IN Edition 2018

RESEARCH REPORT

This project is co-funded by the European Union USEFUL CONTACTS MORE INFORMATION

EU-Vietnam Business Network (EVBN) General Statistics Office of Vietnam: 15th Floor, 5B Ton Duc Thang, District 1 http://www.gso.gov.vn , Vietnam Vietnam Customs Statistics: T: +84 (0)28 38239515 http://www.customs.gov.vn www.evbn.org Vietnam Trade Promotion Agency (Vietrade): en.vietrade.gov.vn World Bank Vietnam: http://www.worldbank.org/en/country/vietnam

The Landmark, 15th floor, 5B Ton Duc Thang St., District 1, This publication was produced with the assistance of the European Union. Ho Chi Minh City, Vietnam The content of this publication is the sole responsibility of EVBN and Tel. +84 (0)28 3823 9515 Fax +84 (0)28 3823 9514 can in no way be taken to reflect the views of the European Union. www.evbn.org

EVBN 2 CONTENTS

Contents 3 Chapter 3: Competitive Landscape Glossary 4 Public sector 43 List of Abbreviations 5 Private sector 43 Supplementary sector 45 Currency Exchange 5 Case Studies 47 List of Figures 6 Vinschool 47 49 Executive Summary 8 Vietnamese-German British Council Vietnam 51

Chapter 1: Vietnam Overview Chapter 4: Profile of End Consumer 53 Geo-demographics 10 Vietnam’s Economy 12 Structure of consumption expenditures 14 Chapter 5: Regulatory and Legal Framework Laws and regulations on education in Vietnam 57 Chapter 2: Overview of Education in Vietnam Legal framework for foreign investors 57 Relevance and Impact of EVFTA 59 Vietnam’s education landscape 16 Structure of education system 19 Public sector 23 Private sector 29 Summary 60 Supplementary sector 30 List of Trade Fairs and Exhibitions 61 Overseas study 33 Main Online and Printed Publications 64 Market trends 35 Useful Contacts Market drivers 38 65 Market barriers 39 References 66 Opportunities and challenges for European companies 40

EVBN Education in Vietnam 3 GLOSSARY

Term Explanation

Early childhood education, for infants from the age of three months Nursery up to three years Early childhood education, for infants from the age of three years up to six years Early childhood education, incorporating the functions of both Pre- nursery and kindergarten, for infants from the age of three months up to six years Primary school General education, for students from age six to eleven, including / Elementary school grade 1 to 5 Lower General education, for students from age twelve to fifteen, including / Junior high school grade 6 to 9 General education, comprising both primary school and lower Basic education secondary school Upper secondary school General education, for students from age sixteen to eighteen, / Senior high school including grade 10 to 12 General education, comprising both lower and upper secondary Secondary school school Higher education, narrowly focused in , duration 3 years Higher education, multidisciplinary, with research capacity, duration 4 University to 6 years based on field of study Higher education, narrowly focused in study area, highly specialised Research institute research capacity Public institution Educational establishment, owned and invested by the government Education establishment, set up by the government, jointly invested Semi-public institution by the government and members of the public People-founded Education establishment, owned and invested by social or economic institution organisations Education establishment, owned and invested by individuals or Private institution groups of individuals

EVBN Education in Vietnam 4 LIST OF ABBREVIATIONS

ASEAN Association of Asian Nations BC British Council CAGR Compound Annual Growth Rate CIT Corporate Income Tax EU European Union EVFTA EU-Vietnam Free Trade Agreement FDI Foreign Direct Investment FOE Foreign Owned Enterprise FTA Free Trade Agreement GDP Gross Domestic Product GRDI Global Retail Development Index K-12 Kindergarten to 12th Grade MOET Ministry of Education and Training OECD Organisation for Economic Co-operation and Development PISA Programme for International Student Assessment STEM Science, Technology, Engineering and Mathematics TIMSS Trends in International Mathematics and Science Study VGU Vietnamese-German University WTO World Trade Organization

CURRENCY EXCHANGE

EUR/US$ 0.81 EUR/VND 27,998.64

EVBN Education in Vietnam 5 LIST OF FIGURES

Figure 1: Map of Vietnam with key cities 10 Figure 2: Vietnam’s population 2013-20f 11 Figure 3: Forecast of rural and urban population in Vietnam and Asia Pacific, 2030 11 Figure 4: Nominal GDP and Real GDP growth, 2013-20f 12 Figure 5: Nominal GDP per capita, 2013-20f 12 Figure 6: Total registered FDI capital, 2010-2017 13 Figure 7: Total registered FDI capital by provinces, 2017 13 Figure 8: Structure of consumption expenditure, 2013-22f 14 Figure 9: Share of Education in GDP and Government Expenditure, 2000-2016 16 Figure 10: Government expenditure on education in ASEAN, 2016 (% of GDP) 16 Figure 11: Gross enrolment ratio in each level of education in Vietnam 17 Figure 12: rate, adult total (% of 15-35 age group) 17 Figure 13: PISA score of Vietnamese students and International Average in 2018 18 Figure 14: National education system of Vietnam, 2014 19 Figure 15: Top 10 Asian countries in EF English 2017 Proficiency Results 21 Figure 16: Number of institutions by education stage in academic year 2016-2017 22 Figure 17: Number of students by education stage 22 Figure 18: Number of schools in public education 23 Figure 19: Number of students in public education 23 Figure 20: Number of students in each educational level 24 Figure 21: Average number of general education student per class 24 Figure 22: Ho Chi Minh City’s tuition fees of school year 2017-2018 25 Figure 23: ’s tuition fees of school year 2017-2018 25 Figure 24: Higher education majors’ structure in terms of students, 2017 27 Figure 25: Comparison of university programmes 28 Figure 26: Number of schools in private sector 29 Figure 27: Number of students in private sector 29 Figure 28: Percentage of parents sending kids to extra-classes, 2014 31 Figure 29: Purpose of going to extra-classes, 2014 31 Figure 30: Venues for extra-classes, 2014 31 Figure 31: Number of students, 2013-2016 33

EVBN Education in Vietnam 6 Figure 32: Average private tuition fee in some countries, academic year 2015-2016 33 Figure 33: Number of Vietnamese students in some countries, 2013-2016 34 Figure 34: Total spending of Vietnamese students on studying abroad, 2013-2015 34 Figure 35: Proportion of students choosing different study programmes in the US, 2010-2017 34 Figure 36: Number of upper secondary schools and students, 2013-2016 35 Figure 37: Number of private and students, 2013-2016 36 Figure 38: Percentage of out-of-school children among different age groups, regions and ethnicities in 2014 39 Figure 39: List of popular private pre-primary and general education schools 43 Figure 40: List of top private universities in Vietnam 44 Figure 41: Top popular English centres based on Facebook likes, 2015 45 Figure 42 Top English centres with most branches, 2015 46 Figure 43: Average listed tuition of English centres, 2015 46 Figure 44: Market share in terms of sales of high-end English centres, 2015 46 Figure 45: Vinschool’s logo and website 47 Figure 46: Vinschool’s five core values 47 Figure 47 Vinschool’s development over the 2013-2017 period 48 Figure 48: Vietnamese-German University logo and website 49 Figure 49: Programmes offered by VGU, 2018 50 Figure 50: British Council Vietnam’s logo and website 51 Figure 51: British Council Vietnam’s LearnEnglish website 52 Figure 52 Urban-rural spending on education, 2016 54 Figure 53: Reasons for studying English, 2016 54 Figure 54 Top 5 criteria for choosing an English school, 2016 55 Figure 55: Proposed changes to Decree 73/2012/ND-CP 58 Figure 56: Enrolment of Vietnamese students into foreign-invested education institutions according to Decree 73/2012/ND-CP 59

EVBN Education in Vietnam 7 Executive Summary

With its young population and a long-standing embrace of education, Vietnam offers great opportunities for investors in the field. Since 1975, education has been at the centre of policy discussions and reforms. Moreover, since 2000 the government has committed 15% - 20% of its public expenditure to education, the highest rate amongst all other ASEAN countries. Throughout the last decade, Vietnam has made considerable headway in primary enrolment rate, literacy rate and PISA ranking, as readers shall find in this report.

First, prefer the private education sector over the public school system because of its superior and outcome for students. This preference translates into a strong market for ‘non-public’, ‘supplementary’, and ‘overseas’ services. Second, Vietnamese people increasingly value supplementary attributes, such as language proficiency and soft skills, to enhance their employability. Third, there is a growing demand for world-class education through abroad study.

This report seeks to shed light on the education market in Vietnam. First, it provides an overview of Vietnam’s education landscape by introducing its education system, on-going trends, as well as the underlying drivers, barriers, and opportunities and challenges for foreign investors. This section will provide readers with more details on the public, private, and supplementary sectors, as well as overseas studies of Vietnamese students.

