In the international integration era, the establishment and operation of foreign-owned language centers in Vietnam have become a growing trend, because it meets the demands for language learning and proficiency improvement among Vietnamese citizens. However, to ensure lawful operation, such centers must comply with specific legal regulations regarding conditions, procedures, and other requirements. This article provides an overview of foreign-owned language centers, clarifies relevant legal regulations, and addresses common concerns regarding their establishment and operation.
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In the international integration era, the establishment and operation of foreign-owned language centers in Vietnam have become a growing trend, because it meets the demands for language learning and proficiency improvement among Vietnamese citizens. However, to ensure lawful operation, such centers must comply with specific legal regulations regarding conditions, procedures, and other requirements. This article provides an overview of foreign-owned language centers, clarifies relevant legal regulations, and addresses common concerns regarding their establishment and operation.
I. Understanding foreign-owned language centers
Foreign-owned language centers are educational institutions established by foreign organizations or individuals in Vietnam, offering language courses to both Vietnamese learners and foreigners residing in the country. These centers are highly regarded for their native-speaking instructors, modern teaching methods, and practical learning programs that enhance students’ communication and language skills effectively.
The establishment and operation of these centers must comply with Vietnamese legal regulations, including registration, licensing, and quality assurance standards. Beyond providing language education, foreign-owned language centers contribute to exchanging culture, learning new knowledge, and understanding about the international communities. However, to operate legally, they must meet specific requirements regarding establishment conditions, facilities, faculty qualifications, financial obligations, and reporting duties to State authorities.
II. Legal regulations on foreign-owned language centers
1. Definition of a foreign-owned language center
Pursuant to Clause 3, Article 2 of the Regulation on the organization and operation of Foreign language and Computer training Centers, issued under Circular 21/2018/TT-BGDDT, the legal status of language and computer training (informatics) centers is defined as follows:
- A foreign-invested language or informatics center is established with full or partial capital investment from foreign individuals or economic organizations, ensuring compliance with legal operational conditions. These centers are permitted to use their own seal and maintain an independent bank account.
Thus, foreign individuals are eligible to establish language centers in Vietnam, meaning they can set up and operate their own language centers for business purposes.
2. Conditions for establishing foreign-owned language centers
To establish and operate a language center, certain legal conditions must be met under Vietnamese law. According to Clauses 1 and 2, Article 48 of Decree 46/2017/ND-CP, as amended and supplemented by Clause 21, Article 1 of Decree 135/2018/ND-CP, conditions for operating a language and informatics center in education are as follows:
(1) The center must have a team of administrators, teachers, and staff who meet required professional standards and fulfill operational needs of the center.
(2) The center must have adequate and appropriate facilities, equipment, curricula, teaching materials, and financial resources ensuring its educational quality as objectives, development plans, and operational scale of the center.
These conditions must be confirmed in the application dossier for the Establishment License through documents.
As a result, not all individuals or organizations are eligible to open language centers. To be established and operated legally, language centers must fulfill all the conditions stipulated by law.
3. Procedures for establishing foreign-owned language centers
Step 1: Preparing a dossier
Foreign individuals wishing to establish language centers are required to prepare the required documents as stipulated in Clause 2, Article 49 of Decree 46/2017/ND-CP, as amended by Clause 22, Article 1 of Decree 135/2018/NĐ-CP. A dossier for issuing the Establishment License includes:
(i) A proposal for educational activities;
(ii) A certified copy from the original book, a notarized copy from the original, or a copy along with the original for verification of the establishment decision issued by the competent authority;
(iii) The center’s operation regulations;
(iv) A report detailing the center’s facilities, equipment, curricula, and teaching materials; a team of administrators and teachers; legal documents proving land and building usage rights; and financial resources ensuring the center’s operations.
Step 2: Submitting the dossier
Pursuant to Point a, Clause 1, Article 49 of Decree 46/2017/ND-CP (as amended by Clause 22, Article 1 of Decree 135/2018/ND-CP), the competent authority responsible for approving educational activities is the Director of the Department of Education and Training (DOET) in which the language center is to be established.
Accordingly, as per Point a, Clause 3, Article 49 of Decree 46/2017/ND-CP, the language center submits the complete application dossier stated in Step 1 either directly or via postal mail to the Director of the Department of Education and Training in the respective location for approval.
Step 3: Receiving the dossier
Based on Point b, Clause 3, Article 49 of Decree 46/2017/ND-CP, within five (05) working days from the date of receiving the dossier, the Director of the Department of Education and Training will review the dossier. If the dossier is incomplete or does not comply with regulations, the agency will notify the language center in writing, specifying required amendments or additional documents.
