Foreign investment in Vietnam’s education sector: Market access and legal considerations for foreign investors

1. Why Market Access Should Be the Starting Point

For a foreign investor, market access should generally be assessed before determining the detailed structure of an investment project. Under Vietnam’s investment framework, foreign investors are generally entitled to market access on the same basis as domestic investors, except for sectors included in the list of sectors subject to restricted market access or where specific conditions apply.

Education is a regulated sector. As a result, an investor should not rely solely on the general principle that foreign investors may establish businesses in Vietnam. Instead, the investor should identify the exact activity proposed and determine whether that activity is subject to:

• restrictions on foreign market access;

• conditions concerning the form of investment;

• foreign ownership requirements;

• requirements imposed by international commitments;

• sector-specific conditions; or

• other conditions applicable to foreign-invested educational institutions.

The market access analysis should therefore be conducted before the investor commits to a particular corporate or investment structure.

2. The Same “Education” Label May Cover Different Legal Activities

One of the practical difficulties in education investment is that commercially similar businesses may fall under different legal regimes. For example, a foreign investor may describe a proposed project as an:

• education centre;

• academy;

• training centre;

• language centre;

• learning studio;

• children's activity centre; or

• international school.

These commercial descriptions do not, by themselves, determine the legal classification of the project. The relevant assessment should focus on the substance of the activities actually provided. Where the business provides structured teaching, instructors, a curriculum, scheduled classes and defined learning outcomes, the activity may need to be assessed under the regulations governing education.

On the other hand, activities primarily involving entertainment, recreational experiences or informal activities may be subject to a different legal framework. This distinction is particularly relevant for modern business models combining education with art, sports, creative workshops, children's activities or entertainment.

3. Foreign Investors Should Identify the Applicable Regulatory Framework

Once the proposed activity has been defined, the investor should identify the legislation governing that particular type of education.

For preschool, general education, continuing education and other educational institutions falling within its scope, Decree No. 360/2026/ND-CP is an important regulatory instrument. For vocational education and higher education, Decree No. 361/2026/ND-CP provides the relevant framework.

These regulations should be considered together with the Law on Investment, the relevant education legislation and other regulations governing foreign investment and the operation of educational institutions.

The legal assessment should therefore not be based on a single regulation. An education investment project may be governed simultaneously by investment, enterprise, education, labour, immigration, land, construction, fire prevention and environmental regulations, depending on the nature and scale of the project.

4. Market Access and Operating Conditions Are Two Different Questions

Foreign investors should distinguish between two separate legal questions.

First: Can the foreign investor enter the market?

This involves determining whether the proposed education activity is open to foreign investors and whether any foreign ownership, investment-form or other market access restrictions apply.

Second: Can the proposed educational institution operate?

Even if the foreign investor is permitted to enter the market, the institution may still have to satisfy specific conditions before it can conduct educational activities.

These may include requirements relating to:

• investment capital;

• financial capacity;

• location and facilities;

• educational programmes;

• teachers and lecturers;

• management personnel;

• student or learner capacity; and

• educational operation procedures.

Therefore, satisfying market access conditions does not automatically mean that the investor can immediately commence educational activities.

5. The Investment Structure Should Follow the Legal Assessment

A foreign investor may consider different structures for entering Vietnam’s education market. Depending on the proposed activity, the investor may establish a new foreign-invested entity or participate in an existing Vietnamese enterprise through capital contribution or acquisition.

The choice should be made only after the investor has determined the regulatory conditions applicable to the proposed activity. For example, if an investor intends to acquire an existing education business, the investor should not only conduct ordinary corporate due diligence. The review should also cover:

• the target company's education-related business activities;

• existing investment approvals;

• educational establishment and operation approvals;

• the validity and scope of relevant licences;

• premises and land-use arrangements;

• educational programmes;

• teachers and other personnel; and

• compliance history.

This is important because acquiring a company does not necessarily eliminate the regulatory requirements applicable to the educational activities conducted by that company.

6. Foreign Investment Does Not Automatically Mean 100% Foreign Ownership Is Available for Every Activity

Another issue that should be carefully assessed is the proposed foreign ownership structure. Foreign investors should not assume that every education-related activity can automatically be implemented through a wholly foreign-owned enterprise.

The applicable market access conditions must first be identified based on the specific business line and the relevant legal framework. Where Vietnam's international commitments, investment legislation or specialized regulations impose conditions, those conditions should be reviewed before the investor determines the proposed ownership ratio.

7. International Commitments May Also Be Relevant

Vietnam’s international commitments may form part of the legal assessment of foreign investment in services. For an education project, the investor may need to consider Vietnam’s commitments under relevant international agreements in addition to domestic legislation.

However, an international commitment permitting market access does not necessarily mean that the investor is exempt from domestic licensing and operating requirements. In practice, the market access assessment should therefore involve a comparison between:

1. Vietnam’s international commitments;

2. the Law on Investment and its implementing regulations; and

3. sector-specific education regulations.

The most favourable applicable legal basis should be identified where different sources of law provide different levels of access, subject to the applicable legal principles.

8. The Proposed Business Scope Should Be Carefully Defined

A foreign investor should avoid registering a broad range of education-related activities simply for the purpose of creating flexibility. The registered business scope should be consistent with the actual investment project and the educational activities that the investor intends to conduct. For example, a project described as providing “education services” may involve several distinct activities, such as:

• foreign-language instruction;

• academic tutoring;

• professional training;

• children's education;

• art education;

• skills training; or

• educational workshops.

These activities may not necessarily be regulated in the same way.

The investor should therefore prepare a clear description of the proposed services, target learners, teaching methods and programme structure before finalizing the business scope.

9. Mixed Education and Entertainment Models Require Particular Attention

The distinction between education and entertainment is increasingly important for innovative business models. For example, a business may intend to organize:

• painting workshops;

• craft activities;

• children's weekend programmes;

• creative classes;

• parent-child activities;

• music activities; or

• experiential learning sessions.

The legal classification should be based on how the activities are actually organized. If the business has teachers or instructors, a structured curriculum, fixed class schedules and a clear educational objective, the activity should be reassessed from an education-law perspective.

If the activity is primarily recreational and does not have the characteristics of a structured educational programme, a different classification may be appropriate. This assessment should be completed before investment registration because the classification may affect the applicable market access conditions and licensing requirements.

10. A Practical Legal Assessment for Foreign Investors

Before committing capital to an education project in Vietnam, a foreign investor should consider conducting the following legal review.

Step 1: Define the actual services. Clearly describe what the business will provide, who the learners will be and how the classes or activities will be organized.

Step 2: Determine the legal classification. Assess whether the proposed activity constitutes preschool education, general education, continuing education, vocational education, higher education, foreign-language training, short-term training or another regulated activity.

Step 3: Conduct a market access assessment. Review the applicable foreign investment conditions, including any restrictions concerning foreign ownership or investment structure.

Step 4: Review international commitments. Where relevant, compare the domestic market access framework with Vietnam's commitments under applicable international agreements.

Step 5: Determine the investment structure. Only after completing the market access assessment should the investor decide whether to establish a new entity, contribute capital to an existing company or acquire an existing business.

Step 6: Identify post-investment requirements. Determine the conditions and approvals required before the educational institution can actually commence operations.

11. Conclusion

Foreign investment in Vietnam’s education sector requires a legal assessment that goes beyond ordinary company establishment procedures. The key issue is not simply whether “education” is open to foreign investment. Instead, the investor should identify the specific educational service, determine its legal classification, assess the applicable foreign market access conditions and then establish an investment structure that is consistent with those requirements.

The distinction between market access and operating conditions is particularly important. A foreign investor may be permitted to invest in a particular education activity but still need to satisfy additional requirements before the relevant educational institution can legally operate.

The regulatory framework has also developed significantly in 2026, particularly following the issuance of Decree No. 360/2026/ND-CP and Decree No. 361/2026/ND-CP. For this reason, foreign investors should conduct a project-specific legal assessment at the beginning of the investment process, rather than relying solely on the proposed business name or a general education-related business line. Proper classification and early market access assessment can help investors select an appropriate investment structure, identify the necessary approvals and reduce regulatory risks when entering Vietnam’s education market.