In the second part, the report lays out the competitive landscape for the public, private and supplementary sectors. Three cases studies are provided featuring Vinschool, a local private institution, the Vietnamese-German University, a foreign-invested institution, and British Council Vietnam, a language-training provider. The case studies are followed by a brief profile of end consumer. Interested investors can find more about related laws and regulations in the final part of this report. CHAPTER 1 VIETNAM OVERVIEW

Geo-demographics

Vietnam’s Economy

Structure of consumption expenditures I. Geo-demographics

Vietnam comprises a landmass of 330,972.4 km2, Hanoi a vast sea area including a large continental shelf and a string of archipelagos stretching from the Gulf of Tonkin in the North to the Gulf of in the South. In 2017, Vietnam’s population was 95.54 million people and is projected to reach 98.4 million in 2020, an increase of 1% on average between 2015-2020. Major cities in Vietnam, namely Hanoi, Hai Phong, Danang, Nha Trang, Ho Chi Minh City, and Can Tho, are well-dispersed geographically. Hanoi, the capital of Vietnam, is the second largest city in Vietnam and is the country’s political and administrative centre. Hanoi is known for its rich culture characterised by South East Asian, Chinese and French influences. Ho Chi Minh City, commonly known as Saigon, is the country’s largest city and the commercial hub of Vietnam. By 2030, Ho Chi Minh City will continue to be the largest city in Vietnam by population with over 10 million inhabitants accounting for 23% of Vietnam’s total urban population. Nha Trang

Ho Chi Minh City Image www.wikipedia.org from Can Tho

Figure 1: Map of Vietnam with key cities Image www.vietnamtourism.gov.vn from

EVBN Education in Vietnam 10 2013 91.50

2014 92.54

2015 93.57 *Unit: million people

2016e 94.57

2017f 95.54

2018f 96.49

2019f 97.43

2020f 98.36

Figure 2: Vietnam's population 2013-20f Source: D&B

Although Vietnam remains predominantly 57% rural, it is expected to undergo significant RURAL urbanisation in the next 14 years. By 2030, the urban population is forecasted to increase by 37% from 2017, reaching Vietnam 45.66 million people, or 43% of the total population of Vietnam. This rapid urbanisation is caused predominantly 43% by the growth of urban cities and the URBAN expansion of the urban-based industrial 44% and services sectors. Moreover, high RURAL urbanisation rate causes a pressure on the construction sector to increase the number of high-rise apartment Asia buildings and office buildings. Pacific Figure 3: Forecast of rural and urban population in Vietnam and 56% Asia Pacific, 2030 URBAN Source:UNDP

EVBN Education in Vietnam 11 II. Vietnam’s Economy

Gross Domestic Product

250 8 6.7 6.8 6.7 6.2 7 200 6.0 5.4 6

150 5 248.8

228.6 4 (%)

(€ bn) 208.1 100 182.0 193.9 172.5 3 140.0 128.4 2 50 1

0 0 2013 2014 2015 2016 2017 2018e 2019f 2020f

Nominal GDP (EUR bn) Real GDP growth (%)

Figure 4: Nominal GDP and Real GDP growth, 2013-20f Source: BMI

Real gross domestic product (GDP) growth is expected to accelerate at 6.7% in 2018, reaching €208.1 billion in value. With this growth rate, Vietnam remains one of the fastest-growing economies in Asia. The solid increase pace is foreseen to continue until 2020, to reach €248.8 billion. The outlook is underpinned by ongoing Government policies regarding the privatisation of state-owned enterprises (SOEs), the maintenance of price stability, the lowering of trade barriers and reduced tax rates.

In 2017, Vietnam’s nominal GDP 3000 per capita reached €2,029, an 2,529 2500 2,346 increase of 5.4% compared to 2,156 2,029 2016. Nonetheless, the country has 1,924 2000 1,843 been recognised for its effort to 1,512 1,403 increase the GDP per capita, and (€) 1500 expects to reach a GDP per capita 1000 of €2,529 in 2020. A solid increase in GDP per capita suggests that an 500 average Vietnamese will have more disposable income to spend on 0 2013 2014 2015 2016 2017 2018e 2019f 2020f more goods than just basic needs.

Figure 5: Nominal GDP per capita, 2013-20f Source: BMI

EVBN Education in Vietnam 12 Foreign Direct Investment

(€ mn) In 2017, Vietnam received a 24,041 record €24 billion of foreign direct investment (FDI). This is a 19,761 18,436 reflection of the increase in trade 17,577 and production in Vietnam as more 16,378 15,066 global manufacturing giants have decided to move their production 11,904 10,530 facilities to Vietnam to reap the benefits from the numerous incentives to attract investments from the government. Figure 6: Total registered FDI capital, 2010-2017 2010 2011 2012 2013 2014 2015 2016 2017 Source: GSO

Ho Chi Minh City, Vietnam’s commercial centre, continued to receive the most FDI in 2017 with a total registered capital of nearly EUR 2.7 billion. Provinces such as Binh Duong and Bac Ninh, where LG and Samsung established their manufacturing centres, also received large amounts of FDI at EUR 2.0 and EUR 2.6 billion, respectively. Thanh Hoa and Khanh Hoa are two provinces receiving the highest number of newly registered capital, respectively, due to mega Build – Operate – Transfer Japan’s thermal power projects.

(Unit: EUR mn) Ho Chi Minh City 2,684.4

Bac Ninh 2,640.6

Thanh Hoa 2,563.8

Khanh Hoa 2,104.7

Binh Duong 2,003.5

Other 12,054.1

Figure 7: Total registered FDI capital by provinces, 2017 Source: GSO

EVBN Education in Vietnam 13 III. Structure of consumption expenditures

With this GDP growth and increase in disposable income, consumption expenditure is expected to grow at a rate of 9% during 2016-22f. The increase in the standard of living will likely also raise the price and the quality of goods purchased by Vietnamese consumers.

6,000

5,000

4,000

3,000

2,000 EUR per year per household EUR per year

1,000

0 20132014 2015 2016 2017 2018 2019 2020 2021 2022 Other 624 669 715 754 815 883 967 1,060 1,163 1,278 Leisure & education 212 228 244 258 279 303 332 365 401 441 Transport & communications 515 551 588 618 667 721 787 862 944 1,035 Health spending 69 74 79 84 91 98 108 118 130 143 Furnishing and home 149 160 171 180 195 211 231 253 277 305 Housing and utilities 396 422 450 472 508 548 598 653 714 782 Clothing & footwear 74 80 85 90 97 105 114 125 137 151 Food, beverages & tobacco 588 629 671 706 761 823 899 984 1,078 1,183

Figure 8: Structure of consumption expenditure, 2013-22f Source: BMI

EVBN Education in Vietnam 14 CHAPTER 2 OVERVIEW OF EDUCATION IN VIETNAM

Vietnam’s education landscape

Structure of education system

Market trends

Market drivers

Market barriers

Opportunities and challenges for European companies I. Vietnam’s education landscape

Education has always played a central Share of education in GDP (%) role in Vietnam’s society and culture. Share of education in Vietnamese families are willing to go to Government expenditure (%) great lengths to ensure their offspring get the required education.

The spends % significantly more on education than other countries in the region, with 15% of its total public spending going to 20.0 20.0 education in 2000, and 20% in recent years. The rate of government expenditure 15.1 16.0 on education as a percentage of GDP has oscillated between 5.1% and 5.9% over the 2009-2012 period and increased to 5.9 6.3 6.3% in 2016, indicating the government’s 5.1 growing commitment to increase access 3.3 to education and to improve its quality. 2000 2009 2012 2016 Figure 9: Share of Education in GDP and Government Expenditure, 2000-2016. Source: UNESCO, MOET, Ipsos Business Consulting analysis

% In 2017, education received EUR7.7 billion, which constitutes 20% of all state expenditure on education according to the Ministry of Education and Training (MOET). The proportion of public expenditure on education and training on Vietnam’s GDP is much higher than 6.3 that of many countries in the region, even 6.1 countries with higher economic levels. 4.2 3.8 4.1 3.3 3.4 While it is hard to establish a direct link 2.9 between spending and performance, 2.0 Vietnam’s strong emphasis on education correlates with its impressive results in terms of enrolment, literacy and

Laos Programme for International Student

Brunei Assessment (PISA) ranking (where Vietnam Malaysia Thailand Indonesia Philippines Vietnamese students scored high).

Figure 10: Government expenditure on education in ASEAN, 2016 (% of GDP) Source: UNESCO EVBN Education in Vietnam 16 Enrolment rate

Figure 11 shows an optimistic picture of % universal education in Vietnam. For all 108.751 109.97 104.96 levels of education, enrolment rates show Primary 97.047 Education an upward trend. Therefore, Vietnamese 86.755 people have enjoyed better access to Pre-primary 70.652 Education education and have become more 59.345 educated over the last decades. 40.513 28.26 22.661 16.031 Tertiary 9.413 Education Remark: Gross Enrolment Rate: Total enrolment in a specific level of education, regardless of age, expressed as a percentage of the official school- 2000 2005 2010 2016 age population corresponding to the same level of education in a given school year. The figures can be Figure 11: higher than 100% because of early or late school Gross enrolment ratio in each level of education in Vietnam entrance and grade repetition. Source: World Bank Source: InterNations

Literacy Rate

% Vietnam has made strides in literacy 98.1 99.0 over the last seventy years, thanks to 94.0 government policy reforms. In 2016, 98.1% of the population aged 15 to 35 was considered literate, compared to more than 95% of the population being unable to read or write in 1945 when the country became independent. In 2016, Vietnam still had more than 1.3 million illiterate people, most of which are unable to attend school due to living in remote areas, being unable to afford tuition, or because of old age. The government expects the literacy rate to reach 99% of individuals aged 15 to 35 by 2020.

Figure 12: Literacy rate, adult total 5.0 (% of 15-35 age group). Source: Ministry of Education and Training

1945 2000 2016 2020f

EVBN Education in Vietnam 17 PISA Ranking

PISA is a global study by the Organisation for ranks higher than the OECD average, which Economic Co-operation and Development includes the US and European countries. (OECD). It evaluates educational systems by However, sceptics noted that PISA rankings measuring 15-and-over students’ scholastic normally correlate to the country’s GDP and performance in mathematics, science, and prosperity, which would make Vietnam an reading. Vietnam ranked among top performers outlier. One plausible explanation is the fact in the developing East Asia and Pacific region that the Vietnamese education system is exam- in 2018 according to the World Bank. Vietnam oriented and theoretical.

525 493 490 495 493 487

Science Math Reading

International Average Vietnam

Figure 13: PISA score of Vietnamese students and International Average in 2018 Source: World Bank

EVBN Education in Vietnam 18 II. Structure of the education system

Age Doctor of 24 Philosophy Master Equivalent levels Advancing levels 4-6 years 2 years Higher 22 Education

University Education College Education (Non-format Education)

3 years 18 4-6 years

18 Professional Secondary Upper Secondary School School 3 years 3-4 years Vocational Training 15 General Lower Secondary School Education 4 years 1-5 years 11

Primary School 5 years 6 6 Early Childhood Kindergarten 3 Home-schooling Nursery 3 months 0 Figure 14: National education system of Vietnam, 2014 Source: Ministry of Education and Training

Vietnam’s education system is divided into five levels:

PRESCHOOL AND KINDERGARTEN PRIMARY SCHOOL

For children aged 3 - 6. This level of education For children aged 6 - 11. The five years is not compulsory and mostly popular in of primary school constitute the only major cities such as Ho Chi Minh City, Hanoi, compulsory education in Vietnam. It used to Hai Phong, Can Tho, Da Nang, Vung Tau, etc. culminate in a final exit examination, which In the later years children learn the was abolished in the 2000s. and basic arithmetic.

LOWER

For children aged 11 - 15. Before 2006, students had to pass the Intermediate Graduation Examination (IGE) (administered by the local Department of Education and Training) to graduate, which is no longer required. The Vietnamese government plans to universalise lower secondary education by making education compulsory for nine years (from grade 1 to 9) by 2020.

EVBN Education in Vietnam 19 UPPER SECONDARY EDUCATION HIGH SCHOOL GRADUATION EXAMINATION For students aged 15 - 18. Upper secondary education culminates with the completion of At the end of grade 12, all high school Grade 12. Admission to this level is competitive students are required to take the and requires passing a rigorous entrance National High School Graduation exam that is used to determine in which Examination, which is centrally schools students can enrol. Students have to administered by the MOET, to get their choose between natural sciences or social High School Graduation Certificate. sciences as the focus of their programme. In 2015, high school graduation and university entrance exams merged into a single examination. With their results, students can either qualify for high HIGHER EDUCATION school graduation or apply for higher education. Despite the measures taken to Institutions of higher education are classified diversify choices for students taking the into universities (dai hoc), junior exam, pressure on candidates remains (cao dang) and research institutes (hoc vien). significant. Before 2015, students were Admission is determined by the students’ defaulted to take a number of subjects scores in the entrance examination. Admission that varied each year. Such policy to a public university is considered a great reduced students’ graduation exam achievement, particularly for those coming results, especially for those who are not from disadvantaged families or rural areas. specialised in the examined subjects.

Second language

Young Vietnamese are more and more proficient crucial for Vietnam to improve its English learning in English, the predominant foreign language in system. In that effect, the Vietnamese government Vietnam. Vietnam ranked 34th on the Education has ordered that public universities implement First English Proficiency Index in 2017, and 7th English as a second language. Vietnam also plans among Asian countries. With the launch of the to make English compulsory from grade 3 onward ASEAN Economic Community and the country’s by 2018. As of the time of this report, English is desire to compete in a global marketplace, it is mandatory only in upper secondary education.

EVBN Education in Vietnam 20 39 Indonesia 52.15 37 Japan 52.34 36 52.45 34 Vietnam 55.43

30 South Korea 55.32 29 55.81 27 India 56.12

15 Philippines 60.59 13 Malaysia 61.07 5 Singapore 66.03

Rankings Proficiency Bands Figure 15: Top 10 Asian countries in EF English 2017 Proficiency Results Source: Education First

Types of educational institutions

Vietnamese schools are divided into two types semi-public (ban cong), people-founded (dan – public (cong lap) and non-public (ngoai cong lap) and private (tu thuc). The various educational lap). Amongst non-public institutions, schools establishments are defined in Article 44 of are further classified into three types, namely Vietnam’s Law on Education as follows:

PUBLIC EDUCATIONAL ESTABLISHMENTS SEMI-PUBLIC EDUCATIONAL ESTABLISHMENTS Established and monitored by the State. The State also nominates their administrators and Set up by the State and mobilises determines staff quota. The State invests in organisations and individuals in the society infrastructure and allocates funding for their to jointly invest in infrastructure. regular expenditure.

PEOPLE-FOUNDED EDUCATIONAL PRIVATE EDUCATIONAL ESTABLISHMENTS ESTABLISHMENTS

Social or economic organisations that Individuals or groups of individuals that received permission from the State to set up received permission from the State to set up an institution with non-State budget capital. and invest in the institution by themselves.

Notwithstanding the distinctions above, all schools use the same curriculum and must operate according to Vietnamese laws (see more in the section Regulatory and Legal Framework).

EVBN Education in Vietnam 21 THE NUMBER OF INSTITUTIONS AND STUDENTS SEGMENTED BY LEVELS OF EDUCATION

The network of education institutions throughout the country has expanded, thereby offering learning opportunities for everyone and contributing to the achievement of a learning society.

Higher education 235

Upper secondary 2,391

Secondary 420

Lower secondary 10,155

Basic education 773

Primary 15,052

Pre-Primary education 14,881

Figure 16: Number of institutions by education stage in academic year 2016-2017 Source: Ministry of Education and Training

Remark: Basic Education includes Primary and Lower Secondary. Secondary includes Lower Secondary and Higher Secondary.

In recent years, the net enrolment rate increased significantly. The high number of students in every stage of education reached a y-o-y growth of hundreds of thousands of students per year, in part caused by the implementation of universal secondary education in certain regions.

1,767,879 15,514,259 5,085,635

1,753,174 15,353,785 4,627,316

1,824,328 15,082,381

2014-2015 2015-2016 2016-2017 4,416,852

1,670,025 14,900,686

2013-2014 4,227,047

Pre-primary Education General Education Higher Education

Figure 17: Number of students by education stage Source: Ministry of Education and Training EVBN Education in Vietnam 22 1. PUBLIC SECTOR

Number of schools

Vietnam has a greater number of 2013 2014 2015 2016 Number of schools public schools than private schools -2014 -2015 -2016 -2017 at all educational levels. Nursery 17 14 13 13 However, over the past few years, Kindergarten 2,529 2,403 2,315 2,184 public pre-primary schools, Pre-primary 9,585 9,962 10,151 10,397 including nursery, kindergarten, Primary 15,232 15,171 15,145 14,939 and public primary schools have Basic Education 576 570 580 749 declined as the demand was shifting to private schools. Lower Secondary 10,268 10,268 10,281 10,124 Secondary 224 235 241 266 Figure 18: Number of schools Upper Secondary 2,062 2,092 2,107 2,110 in public education Higher Education 156 159 163 170 Source: Ministry of Education and Training

Number of students

Nevertheless, the number of 2013 2014 2015 2016 Number of students -2014 -2015 -2016 -2017 students attending public schools at all educational stage is on the rise. Nursery 438,205 494,387 484,485 477,870 Kindergarten 3,186,387 3,280,109 3,470,478 3,771,612 According to the government, Primary 7,391,329 7,494,983 7,732,994 7,733,318 pre-primary education achieved Lower Secondary 4,898,901 5,061,734 5,094,220 5,178,829 a satisfactory enrolment rate in 2016-2017. The enrolment rate for Upper Secondary 2,318,920 2,264,503 2,250,972 2,290,929 children aged three to five was 92%, Higher Education 1,493,354 1,596,754 1,520,807 1,523,904 and for children aged five, 98.75%. Figure 19: Number of students in public education Source: Ministry of Education and Training

EVBN Education in Vietnam 23 7,733 7,733 7,391 7,495 Primary

5,062 5,094 5,179 4,899 Lower Secondary

4,249 3,955 3,774 Pre-primary 3,625 (Nursery & Kindergarten) Thousand Students Thousand

2,319 2,265 2,251 2,291 Upper Secondary 1,493 1,597 1,521 1,524 Higher Education

2013-2014 2014-2015 2015-2016 2016-2017 Figure 20: Number of students in each educational level Source: Ministry of Education and Training

In the public school system, more students mean larger classrooms. An average public school class has 30 students. As a consequence, students do not always receive sufficient attention.

Unit: Student

Prel. 31.4 2016-2017

2015 30.6 -2016

2014 30.5 -2015

2013 30.4 -2014

2010 -2011 30.2

Figure 21: Average number of general education student per class Source: General Statistics Office of Vietnam

EVBN Education in Vietnam 24 Facilities

Another downside of the public education 50 years, accounting for 77.1% of total classrooms system is the state of its facilities. Classrooms, (breaking down to primary 68.7%, lower secondary teaching facilities as well as libraries of many 85.7%, upper secondary 93.9%). Many schools public schools are sub-par. Currently, Vietnam in , , Central Highlands has 419,903 classrooms, 323,551 of which are and Southwest, still do not have well-fortified considered well-fortified and durable for at least classrooms and sufficient teaching equipment.

Tuition fees

According to Decree No. 86/2015/ND-CP, People’s Councils of provinces prescribes the specific annual tuition fees suitable for their province. The Vietnamese public school system offers a reasonable tuition fee, as can be seen below:

School year 2017-2018 In Figure 22, Group 1 refers to Ho Chi Minh City’s urban districts, that Ho Chi Minh City Group 1 Group 2 (EUR/student (EUR/student/ is, district 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, /month) month) 12, Binh Thanh, Phu Nhuan, Go Vap, Nursery 7.4 5.2 Tan Binh, Tan Phu, Thu Duc, and Binh Pre-primary 5.9 3.7 Tan. Group 2 comprises of suburban districts, such as Binh Chanh, Hoc Primary Free Mon, Cu Chi, Can Gio, and Nha Be. Lower secondary 3.7 3.1 Continuation lower secondary 3.7 3.1 Figure 22: Ho Chi Minh City's tuition Upper secondary 4.4 3.7 fees of school year 2017-2018 Source: Ho Chi Minh Department of Education Continuation upper secondary 4.4 3.7 and Training

The tuition fee in Hanoi School year 2017-2018 is divided into three groups: Group 1 for Hanoi Group 1 Group 2 Group 3 (EUR/student (EUR/student/ (EUR/student/ urban students; Group /month) month) month) 2 for rural students; and Nursery Group 3 for students 4.1 2 0.5 from minority ethnic Pre-primary groups. Primary Free Figure 23: Lowera secondary Hanoi's tuition fees of Continuation lower secondary 4.1 2 0.5 school year 2017-2018 Upper secondary Source: Hanoi Department of Education and Training Continuation upper secondary

EVBN Education in Vietnam 25 Public primary education became free in July 2014. The government is also considering making lower secondary education free. Some of the upper secondary schools have already offered gifted students tuition-free education. Free tuition might become a threat to private education institutions in Vietnam.

Enrolment requirements

Lower and upper secondary schools are either where the school is located (though not in higher classified as normal or for gifted children. The education). Second, to attend a lower secondary latter welcome students who have greater school for the gifted, students must achieve high potentials in social sciences, natural sciences or scores in Mathematics and Vietnamese and take foreign languages and offer intensive training in an English entrance test. As for enrolling in upper those particular areas. secondary schools for the gifted, students must score high on the secondary graduation exam Public schools have a number of enrolment and write a competitive entrance exam. requirements. First, students must reside in the area

Curriculum

All public schools in Vietnam, at every level of curriculum for gifted students. The MOET is education, follow the standard programme planning to introduce English to first and second prescribed by the MOET. Some top upper grade students. With the current programme, secondary schools offer additional specialised English only starts in .

Higher education majors’ structure

Business, finance, banking, education, and recently, information technology and foreign languages, are the favourite majors of Vietnamese students.

EVBN Education in Vietnam 26 Group 7 Humanities, Social sciences and behaviour, Group 1 Journalism news and information, Education science Social welfare, Hospitality- tourism and -recreation and personal service, 20.8% 15.5% Logistics, Environment, Group 2 National security and defence 4.4% Art 4.5% 14.7% Group 3 Business and management, Law Group 6 5.1% Health 35.0%

Group 4 Life science, Natural science Group 5 Math and statistics, Computer and information technology, Engineering technology, Manufacturing and processing, Architecture and construction, Agriculture-forestry-fishing, Veterinary Figure 24: Higher education majors' structure in terms of students, 2017 Source: Ministry of Education and Training

Because the Vietnamese government offers tuition-free education to students majoring in Education, Group 1 is significant. Group 3, 5, and 7 are the largest groups since the majority of students major in Business Administration, Health, Law, English, Information Technology, Automotive Engineering or Pre- primary Education.

New university programs

In recent years, transnational education programmes, advanced programmes and high quality programmes have flourished.

Name Description Tuition fee Certificate Offered by the Based completely on the Ministry of Education An average of Standard Vietnamese university and Training’s programme, taught completely in EUR553 to EUR737 programme and is not recognised Vietnamese, has no foreign professors. per year. internationally. Based completely on the programme of the Offered by the High Quality Ministry of Education and Training, taught partly An average of Vietnamese university programme in English, has foreign professors, applies modern EUR1,250 per year. and is not recognised teaching methods of global partner universities. internationally.

EVBN Education in Vietnam 27 Name Description Tuition fee Certificate

Higher entrance scores than High Quality programme, teaching programme borrowed from Offered by the Advanced reputable global universities, taught mostly in An average of Vietnamese university programme English, has foreign professors, modern facilities, EUR2,581 per year. and is not recognised and has the possibility to transfer abroad for one internationally. semester or one year.

First 2 years: fees according to International programme regularly updated Vietnamese host Transnational to world’s trends, taught mostly in English, has university. Internationally programme foreign professors, modern facilities, comprises of recognised. (2+2) 2 years in Vietnam and 2 years in foreign partner Last 2 years: fees university. according to the foreign partner university. Figure 25: Comparison of university programmes Source: Decree No.86/2015/ND--CP, Ipsos Business Consulting analysis

Post-graduate education

The number of public institutions offering post- programmes in 2010 to eight today. In Ho Chi graduate programmes has increased over the Minh City and Hanoi, most institutions offer post- years. According to the MOET, Vietnam had 180 graduate education. A number of universities institutions offering post-graduate education has started to offer transnational education in 2017. In the Mekong River Delta, for instance, programme for post-graduate education, such there used to be only one institution offering a as the Ho Chi Minh City International University, post-graduate programme. Now, almost every the University of Economics Ho Chi Minh City, the university in the region offers this possibility. Foreign Trade University, the Academy of Finance, Similarly, the Southeast region (excluding Ho the University of Finance – Marketing, etc. Chi Minh City) has gone from two post-graduate

EVBN Education in Vietnam 28 2. PRIVATE SECTOR

There is a huge demand for 2013- 2014- 2015- 2016- education in Vietnam that the Number of schools 2014 2015 2016 2017 public sector cannot satisfy. Wealthier families often send their Nursery 9 10 6 5 children to private institutions in Vietnam or overseas, as they do not Kindergarten 180 117 127 127 want their children to follow the Pre-primary 1,547 1,697 1,920 2,155 public curriculum which focuses Primary 105 106 109 113 on rote memorisation and uses one-way teaching methods. As Basic Education 16 15 17 24 a result, recent years have seen a Lower Secondary 22 25 31 31 growth in the number of private schools in pre-primary and general Secondary 130 146 148 154 education, especially in major Upper Secondary 342 294 292 281 cities. These institutions offer top- quality education to high-income Higher Education 58 60 60 65 Vietnamese families and expats. Remark: Basic Education includes Primary Figure 26: Number of schools in private sector and Lower Secondary. Secondary includes Source: Ministry of Education and Training Lower Secondary and Higher Secondary

Private institutions charge higher Number of 2013- 2014- 2015- 2016- tuition fees, which vary drastically students 2014 2015 2016 2017 based on the quality of the teaching Nursery 174,776 167,490 164,310 198,189 facilities.

Kindergarten 427,679 474,866 508,043 637,964 Figure 27: Number of students in private sector Primary 44,271 48,649 57,015 68,242 Source: Ministry of Education and Training

Lower Secondary 33,489 37,096 44,426 56,695

Upper Secondary 213,776 175,416 174,158 186,246

Higher Education 176,669 227,574 232,367 243,975

Private schools are generally more modern and better equipped than public schools. The private school system has grown rapidly with the demand, both in quality and quantity. These private schools provide a variety of learning options for students in major cities.

