Investors in the field of education in Vietnam

Investors in the field of education in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Investors in the field of education in Vietnam

According to Clause 1, Article 54 of the Education Law 2019, investors in the field of education consist of:

- Domestic investors, including Vietnamese citizens, organisations established in accordance with Vietnamese law;

- Foreign investors, including citizens of foreign countries, organisations established in accordance with foreign law.

2.  Rights and responsibilities of investors in the field of education in Vietnam

According to Clause 2, Article 54 of the Education Law 2019, rights and responsibilities of investors are prescribed as follows:

- Approve development plans of the school as prescribed by law and proposed by school council;

- Decide total capital contributions of investors, school investment projects, mobilization of capital (if any); plans on use of annual discrepancies between incomes and expenditures or on handling losses of the school; approve annual financial reports;

- Vote or appoint, dismiss and remove members of school council;

- Organize the supervision and evaluation of school council’s operation;

- Decide promulgation and amendment of financial regulations; approve matters related to finance and assets in the organisational and operational regulations of the school;

- Contribute capital fully and timely, supervise capital contributions to the school in compliance with the establishment proposal;

- Consider, handle violations by school council that result in losses as prescribed by law and by organisational and operational regulations of the school;

- Decide reorganization, dissolution of the school as prescribed by law;

- Publish a list of organisations and individuals that make contributions of capital on the online website of the school;

- Founding investors of not-for-profit private schools are honoured for their capital contributions to the establishment, construction and development of the school.

3. Methods of establishing private educational institutions with investors

According to Clause 3, Article 54 of the Education Law 2019, founding investors of private educational institutions may choose one of the following options:

- Invest in the establishment of a financial organisation in accordance with the Law on Investment 2020 and Law on Enterprises 2020 in order for this financial organisation to establish a private educational institution as prescribed in the Education Law 2019;

- Invest directly in the establishment of a private educational institution as prescribed in the Education Law 2019.

4. Financial sources for investment in education in Vietnam

According to Article 95 of the Education Law 2019, financial sources of investment in education comprise:

- State budget;

- Legal investment capitals of domestic and foreign organisations and individuals;

- Incomes from educational, training, scientific and technological services; service and assistance to educational operation of educational institutions; incomes from business operation; interest from deposits in banks and other legal incomes as regulated by law;

- Funding for fulfilment of the State’s requests;

- Loans;

- Sponsorship, aid, grants of domestic and international organisations and individuals.

5. Regulations on State budget for investment in education in Vietnam

Regulations on state budget investment in education according to Article 96 of the Education Law 2019 are as follows:

- The State shall give first priority to the allocation of state budget for education, ensuring that educational and training expenditures take up at least 20% of the State budget.

- The State budget for education must be allocated on the principles of transparency and democracy, based on the educational scale, socio-economic development conditions of each region; securing budget for universalized education, educational development in ethnic minority areas and areas with exceptional socio-economic difficulties.

The State shall be responsible for the full and timely allocation of budget so as to facilitate the universalization of education and to meet the progress of the school year.

- Education authorities and educational institutions shall be responsible for effective management and use of the allocated budget for education and other incomes as prescribed by law.

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