Who Will Invest in Private Higher Education Institutions in Vietnam?

Who Will Invest in Private Higher Education Institutions?

Based on point b clause 2 Article 7 of the Law on Higher Education 2012, revised by clause 4 Article 1 of the Amended Law on Higher Education 2018, the regulations are as follows:

Higher Education Institutions

1. Higher education institutions have legal person status, including universities, academies, and other higher education institutions with names consistent with legal provisions.

National universities and regional universities are universities tasked with national strategic missions and regional development missions.

2. Types of higher education institutions include:

a) Public higher education institutions invested in by the State, ensuring operational conditions and representing ownership;

b) Private higher education institutions invested in by domestic or foreign investors, ensuring operational conditions.

A non-profit private higher education institution is a higher education institution in which investors commit to non-profit operations, as recorded in the establishment decision or conversion decision of the higher education institution type; operate non-profit, non-withdraw capital, and do not receive dividends; annual accumulated profit is collectively owned, not divided, and is reinvested to develop the higher education institution.

Conversion of private higher education institutions into non-profit private higher education institutions is allowed.

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Thus, investors in private higher education institutions are domestic or foreign investors (investors can be individuals or organizations from within the country or abroad).

Who Will Invest in Private Higher Education Institutions in Vietnam? (Image from the Internet)

Responsibilities and Authorities of Investors Establishing Private Higher Education Institutions in Vietnam

Based on Article 16 of the Law on Higher Education 2012, supplemented by clause 10 Article 1 of the Amended Law on Higher Education 2018, the responsibilities and authorities of investors establishing private higher education institutions are:

- Approve the strategy, development plan of the higher education institution, the plan to develop the university into a larger entity or merge with another university based on the proposal of the university council or the university board;

- Decide on the total investment capital of the investors, the investment and development projects of the higher education institution, the capital mobilization plans (if any); the plan of using annual revenue-expenditure surplus or loss handling plan of the higher education institution; approve the annual financial reports of the higher education institution;

- Elect or dismiss members of the university council or university board; approve the standards and personnel plans for the university's rector or university director as proposed by the university council or university board;

- Organize monitoring and evaluation of the activities of the university council or university board;

- Decide on enacting, amending, and supplementing the financial regulations of the higher education institution; approve financial matters and assets in the regulations on organization and operation of the higher education institution, salary policies, bonuses, and other benefits for management positions within the higher education institution;

- Contribute capital fully and on time and supervise the capital contribution to the higher education institution as per the establishment plan of the higher education institution;

- Establish an inspection board to inspect and supervise the management and operation activities of the university council, university board, university rector, vice-rector, university director, and deputy director, along with the units within the higher education institution. The establishment procedures, composition, responsibilities, and authorities of the inspection board shall be implemented in accordance with the Law on Enterprises 2020 and other relevant legal provisions;

- Consider and handle violations of the university council or university board that cause damage to the higher education institution in accordance with the law and the regulations on the organization and operation of the higher education institution;

- Decide on reorganization or dissolution of the higher education institution as per legal regulations;

- Publicize the list of organizations and individuals contributing capital to the higher education institution on its electronic information portal;

- Other responsibilities and authorities as stipulated by the Law on Investment and other related legal provisions;

- Investors establishing non-profit private higher education institutions shall be honored for their contributions to the establishment, building, and development of the higher education institution.

Forms of Investment for Establishing Private Higher Education Institutions in Vietnam

Based on Article 16 of the Law on Higher Education 2012, supplemented by clause 10 Article 1 of the Amended Law on Higher Education 2018, investors can choose one of the following methods for establishing private higher education institutions:

- Invest in establishing an economic organization as stipulated by the Law on Investment 2020,Law on Enterprises 2020 to allow the economic organization to establish a private higher education institution under the Law on Higher Education 2012, revised by the Amended Law on Higher Education 2018;

- Directly invest in establishing a private higher education institution under the Law on Higher Education 2012, revised by the Amended Law on Higher Education 2018.

In this case, the organization and operation regulations of the higher education institution must clear define the investors' conference and their operational methods;

The choice to apply relevant legal regulations on limited liability companies or social funds to address issues within the higher education institution not yet regulated by the Law on Higher Education 2012, revised by the Amended Law on Higher Education 2018;

The responsibilities and authorities of the investors and the inspection board must align with the regulations on limited liability companies or social funds chosen.