EVBN Education in Vietnam 29 3. SUPPLEMENTARY SECTOR

Vietnam’s education system also includes a supplementary sector, which complements students’ formal education by providing extra-curricular activities to develop skills that the formal education system fails to cover adequately. This sector can be divided into three sub-sectors: language training, private tutoring, and short courses.

Language training

With Vietnam’s involvement in cross-border resources in learning a second foreign language trade, cooperation and multi-lateral agreements, to be more competitive at school or on the job language training has become more and more in marketplace. demand. Domestic and foreign companies have higher expectations of language proficiency and Despite this interest, Vietnam does not rank high in priority is given to candidates who are fluent in terms of language proficiency. Education First ranks more than one foreign language. The rising interest the country 34th out of 80 surveyed countries in for overseas study and independent travel has also terms of ability to use English for communication. driven demand for language courses. Language In Asia, Vietnam ranks 7th after Singapore, Malaysia, training can be divided into communication the Philippines, India, Hong Kong and South Korea. classes and preparation classes for international This result confirms that language training in standardised tests, such as the International English Vietnam is insufficient and more should be done to Language Testing System (IELTS) or the Test of match up with other countries in the region. English as a Foreign Language (TOEFL). As long as the demand for language training After English, the most popular foreign languages persists and the country’s language performance are Japanese, Korean and Chinese, according to a remains average, there is market space for entrants Q&Me survey. More and more young people invest who possess expertise in the field.

Private tutoring

Vietnam has an industry of private tutoring that complements formal education programmes. Based on a survey by Thanh Nien News of 800 parents in 6 selected cities/provinces (Ho Chi Minh City, Hanoi, Da Nang, Quang Nam, Can Tho, Binh Dinh), it is reported that nearly 75% of surveyed parents send their children to tutorial classes after school hours or during weekends.

EVBN Education in Vietnam 30 Supplementing basic curriculum No 25.4% Advancing beyond curriculum Avoiding falling behind peers Yes Daycare when parents are too busy 74.6%

31.2% 25.7% 22.3% 21.7% Pressure from teachers

Figure 28: 4.3% Percentage of parents sending kids to extra-classes, 2014 Figure 29: Purpose of going to extra-classes, 2014 Source: Thanh Nien News Source: Thanh Nien News

Of these parents, more than 50% attributed the curriculum. Other notable reasons include not demand for tutorial classes to the belief that wanting their kids to fall behind their peers, normal school hours are not sufficient; 31.2% of and not having time to take care of them in the parents want their kids to receive more practise evening. 4.3% of parents reported having to on the knowledge taught at school; and 25.7% send their kids to tutorial classes under teachers’ want their kids to learn beyond the school pressure. In the same survey, 39% of parents reported Teachers' house sending their kids to their teacher’s houses for tutorial classes, 16.3% to supplementary schools, and 14.1% to their children’s school.

Figure 30: Supplementary schools/centers Venues for extra-classes, 2014 Others Source: Thanh Nien News School Home 39.0%

16.3% 17.0% 14.1% 15.3%

To regulate extra classes and private tutoring, the government issued Circular No. 17/2012/TT-BGDDT. Some points worth noting are: Extra classes shall not be provided for elementary students, except for extra-curricular activities, such as arts, sports, or life skills..” Extra classes shall not be provided for students who have attended curricular classes for 2 sessions per day.” A teacher receiving salaries from wage-fund of public service agencies is banned from: Holding external extra classes unless he/she conducts external extra classes; Conducting external extra classes for students who are in his/her curricular classes without the permit of the Head of his/her superior agency.”

EVBN Education in Vietnam 31 Despite the restrictions, extra classes for pre- of the schools, they turn to supplementary elementary and elementary students persist, due schools. At these centres, there is no monitoring to parents’ concern that their children may not of whether teachers tutor their own students. match up with their peers. Certain schools even cut class hours from a full to a half day in order The extra-class market is dominated by local to legally conduct extra classes. Moreover, since educators who have a sound understanding of teachers cannot organise private tutoring classes the Vietnamese curriculum. but are allowed to conduct extra classes outside

Short courses

Apart from language training and private tutoring, Vietnamese people also take short courses that go beyond the curricula established by the MOET, such as soft skills, work-related skills, arts, sports, and life skills.

Life skills, arts and sports courses are usually organised during the summer and with the main purpose of increasing physical fitness and capabilities. Additionally, a number of parents who cannot take care of their children during the summer send their kids to summer courses that provide boarding options.

Vietnamese people are increasingly aware of the value of soft skills. This is due to employers’ perception that university graduates lack tacit knowledge and hands-on experience. Communication skills, teamwork, computer literacy and responsibility are not adequately taught in universities. Navigos Search, a headhunting company in Vietnam, commented that the lack of soft skills is the primary reason of unemployment for recent graduates.

While the workplace becomes more complex and demanding, companies look for candidates with soft skills in addition to their educational background. The demand for skills training creates many opportunities for new investors in the field.

EVBN Education in Vietnam 32 4. OVERSEAS STUDY

Since the 1990s Vietnam has been sending students overseas, first to other Communist countries such as the Soviet Union, Poland, and Germany, then 130,000 120,000 around the world. More and more Vietnamese 104,500 110,000 students are looking to studying abroad today to avoid the antiquated Vietnamese curriculum. According to the MOET, 130,000 Vietnamese students studied overseas in 2016.

Figure 31: Number of overseas Vietnamese students, 2013-2016 Source: Ministry of Education and Training

2013 2014 2015 2016

As a result of the post- immigration Private tuition fee wave, United States and are popular charged by tertiary destinations for studying abroad since many Country Unit institutions to full-time Vietnamese have relatives there. With the rising foreign students (Bache- middle class in Vietnam, however, studying lor’s or equivalent) abroad is no longer the privilege of a few very rich people with foreign relatives. More and more United States EUR 23,680 Vietnamese households send their children to more affordable countries, such as Japan, Korea, Singapore EUR 8,518 and Singapore. Japan is particularly popular because of its retention of international students Australia EUR 8.187 after graduation, its huge investments in Vietnam, Japan EUR 6,827 and its relatively flexible study conditions and low tuition costs. South Korea EUR 6,646 Remark: The figures above consist of only the formal tuition Figure 32: Average private tuition fee in fee charged by private tertiary institutions for Bachelor’s some countries, academic year 2015-2016 level or equivalent, and do not include additional fees such Source: OECD, CNBC as housing or textbook. Tuition fees should be interpreted with caution as they result from the weighted average of the main tertiary programmes and do not cover all educational institutions.

EVBN Education in Vietnam 33 Unit: Student Japan 38,882 38,000 31,000 Australia 27,550 28,524 26,015 United States 28,000

19,000 16,082 16,579

14,726 13,000

2013 2014 2015 2016 Figure 33: Number of Vietnamese students in some countries, 2013-2016 Source: Ministry of Education and Training

2.4 It is estimated that Vietnamese people spent a total of EUR2.4 billion in overseas study in 2015. As more and more students go Unit: EUR billion abroad every year, the figure is expected to continue to grow. The increasingly affluent Vietnamese are also less dependent on scholarships, with only 4% of overseas students benefiting 1.5 from government scholarships in 2016, or approximately 5,519 students. The rising income has also changed the distribution of Vietnamese students in US institutions from predominantly community colleges to an equal distribution between community colleges and 4-year institutions.

Figure 34: Total spending of Vietnamese students on studying abroad, 2013-2015 2013 2015 Source: HSBC Remark: The figures above consist of all expenses related to studying abroad, including tuition fees, housing fees, living fees, travelling costs and other additional costs

Overseas study is a rising trend in Vietnam since 2010 2012 2017 the local education system is perceived as inferior to that of developed countries. It is noteworthy 90% 49% 30% that many overseas Vietnamese students do not return to Vietnam after their study. The scale and 4-year institution 23% 30% impact of this is unknown as there are currently Others 10% no statistics on the subject. However, most (including high school, 28% 40% international students cite Vietnam’s bureaucracy post-graduate, etc) and lack of employment benefits as their reason for not returning, especially if their studies abroad Figure 35: were costly. Proportion of students choosing different study programmes in the US, 2010-2017 Source: WENR, Capstone Vietnam

EVBN Education in Vietnam 34 III. Market trends

Growing demand for private general education

More and more Vietnamese parents send their children to private primary and lower-secondary schools because they find the public school curriculum heavy, inflexible and antiquated. Furthermore, public school children are often forced to attend “extra classes” in order to keep up with their peers, somewhat offsetting the affordability of those schools. Therefore, parents with rising income prefer private schools, where the curriculum is lighter and students have free time to develop soft skills and have fun.