Step 4: Issuance of the operating License
Pursuant to Point c, Clause 3, Article 49 of Decree 46/2017/ND-CP, within ten (10) working days from the date of receiving a complete and valid dossier, the Director of the Department of Education and Training, in coordination with relevant authorities, will conduct an actual assessment to verify compliance with the legal requirements and record the results in an evaluation report.
As per Point d, Clause 3, Article 49 of Decree 46/2017/NĐ-CP, within five (05) working days from the date of the evaluation result, the Director of the Department of Education and Training will issue a decision granting the language center to operate. If the center is not approved for operation, the Department of Education and Training will issue a written notification stating the reasons for the rejection.
III. Frequently asked questions about foreign-owned language centers
1. Can the foreign-owned language center be transferred?
The transfer of the language center essentially involves the transfer of shares in the case of the joint-stock company. According to Clause 1, Article 127 of the Law on Enterprise 2020, shares may be freely transferred unless otherwise specified in Clause 3, Article 120 of this Law. Specifically, if shareholders pass away, their heirs (by will or by law) will become shareholders of the company.
For language centers operating as the limited liability company (LLC), it means the transfer of capital contributions. Based on Clause 1, Article 52 of the Law on Enterprise 2020, members of the multi-member LLC have the right to:
(i) Transferring part or all of their capital contributions to other entities;
(ii) Offering their capital contribution to existing members;
(iii) Transferring to non-members if the existing members do not purchase or do not fully purchase the offered shares within 30 days from the date of the offer.
2. Can the foreign-owned language center have the same name as another center?
Pursuant to Clause 2, Article 4 of Circular 21/2018/TT-BGDDT, name of a language center must follow these principles:
(i) The title of “Language Center” or “Informatics Center” + an unique name;
(ii) The unique name must not be identical to one of an already established center and must not contain words or symbols that violate historical, cultural, ethical, or traditional customs of Vietnam;
(iii) The center must have both a Vietnamese trade name and an international trade name in English (or another commonly used foreign language) with equivalent meaning;
(iv) The center’s name must appear on its establishment decision, official seal, signage, and all transaction documents.
Thus, the unique name of the foreign-owned language center must not be identical to one of any previously established centers.
3. Can someone else be a nominee when establishing the foreign-owned language center?
Regarding the responsibility of a Director of the language center, Clause 1, Article 6 of the Regulation on the Organization and Operation of Language and Informatics Centers (issued under Circular 21/2018/TT-BGDDT) states: A center’s director is a person directly managing and operating an organization, and responsible before the Law and the superior management authority for all activities of the center.
Accordingly, a person whose name is used to establish the language center (i.e., the Director) takes direct management and operational responsibilities and is legally accountable for all activities of the center. Therefore, if a nominee is used to establish the center, such an individual will be held legally responsible for all center operations.
4. Can a foreign teacher with only a college degree specializing foreign languages teach at the language center?
Pursuant to Clause 6, Article 18 of the Regulation on the Organization and Operation of Language and Informatics Centers (issued under Circular 21/2018/TT-BGDDT), a foreign language teacher must meet one of the following criteria:
- (a) Holding a college degree or higher in foreign language pedagogy;
- (b) Holding a college degree or higher in a foreign language and a suitable language teaching certificate;
- (c) Holding a college degree or higher and a language proficiency certificate of level 5 or above (according to Vietnam’s 6-level language proficiency framework or an equivalent standard), along with a suitable language teaching certificate.
Accordingly, teachers at the language center are responsible for teaching and guiding practice sessions, including permanent teachers and contract teachers, who may be foreign nationals. Thus, if the foreign teacher only holds the college degree in a foreign language, they do not meet the qualifications required to teach at the center.
5. Does the foreign-owned language center have to report its financial income and expenses?
Based on Clause 2, Article 30 of the Regulation on the Organization and Operation of Language and Informatics Centers (issued under Circular 21/2018/TT-BGDĐT): The center must publicly disclose and be accountable for its commitments to education quality, actual education quality, conditions ensuring education quality, and its financial income and expenses in accordance with current regulations.
Furthermore, foreign-owned language centers fall under the regulatory scope of Clause 2, Article 1 of Circular 21/2018/TT-BGDDT. Therefore, these centers operating in Vietnam are required to report and justify their education quality assurance conditions and financial income and expenses as per legal requirements.
Establishing foreign-owned language centers in Vietnam requires compliance with various legal regulations and involves complex document preparation and procedural requirements. Even a minor mistake can result in application rejection or delay of the process. Thus, a professional lawyer is essential to ensure clarity in understanding the legal framework and following the correct procedures.
NPLAW is a reputable legal consulting firm specializing in assisting clients with document preparation and handling procedures related to foreign-owned language centers. The team of lawyers at NPLAW is committed to providing professional, prompt, and efficient services, helping you save time and costs. For legal consultation, you can contact NPLAW via:
