New rules could stymie education FDI

Experts have objected to several provisions of a draft decree on foreign investment in education saying they need further clarification and revision.
RMIT graduation ceremony (Photo: VNA)
RMIT graduation ceremony (Photo: VNA)

They expressed their opinions at a recent consultative workshop on a draft decree prepared by the Ministry of Education and Training (MoET).

"The draft is set to replace Decree 73 issued in 2012, and change procedures and investment conditions to boost competitiveness and help foreign investors enter the Vietnamese education sector," said Nguyen Xuan Vang, head of MoET’s International Cooperation Department.

According to Foreign Investment Agency under the Ministry of Planning and Investment, as of March 20, 2017, Vietnam had attracted 320 foreign direct investment (FDI) projects in education with a total investment of $684.3 million, accounting for 1.3 percent of the total number of FDI projects and 0.2 percent of FDI capital.

Experts said at the workshop that the provision that investors need a secured investment fund of at least VND1 trillion ($44.5 million) to establish a foreign higher education institution in Vietnam could prove problematic.

Vo Thanh Binh of the Association of Universities and Colleges Vietnam said that Decree 73 required investors to prepare a minimum investment capital of VND300 billion, so the new decree would raise this by more than three times to VND1 trillion .

“What is the increase based on?” Binh asked, implying that the increase could be a barrier to investment in education projects.

Nguyen Kim Dung, head of Legal and Governance Relations of British University Vietnam, said the increase in capital investment was reasonable, but it would be unreasonable to require this capital to be in cash.

“When applying for investment licences and establishing schools, investors can prove their ability through auditing reports that list their equity and assets, as well as through loan agreement contracts between bank(s) and the investors.”

"So, it is not reasonable to treat just cash as capital investment," Dung said.

A representative from the ASEAN College in Hung Yen province said that the investment of 1 trillion VND could be enough to develop economic or foreign language schools, but would be insufficient for an institution teaching technology.

“If the increase is made without a firm foundation, the decree will require several guiding documents, causing difficulties for investors,” he said.

Vang responded that the “secured investment fund for foreign higher education school project is the same as that of Vietnamese schools.”

He said that the fund would not cause difficulties for foreign investors, noting that some foreign universities in Vietnam, like Vietnam-Germany University or Vietnam-Japan University had investments of $100 million-200 million.

Ho Thuy Ngoc, head of International Training Faculty of the Foreign Trade University, said that under the draft decree, students have to complete “compulsory content” determined by Minister of Education and Training before attending foreign programs.

“Our foreign partners will not agree to add Vietnam’s compulsory content to their training programs. They grant students certificates and they want them to learn authentic programs,” she said.

“The additional content will also be a barrier for students and education institutions when they try to access fully-imported training programs,” Ngoc said.

Duong Thi Hoai Son of the Sakura Montessori School said she disagreed with the draft decree provision that requires teachers at nursery schools to be college graduates.

She said this condition was not necessary because nursery teachers taking care of babies aged 12 to 18 months did not need higher education qualifications.

“Enthusiasm and love for children are more important,” she said.

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