Decline in non-public upper secondary schools

While the demand for primary and lower secondary education is rising, there has been a steady decline in non-public upper secondary education, both in the number of students and the number of schools. This can be attributed to several factors, such as: 213,776 The quality of certain non-public upper secondary schools does not match their high tuition fees. This raises much concern, especially since high school’s 186,246 quality can decide whether a student would get 175,416 174,158 into a good university in the future.

There is increased competition from vocational schools, which promise more secure jobs and

charge considerably lower tuition fees. 342 294 292 281 Other upper secondary schools are lowering their entrance benchmark, drawing students away from non-public schools (which typically do not require any entrance exam score, if at all). 2013-2014 2014-2015 2015-2016 2016-2017

Figure 36: Number of upper secondary Non-public upper secondary schools schools and students, 2013-2016 Non-public upper secondary students Source: Ministry of Education and Training

EVBN Education in Vietnam 35 More students are going to non-public universities

In the past, non-public universities were regarded as “expensive” and suitable only for people who could not get into public universities. That perception has changed, and now more students choose to attend non-public universities. These universities usually provide an international degree, either directly or through twinning programmes, which satisfy the growing demand for a foreign, high quality education. The curriculum is more flexible and generally taught in English, which better prepares students to the job marketplace.

243,975 227,574 232,367

176,669

65 58 60 60

2013-2014 2014-2015 2015-2016 2016-2017

Non-public universities Non-public universities students

Figure 37: Number of private universities and students, 2013-2016 Source: Ministry of Education and Training

Studying abroad gains popularity

Vietnam had 130,000 overseas students in 2016, with a CAGR 13-16 of 7.55%. Vietnamese students ranked 16th in the US, 3rd in Japan, 2nd in Korea, 9th in and 30th in Germany in terms of number in 2017. The growing number of study abroad consulting firms also evidences this trend. According to Department of Training and Education, Ho Chi Minh City had approximately 1,000 studying abroad consulting firms in 2015. In Hanoi, there were 300 registered firms at the end of 2015, double the 2014 figure.

EVBN Education in Vietnam 36 Increasing focus on STEM education

In preparation for Vietnam’s next major education Many supplementary schools and non-private reform, increasing attention is paid to Science, institutions have added STEM programmes to Technology, Engineering, and Math (STEM) their curriculum. In 2015, DTT Eduspec launched education, defined as follows: an after-school programme named “Hoc vien STEM” (STEM Institution) to help students with a passion in STEM subjects. FPT Primary schools have “STEM education is an interdisciplinary also incorporated STEM into their compulsory approach to learning where rigorous curriculum, starting in 2017. The Prime Minister academic concepts are coupled with real- has mandated the MOET to incorporate STEM world lessons as students apply science, education into the next revision of the national technology, engineering, and mathematics curriculum. Currently, 16 primary and lower in contexts that make connections between secondary schools are experimenting STEM school, community, work, and the global education under the joint supervision of the MOET enterprise enabling the development of and the British Council. Many education reformers STEM literacy and with it the ability to hope that the STEM model will shift Vietnam’s compete in the new economy” national curriculum from theory to practice and Tsupros, 2009 make Vietnamese’s workforce more competitive in the future.

Soft skills are a priority

As mentioned earlier, Vietnam’s curriculum doesn’t provide graduates with essential soft skills such as communication and presentation skills. In the 3rd quarter of 2017, approximately 237,000 recent graduates were unemployed nationwide, which, many speculate, was caused by their lack of soft skills. Therefore, soft skills classes and workshops have become popular amongst students who hope to avoid unemployment.

EVBN Education in Vietnam 37 IV. Market drivers

Government’s commitment to education

Education takes 20% of the government’s annual expenditure. Vietnam’s spending on education constituted 6.3% of its GDP in 2017, the highest among ASEAN nations and higher than that of more economically developed nations. The country is also working on a major education reform that is expected to come into effect in 2020.

A society that places great value on education

Rooted in , the Vietnamese culture has always valued education. Education is seen as the ultimate path to success and as a way to fulfil one’s filial duty and make the family proud. Teachers are highly regarded in Vietnam and parents are willing to go to great lengths to ensure that their children receive a good education. As the Minister of Education Phung Xuan Nha put it: “Vietnamese parents can sacrifice everything, sell their houses and land just to give their children an education.”

EVBN Education in Vietnam 38 V. Market barriers

Disparities in access to education

The proportion of out-of-school Unit: % children is higher in rural areas 5 years old and varies among different ethnic 39.7 groups. The Kinh ethnic group – Primary age (6-10) 34.5 the major ethnic group in Vietnam Lower secondary age (11-14) that includes 80% of the population 28.4

– the Tay, the Thai and the Muong 24.4 minority groups have low out-of- school children rates, whereas other 20.6 ethnicities have higher rates because 18.0 14.2

of poverty and the perception that 13.8 13.0 12.9 11.9 11.0 10.9

children should work to earn money. 10.5 9.7 8.4 8.1

Figure 38: Percentage of 6.2 5.2 4.5 3.6 3.3

out-of-school children among 3.0 2.8 2.6 2.5 different age groups, regions and 1.9 ethnicities in 2014 Urban Rural Kinh Tay Thai Muong Khmer Mong Other Source: ethnicities 2014 Global Innovation on Out-of-school children

Low teacher benefit

Despite being highly respected, teachers are not well paid, especially recent graduates. According to the MOET, teachers with less than 60 months of experience make EUR116.6 to 141.24 per month, which is lower than the minimum wage of EUR142.14 per month (for labour in sector I - urban areas according to Decree 141/2017). This drives many well-qualified teachers away from the education sector, and caused the emergence of “extra classes” as a supplementary source of income for teachers.

Theoretical and antiquated curriculum

Vietnam’s theoretical curriculum may help students fare well in academic competitions and might even explain why Vietnam achieves high PISA rankings, but it does not make students competitive compared to their global counterparts. Furthermore, the focus on memorisation is stressful for students and leaves them with little capacity to develop themselves otherwise. Finally, the scope of knowledge in universities is severely out-dated.

EVBN Education in Vietnam 39 VI. Opportunities and challenges for European companies

1. OPPORTUNITIES

Favourable demographic

In addition to growing incomes and confidence in the future, Vietnam’s demographics also stand to have a positive impact on the education market. As of 2017, around 60% of the Vietnam’s population, or more than 90 million individuals, were under 35 years of age. The enrolment rate of school-aged children has grown. Moreover, the recent growth in disposable income has allowed parents to better support their children to acquire the skills and knowledge they need to be competitive in the workplace.

Shortage of high-skilled labour

Despite adding 1 million labourers per year on the job marketplace, Vietnam cannot meet the demand for high-skilled workers. According to Vietnam Briefing, Vietnam’s labourers rank lower than those of Thailand, Singapore and Malaysia, and fall behind in language, cognitive, behavioural, and technical skills. The country faces a major skills gap, and domestic credentials are often not recognised. International qualifications are regarded as a competitive advantage, and even viewed as essential in some fields.

Government support initiatives

The government continues to be interested in the development of education institutions, whether private or public, from pre-primary education to vocational training and higher education. Additionally, new policies were established to regulate the quality of education and to ensure that graduates meet the needs of the market. Education features prominently in “Vietnam’s Socio-economic Development Strategy for the period 2011-2020,” which seeks to improve human capital development, increase enrolment rates in higher education, and modernise the education system.

EVBN Education in Vietnam 40 2. CHALLENGES

Limited scope of investment

Vietnam’s liberalisation of the education sector for foreign investment is limited to selected fields. As of 2017, foreign investment in education was opened to programmes in engineering, natural sciences, technology, business administration and business science, economics, accounting and international law, and to language training. Most of these fields are suited for higher education studies.

Opportunities for foreign investments exist but are limited to general education related to early childcare schools, primary schools and secondary schools.

Enrolment limitations

The number of Vietnamese children who can enrol in foreign- The restrictions placed by this owned institutions is limited by Decree 73/2012ND-CP (“Decree decree are in contradiction with the 73”), passed on 15th November 2012, as follows: increased demand for international • 0% for international pre-school; education, making investments in this field less attractive. • 10% for primary and secondary international school; and • 20% or less for international high school.

Licensing

Obtaining licenses is another challenge in Vietnam. In order to Although the process to obtain operate in the education sector, foreign schools must obtain these licenses is similar, they three types of licenses: must be obtained separately • Investment registration certificates and sequentially. And of course, investors would have to navigate • A decision permitting the establishment of educational the Vietnamese bureaucracy. institutions • A license for educational activities

Teaching Staff

With regard to staffing requirements, Decree 73 stipulates that foreign teachers must have at least 5 years of experience to teach twinning programmes at Vietnamese or foreign-invested schools, colleges and universities. At higher education institutions, 60% of courses must be delivered by permanent teachers, and 80% of teaching staff must hold postgraduate degrees. The percentage of lecturers with a doctoral degree in foreign colleges and universities must be at least 25% and 35% respectively. These requirements are difficult to satisfy even for state-owned institutions.

