Foreign investors can invest the capital to establish the international high school in Vietnam[1]with the conditions and procedures as follows:
I. Conditions and requirements[2]:
To establish and operate an international high school in Vietnam, the investor and the expected high school must meet the following conditions:
1. Investment capital
At least VND50 million per student (exclusive of expenses for land use costs). The minimum total investment capital at the time of the highest expected scale is not less than VND50 billion;
Note: For the schools of which the facilities are not newly built but are leased or contributed by Vietnamese partners, the investment capital shall reach at least VND30 billion.
2. Condition of school location:
The allocated or leased location of school must be consistent with the approved educational plan of the competent authority[3].
3. Conditions of facilities and equipment:
- The school area shall be at least 06m2 per student. In which, the learning and teaching area is at least 2.5 m2 per student and there must be appropriate school rooms and specialized areas as prescribed by MOET.
- There must be clean water supply and drainage systems and appropriate bathrooms that are suitable for the scale of the school and ensure the current conditional standards of the MOET.
- There must be surrounding walls and a gate specifying the school’s name as prescribed.
4. Conditions of the education program:
- The education program shall demonstrate the educational target, without damaging the national security and public interests; without spreading religion and distorting history; without negatively affect the cultures, ethics and traditional customs of Vietnam, and shall ensure the connection between levels and grades.
- The international high schools may offer: (1) Vietnamese education program according to the Vietnam’s laws, (2) Foreign pre-school and compulsory education program and (3) Foreign short-term training programs.
5. Conditions of the teachers and the number of students in class:
- Teachers shall hold at least bachelor’s degrees in pedagogy or equivalent. The ratio of teachers shall be kept at least 2.25 teacher per class.
- The number of students shall not exceed 35 students per class. The number of Vietnamese students who participate in the foreign educational program shall be less than 50% of the total students participating such program at the school.
II. The period of operation of a foreign-invested educational institutions:
No longer than 50 years from the date on which the investment registration certificate is issued but shall not exceed the land renting period[4].
III. Procedures for approving the establishment:
The procedures that need to be conducted for international high school establishment in Vietnam as follows[5]:
- Step 1 – Applying for land allocation/ lease for location of investment project.
- Step 2 – Obtaining the investment registration certificate (“IRC”) for the investment project[6]: it will take 01 – 02 months.
In advance, the agency issuing the IRC shall get the appraisal documents from the Department of Education and Training (“DOET”) on the satisfaction of conditions as mentioned in Item 1[7].
- Step 3 – Obtaining the enterprise registration certificate (“ERC”): it will take 03 – 05 working days;
- Step 4 – Obtaining the approval of the international school establishment: it will take at least 02 – 03 months;
- Step 5 – Obtaining the license to provide education activities: it will take 01 – 02 months.
IV. Investment incentives:
Pursuant to LOI 2020, high school education is subject to receive investment incentives[8]. Accordingly, the investment project in high school establishment will be receive underneath incentives:
1. CIT incentives:
- CIT rate of 10% implied on the company’s taxable income during operation[9];
- CIT exemption for 4 years and 50% reduction of tax payable for the next 5 years[10];
- CIT exemption for the undivided income of school, which is left to invest in the development of that school under specialized laws; and grants received are used for educational activities[11];
- Education funding to school, if any, is also included in deductible expenses[12].
2. VAT incentives:
Most goods and services in education and training are not subject to VAT (i.e., teaching and vocational training services[13]; Publishing, importing and distributing newspapers, magazines, specialized bulletins, political books, textbooks, textbooks, legal documents, scientific and technical books[14], etc.).
3. Import tax incentives:
- Import tax exemption to create fixed assets[15]; and
- Import tax exemption for specialized imported goods that cannot be produced domestically and are used for education[16].
4. Land use tax/ fee incentives:
- Exemption from non-agricultural land use tax[17]; and
- Exemption from land use rent for the entire project period, at least equal to the incentives prescribed by the law on land and the law on investment[18].
V. Report regime:
The international high school must make the report obligations as follows:
1. Tax reports[19]:
- VAT returns quarterly/ monthly;
- PIT returns for employees quarterly/ monthly;
- Annual CIT and PIT returns accompanying Financial Statement.
2. Investment project reports:
The initial report, periodical quarterly and annually reports under the investment law[20].
3. Education reports:
By 30 November each year, the international school must report to the direct management authorities about the comprehensive development of the school. The report shall be submitted online and in writing[21]; and other periodical reports during operating period of school under the prevailing law on education.
[1] Article 28 of Decree No. 86/2018/ND-CP
[2] Articles 35 to 39 of Decree 86
[3] Article 33 of Decree 86
[4] Article 30 of Decree 86
[5] Article 31.3 of Decree 86
[6] Articles 38, 39 of Law on Investment 2020 (“LOI 2020”)
[7] Article 34.3, 3 of Decree No. 86
[8] Article 16.1.i of LOI 2020
[9] Article 13.2.a of Law on CIT
[10] Article 20.2 of Circular 78/2014/TT-BTC supplemented by Circular 96/2015/TT-BTC
[11] Article 4.10 of Law on CIT
[12] Article 6.2.22 Circular 78/2014/TT-BTC supplemented by Circular 96/2015/TT-BTC
[13] Article 5.13 of Law on VAT
[14] Article 15.9 of Law on VAT
[15] Article 14 of Decree 134/2016 supplemented by Article 1.7 Decree 18/2021/NĐ-CP
[16] Article 21 of Decree 134/2016
[17] Article 10.2 of Circular 153/2011/TT-BTC
[18] Decree 59/2008/NĐ-CP and Decree 59/2014/NĐ-CP
[19] Circular 80/2021/TT-BTC and Circular 151/2014/TT-BTC
[20] Article 72 of LOI 2020
[21] Article 32.6 of Decree 86
