that even though the suspension period is almost over, AISVN still cannot overcome the problem. At the same time, reports from other agencies and departments also show that AIS American International Education Joint Stock Company (an investor of AISVN) and AISVN also recorded a debt of nearly VND 31 billion in insurance money, did not pay taxes on time and did not report the use of labor as prescribed.
Facing this situation, on July 9, 2025, the Department of Education and Training of Ho Chi Minh City issued an official letter reporting on the situation of AISVN and submitted it to the People's Committee of Ho Chi Minh City for consideration and decision to dissolve this school[2].
Outstanding legal issues
AISVN's activities along with the recent dissolution proposal of the Ho Chi Minh City Department of Education and Training highlight the legal issues surrounding education activities in Vietnam.
Conditions for educational activities
Decree 46 is a legal document that takes effect at the time the Department of Education and Training of Ho Chi Minh City issues a decision to suspend the operation of AISVN. Accordingly, Article 27 of this Decree stipulates that a public or private school must meet 07 conditions to be allowed to conduct educational activities, including: (i) having a decision to establish or permit the establishment of a competent person; (ii) meet the requirements for land, schools, facilities and equipment; (iii) ensuring the area and location of the school; (iv) have an educational program and teaching materials; (v) having a contingent of teachers and administrators who meet the standards of quality and qualifications, and at the same time sufficient in quantity according to the structure of teacher types; (vi) have financial resources to maintain and develop educational activities, even though no specific minimum financial level has been set; and (vii) have regulations on organization and operation of the school. With AISVN still having debts, leading to many teachers quitting their jobs and failing to ensure the number of personnel as prescribed, the reason stated in Decision No. 2042/QD-SGDDT on the suspension of the school's operation is legally based.
At the present time, Decree 46 has expired and is replaced by Decree 125/2024/ND-CP ("Decree 125") effective from November 20, 2024. Article 27 of the new Decree still maintains basically the same conditions for educational activities as Decree 46, but removes the requirement on the decision to establish or permit the establishment, and concretizes the criteria for financial capacity. For private schools such as AISVN, the minimum investment level must reach 50 million VND/student (excluding land use costs) and the total capital is not less than 50 billion VND, in case of only renting or using available facilities, the minimum investment level must be equal to 70% of the above regulations.
The clear regulation of investment capital and the ability to maintain financial activities as mentioned above will make it easier for the management agency to identify and prove the status of not meeting financial conditions. At the same time, it can be seen that if Decree 125 is applied to evaluate, AISVN still does not meet the standards of conditions for educational activities.
The Ho Chi Minh City Department of Education and Training has proposed that the Municipal People’s Committee dissolve the American International Primary, Secondary, and High School. Source: The Saigon Times
What is the legal basis for the dissolution of AISVN?
Unlike Decree 46 which specifies each case of dissolution of an educational institution, Decree 125 no longer lists in detail but refers to the cases of dissolution specified in Clause 2, Article 51 of the Law on Education 2019. In general, these legal documents agree on the principle that schools can be dissolved if the suspension period has expired but still cannot overcome the causes of suspension.
Another notable change is that according to Decree 46, if a private school is dissolved due to failure to remedy the reasons for suspension, the organization or individual establishing the school must make a dissolution plan, including measures to ensure the legitimate rights and interests of students. teachers, administrators and staff[3]. However, Decree 125 has abolished this provision, instead giving the entire responsibility of organizing the formulation of the dissolution plan to the Department of Education and Training, including ensuring the interests of relevant subjects[4]. Thus, the dissolution of the school now no longer depends on the organization or individual establishing the school, instead, the Department of Education and Training where the school is located has the right to take necessary legal measures to submit to the People's Committee for promulgation of the decision on the dissolution of the school.
What investors and schools need to pay attention to
The AISVN case is a "case study" for investors in the education sector, especially education activities with foreign elements, to draw lessons for themselves in the process of investment and business. To avoid legal risks, investors need to pay attention to ensuring conditions for educational activities right from the beginning of establishment and maintaining them throughout the operation period. At the same time, it is necessary to strictly comply with the regime of periodic reporting to State management agencies, proactively review, detect and promptly remedy shortcomings before and when handling measures are applied.
In addition, investors should establish a mechanism for regular legal, financial and professional internal audits, develop a crisis response plan to minimize losses in the event of a legal or financial incident. These measures not only help maintain stable operations but also contribute to ensuring the interests of students, parents and staff.
The case of suspension and proposal to dissolve AISVN is not only an internal story of an international school but also a strong message from the management agency about the requirement to comply with the law in private education. Only by ensuring adequate operating conditions and maintaining transparency of management responsibilities can educational institutions develop in the long term, protecting their own reputation and the legitimate interests of Vietnamese students, parents and teachers.
Lawyer Nguyen Nhat Duong - Chu Le Quynh Ngan
HM&P Law Firm
[1] Labor Online Newspaper (2025), Overview of the scandal at the American International School, accessed on August 18, 2025.
Tuoi Tre Online Newspaper (2025), Department of Education and Training of Ho Chi Minh City. Ho Chi Minh City proposes to dissolve AISVN International School, accessed on August 18, 2025.
[2] https://thesaigontimes.vn/de-xuat-giai-the-truong-quoc-te-my-sau-12-thang-bi-dinh-chi/, accessed on 18/08/2025.
[3] Point a, Clause 4, Article 31 of Decree 46.
[4] Clause 3 and Point a, Clause 4, Article 31 of Decree 125.