EVBN Education in Vietnam 41 CHAPTER 3 COMPETITIVE LANDSCAPE

Public sector

Private sector

Supplementary sector

Case studies

EVBN Education in Vietnam 42 I. Public sector

Public universities are usually students’ first choice. They are attracted not by the low tuition fees but by the quality of education and prestige of the degrees. Previously, all public universities had enrolment quota set by the MOET due to limited funding. This has changed in 2014 when several public universities were given financial autonomy and allowed to set their own enrolment quota.

II. Pivate sector

No Name Curriculum Fee Ages Description Location TAS provides a world-class American- A number of lunch and bus fees based curriculum that promotes high The American apply, as does a registration fee and standards of academic excellence Ho Chi School of Vietnam annual tuition fees. For a child in 3 to 1 American by enhancing student learning for Minh elementary school, the registration 18 theamericanschool. leadership in a global world. At TAS, City fee is EUR1,071 and tuition is edu.vn) over 20 nationalities are represented upwards of EUR6,286 annually. in the faculty and student body. With over 1,150 students from 40 Application Fee of EUR114 per Australian countries, AIS is a truly international student, an acceptance fee from Ho Chi International IB and 2 to community. At AIS, all students are 2 EUR1,142 to EUR2,285, and then an Minh School Vietnam IGCSE 18 given a high quality, fully accredited annual fee starting at EUR11,909 City international education across all (aisvietnam.com) (can be paid in instalments). year levels. Application Fee of EUR120, then a Registration fee of EUR2,430 per child for Primary and Secondary BIS is a selective, independent and British International school children (this is a one-off fee co-educational day school that Ho Chi IB and 2 to 3 School paid on entry), followed by a security provides a diverse international Minh IGCSE 18 (bisvietnam.com) deposit of EUR810 for Primary and education measured by British City Secondary children. Annual fees standards. start at EUR15,515 (can be paid in instalments) from Year 1 (Primary). European Administration fee of EUR150 per The European International International student, registration fee of around School Ho Chi Minh City (EIS) Ho Chi 2 to 4 School Ho Chi Minh IB EUR571 – EUR1,143 depending on focuses on academic excellence, Minh 18 City children’s age, and an annual fee of multiculturalism and treating each City (eishcmc.com) up to around EUR17,500 child as an individual. ISHCMC, the most established International Admission fee of EUR900 with an international school in the Ho Chi School of Ho Chi additional annual development fee. 2 to city, providing a broad-based 5 IB World Minh Minh City Annual school fees start at EUR14,423 19 international education for City (www.ishcmc.com) (can be paid in instalments). approximately 950 students of 49 different nationalities. Figure 39: List of popular private pre-primary and general education schools Source: expatarrivals, edarabia, and Ipsos Business Consulting analysis

Remark: List is based on Community Ratings in terms of Curriculum, Quality of Teachers, Campus Facilities, Value for Money on the Internet.

EVBN Education in Vietnam 43 Fee (excluding Application Year of No Name Origin Description Location Fee) entering RMIT University Vietnam brings a world-class Undergraduate degree education and globalised study environment ) programs: EUR22,623 – 29,250 to the heart of Asia. We are part of Melbourne- (288 - 384 credits) based university RMIT - Australia’s biggest tertiary Hanoi and 1 2000 institution. RMIT University Vietnam offers programs Ho Chi Postgraduate degree

Australia in business, technology, communication, design Minh rmit.edu.vn ( programs: EUR18,900 – 21,359 and fashion, and boasts an impressive range of USD (144 - 192 credits) extra-curricular activities that encourage students

RMIT University Vietnam to break new ground in their areas of interest. British University Vietnam provides teaching for University of London and Staffordshire University British University Vietnam is the first full British degrees university to offer a range of prestigious UK business ) - Staffordshire University degrees delivered entirely in Vietnam. The university is committed to providing a world class education 2 Programme (3 years): 2012 Hanoi EUR23,500 and learning experience for our students. Our 100% Singapore

buv.edu.vn international faculty brings together academics ( - University of London with extensive teaching experience as well as Programme (3 years): practitioner and research capabilities. British University Vietnam EUR27,300 - MBA Programme (2 years): EUR15,000 ) PSB College Vietnam is the official branch of PSB Undergraduate degree Singapore in Vietnam, and is 100% foreign-invested. Ho Chi 3 Programme (15 months): 2003 PSB College Vietnam provides twinning options U.K Minh

Vietnam EUR6,400 for bachelor programs, in collaboration with our

PSB College PSB College partners in Singapore, Australia and the UK. psbcollege.edu.vn ( ) AUV is ideal for those who demand superb instruction, advanced career skills, a supportive 4 Not available 2011 Danang U.S learning environment, and direct placement for in Vietnam auv.edu.vn graduate studies in the USA. ( American University )

Tokyo Vietnam Medical University, with their Undergraduate degree: educational philosophy of “Bringing health and 5 EUR1,930 per year 2016 well-being to everyone”, will bring a lot of human Hung Yen

Japan resources to Vietnam and train professionals who will be able to provide the best quality. Tokyo Human Health Tokyo tokyo-human.edu.vn ( Sciences University Vietnam

) Fulbright University Vietnam is a private non-profit Undergraduate degree university in the Saigon Hi-Tech Park in Ho Chi Minh Ho Chi 6 2016 U.S program (1 year): EUR14,822 City, Vietnam. It is one of Vietnam’s first private, non- Minh Fullbright Fullbright fuv.edu.vn

( profit institutions of higher education. University Vietnam

Figure 40: List of top private universities in Vietnam Source: expatarrivals, edarabia, and Ipsos Business Consulting analysis Remark: List is based on Community Ratings in terms of Curriculum, Quality of Teachers, Campus Facilities, Value for Money on the Internet.

EVBN Education in Vietnam 44 III. Supplementary sector

The most popular training centres are ILA, ACET, VUS, KTDC and British Council, with the highest number Facebook likes, according to Q&Me. Meanwhile, the providers with the largest coverage in terms of number of branches are Apax (with 50 branches), Than Dong (32), ILA (31), Apollo (28), and VUS (23).

ACET ILA VUS KTDC British Council

(acet.edu.vn) (ila.edu.vn) (vus.edu.vn) (ktdcgroup.vn) (britishcouncil.vn)

ACET is an ILA is an English VUS specialises in British Council Australia-based language training Founded in 2009, English courses provides a vast education provider that KTDC focuses for all groups, array of services organisation, has existed on providing ranging from in language which provides since 2001, courses for IELTS kids to adults training, UK Description language specialising in preparation and and corporates. education training, courses for both business English. The centre also promotion, standardised communication KTDC also provides test cultural tests, and and test provides overseas preparation exchange, and overseas study preparation study consulting. courses. capacity building. consulting. purposes.

Facebook likes 139,746 47,187 190,836 7,496 198,175 (as of 5 May) Number of 4 37 13 2 5 centres Hanoi Hanoi Location Nationwide Nationwide Ho Chi Minh and Ho Chi Minh and Ho Chi Minh

Academic English TOEFL, IELTS IELTS Communication Academic English Academic English English IELTS Communication Communication Course Corporate IELTS Academic English English English training Corporate Corporate Summer abroad training training study

Cost of basic IELTS training 7.82 7.63 3.78 5.49 10.00 (EUR per hour)

Native and Native and Native and Teacher Native only Native only Vietnamese Vietnamese Vietnamese

Figure 41: Top popular English centres based on Facebook likes, 2015 Source: Q&Me, Ipsos Business Consulting analysis Remark: Tuition fee is based on most basic IELTS course. Upon completion, learners are expected to achieve the score band 4.5 – 5.5.

EVBN Education in Vietnam 45 I Can Read 17 Saigon Vina 18 AMA 20 Cleverlearn 20 Outerspace 20 Apollo 28 Than Dong 32 ILA 37 Apax 50

Figure 42: Top English centres with most branches, 2015 Source: Q&Me

The market for English training can be also be divided by tuition fee. VATC 3.2 The high-end segment comprises VUS 3.2 of centres charging hourly rates Outerspace 4.1 above EUR5.67. The middle segment charges EUR3.24 – 5.67 per hour, AMA 4.9 while the low-end segment charges KTDC 5.5 below EUR3.24 per hour. YOLA 6.5 Apollo 6.5 Figure 43: ACET 7.3 Average listed tuition of English centres, 2015 ILA 8.1 Source: Q&Me, Ipsos Business Consulting analysis Wall Street English 8.9 British Council 10.0

Within the high-end segment, ILA Apax RMIT ILA currently holds the majority of the I Can Read market shares (42%) and the lead 3% position in the market. Following ACET 4% 4% 6% ILA are Wall Street English (15% of Apollo 8% 42% Wall market share), YOLA (10%), British Street Council and Apollo (8% each). 8% British English Council 10% 15% Figure 44: Market shares in terms of sales of high-end English centres, 2015 YOLA Source: Q&Me

EVBN Education in Vietnam 46 IV. Case studies

1. VINSCHOOL Website Resorts’ Fusion Source:

Established in April 2013, Vinschool started out as a not-for-profit education service provider in Hanoi and was committed to dedicate 100% of its profits to re- investment. The school is an affiliate of VinGroup, a conglomerate operating in real estate, retail, tourism and entertainment, and healthcare. A venture of VinGroup, Vinschool received EUR4.86 billion in chartered capital and is under full ownership of VinGroup. Vinschool possesses certain advantages over other local private schools in Vietnam. For example, Vinschool is able to partner with other members of the VinGroup conglomerate to organise career orientation programmes for its students.

