[Q&A] #012 - Setting Up a Training Business in Vietnam: A Comparative Guide

Vietnam's burgeoning economy presents a lucrative opportunity for foreign training providers. However, navigating the legal landscape to establish a training business can be complex. This Q&A section aims to clarify the key considerations for foreign investors looking to enter the Vietnamese training market. We delve into the core differences between establishing a foreign-invested company (FIC) and a local Vietnamese company, outlining the legal requirements, capital needs, and operational considerations for each structure.

[Q&A] #012 - Setting Up a Training Business in Vietnam: A Comparative Guide

General Questions

Q1: What are the main options for a foreign company to operate a training business in Vietnam?

A1: There are primarily three options: establishing a foreign-invested company (FIC) or a local Vietnamese company or M&A a current training business.

Q2: What are the key differences between an FIC and a local Vietnamese company for a training business?

A2:

• FIC: Requires compliance with educational service regulations, including minimum capital, infrastructure, and teacher qualifications. Setup time is longer (3-4 months).

• Local Vietnamese company: Not subject to educational service regulations, faster setup (1-2 months). Foreigners can hold management positions.

Specific Concerns

Q3: What are the capital requirements for a training business in Vietnam?

A3: The minimum capital is VND 20 million per student, which can be reduced to VND 14 million if the location is leased. The total capital depends on the expected number of students.

Q4: Are there specific infrastructure requirements for a training business?

A4: Yes, there are. Adequate facilities, a minimum teaching area of 2.5m2 per student, offices, and a library are necessary.

Q5: What qualifications are required for teachers in a training business?

A5: Teachers must have a college degree or equivalent in a relevant field. The student-teacher ratio is capped at 25:1.

Q6: Can foreigners hold management positions in a Vietnamese training company?

A6: Yes, foreigners can hold management positions in a local Vietnamese company by signing labor contracts.

Q7: Is it possible to convert a local Vietnamese company into an FIC later?

A7: Yes, it's possible to convert a local Vietnamese company into an FIC through acquisition. However, it will then be subject to educational service regulations.

Q8: What are the estimated timelines for setting up an FIC and a local Vietnamese company for a training business?

A8: An FIC typically takes 3-4 months to set up, while a local Vietnamese company can be established in 2 weeks.

FDI setting up timeline

Conclusion: Setting up a training business in Vietnam offers significant potential but requires careful planning and legal guidance. While both FICs and local Vietnamese companies have their advantages, the choice ultimately depends on the investor's long-term goals, risk tolerance, and financial capabilities. Understanding the regulatory environment and compliance requirements is crucial for ensuring a successful venture. It's advisable to consult with legal and business experts to tailor a strategy that aligns with your business objectives.