Figure 45: Vinschool's logo and website Source: Vinschool

Figure 46: Vinschool's five core values Source: Vinschool EVBN Education in Vietnam 47 The school enjoys generous tax incentives from After 5 years of operation, Vinschool has a the government. In its first 4 years of operation, wide network of schools consisting of twelve Vinschool was exempt from corporate income , one primary school, one high tax, and in the subsequent 5 years, enjoyed a school and two K-12 schools. Admission is 50% exemption from tax payable. Vinschool highly selective and requires students to submit only started paying the full corporate income academic records and pass a unique entrance tax rate, equivalent to 10% per annum, after this exam administered by the school. In addition, period. priority is given to students who have attended another Vinschool, whose family resides in In its first year, Vinschool provided kindergarten VinHomes residences, or who are relatives of education to 1,500 students exclusively. In its VinGroup employees. second year, it expanded its operations to K-12 education with 6,300 students and recorded Vinschool’s education philosophy builds upon its first profit. In 2017, Vinschool expanded its five core values: inquisitiveness, proactiveness, network to Ho Chi Minh City with its Central integrity, caring, and respect. Its curricula Park campus and changed its status from not- centres on five foci: knowledge, English, for-profit to non-profit. The distinction is in the physique, arts, and soft skills. Once admitted tuition fee structure, which is set by dividing the to the school, students choose between two expected expenses by the expected number pathways: Vietnamese university preparation of students, leaving no margin. Any loss would or overseas study. Vinschool’s tuition fees range be marked up by VinGroup. This demonstrates between EUR268 and EUR418 per academic year Vinschool’s commitment to non-profit making. depending on the level.

2013 2014 20152016 2017

Established as a Expanded to K-12 Award from the Award from the Expanded to Ho not-for-profit school education system Ministry of Ministry of Chi Minh with its Education and Education and Central Park Training for Training for campus excellent excellent Focused on Number of students: achievement in achievement in kindergarten 6,300 implementing implementing comprehensive comprehensive Changed to education model education model non-profit

Number of students: 1,500 Number of students: 13,000 EUR14.4 million No revenue EUR8.2 million EUR18.4 million EUR25.6 million in the first 6 months Figure 47: Vinschool's development over the 2013-2017 period Source: Vinschool, Ipsos Business Consulting analysis

EVBN Education in Vietnam 48 2. VIETNAMESE-GERMAN UNIVERSITY Website Resorts’ Fusion Source:

First imagined in 2005, the Vietnamese-German University (VGU) launched in 2008 in Binh Duong, a province adjacent to Ho Chi Minh City. VGU was a collaboration between Herr Udo Corts, Hessen State Minister of Higher Education, Research and the Arts (HMWK), and Dr. Nguyen Thien Nhan, MOET. This initiative soon became a German-wide cooperation and broadened its stakeholder network to include the Federal Ministry of Education and Research (BMBF), the Ministry of Higher Education, Research and the Arts in Baden- Wuerttemberg (MWK), as well as the German Academic Exchange Service (DAAD), the World University Service (WUS) and the VGU-Consortium. VGU is now recognised as the world’s fourth largest bi-national university with German participation.

Figure 48: Vietnamese-German University's logo and website Source: Vietnamese-German University

EVBN Education in Vietnam 49 In the 2016-17 academic year, VGU had a body of nearly 1,200 students. With a new construction project scheduled to conclude in late 2018, the university expects to have capacity to host up to 12,000 undergraduate and postgraduate students. There are two admission periods for undergraduate students in May and July, and one in September for postgraduate students. For both levels, students must submit previous academic records and take an entrance test. German is not required upon admission, but the entrance examination tests English proficiency.

Below are the programmes offered by VGU and its German partner institutions:

Level of qualification Program German partner institution

Electrical Engineering and Frankfurt University of Applied Sciences Information Technology Frankfurt University of Applied Sciences, TH Köln Computer Science and Bonn-Rhein-Sieg University of Applied Sciences Bachelor Ruhr-University Bochum and Mechanical Engineering Otto-von-Guericke University Magdeburg Business Administration Goethe University Frankfurt Finance and Accounting Goethe University Frankfurt Computational Engineering Ruhr University Bochum Mechatronics and Sensor Hochschule Karhsruhe Systems Technology Sustainable Urban TU Darmstadt Development Master Global Production Engineering TU Berlin and Management University of Science of Furtwagen and Business Information System University of Science of Heilbronn SEPT MBA Leipzig University Figure 49: Programmes offered by VGU, 2018 Source: Vietnamese-German University

VGU’s seeks to provide world-class and well- scholarship-funded study visits to its German recognised qualifications to its students. partner universities. Teaching is conducted by visiting guest lecturers from Germany and high-ranking Vietnamese VGU’s programmes and curricula are delivered lecturers with international experience. With its in cooperation with German partner universities, close relationship with the German industry, VGU following German degree programmes. Upon is able to establish research collaborations and completion, students receive German degrees, knowledge exchanges between Vietnam and which are recognised worldwide. Besides English, Germany. In 2010, VGU’s first research centre was the main language of instruction, students founded, in conjunction with TU Darmstadt and are required to complete at least 4 courses of the University of Transport and Communications. , equivalent to a B1 level on VGU’s wide network also allows students to take the CEFR framework.

EVBN Education in Vietnam 50 Source: Fusion Resorts’ Website Resorts’ Fusion Source: 3. BRITISH COUNCIL VIETNAM

British Council (BC) Vietnam promotes UK’s culture, language and education in Vietnam. With a presence in Hanoi and Ho Chi Minh City (3 teaching centres in Hanoi and 2 in Ho Chi Minh), BC Vietnam covers a vast array of services in language training, UK education promotion, cultural exchange, and capacity building.

Figure 50: British Council Vietnam's logo and website Source: British Council Vietnam

BC Vietnam was founded in 1993 as the cultural the coordinator of two prestigious British section of the British Embassy in Hanoi. It scholarships, the Chevening Scholaship and has many achievements and has made great the Technical Cooperation Training (TCT). It contributions to the UK – Vietnam relations expanded to Ho Chi Minh City in 1997. In 1999, since its foundation. In 1995, BC Vietnam was BC Vietnam started promoting UK education and

EVBN Education in Vietnam 51 in 2000 held the first Education UK Exhibition, which welcomed 4,500 visitors. In 2001, BC Vietnam became independent from the British Embassy. Until 2002, BC Vietnam worked mainly with Vietnamese universities, institutions, and government officials; after 2002, it became open to public members and started its first English language teaching courses in Hanoi and Ho Chi Minh City. In 2009, the government awarded BC Vietnam the status of ‘Foreign Independent Cultural, Education and Non-Profit Organisation’ in recognition of its work in Vietnam.

BC played a key role in the establishment of the Vietnam-UK International Standards University under a Memorandum of Understanding between the two countries, and launched the Vietnam-UK Institute for Research and Executive Education. In 2016-2017, 13,000 students studied at BC Vietnam’s language centres, 2,500 English teachers participated in its programme for language instructors, and 72 government officials received full-time language training.

Today, BC Vietnam is renowned for its high-quality language training and the promotion of UK culture. Its language centres provide English courses for general purpose as well as for standardised test preparation (e.g., IELTS, GCSE, and A-level test), targeting youth, adults and the corporate Figure 51: British Council Vietnam's sector. BC offers a resourceful online learning LearnEnglish website system, comprising of the LearnEnglish website Source: British Council's LearnEnglish (learnenglish.britishcouncil.org) and mobile applications. It also serves as the authorised test university profiles, information on the application centre for the IELTS, GCSE, and A-level tests. BC process, and scholarships and financial support. also supports teachers with is Virtual Teacher BC hosts education fairs and alumni functions and Support website. works extensively in arts and creative industries, capacity building and community projects in In addition to language training, BC Vietnam Vietnam. carries out activities to promote UK-Vietnam After 25 years in the country, BC Vietnam has gone relations as well as UK culture and education. from a language training centre to a one-stop shop Interested readers can consult BC’s online for academic exchange and cultural promotion, as resources for studying in the UK, including well as a highly recognised capacity builder and information on living and studying abroad, partner to the government of Vietnam.

EVBN Education in Vietnam 52 CHAPTER 4 PROFILE OF END CONSUMER

EVBN Education in Vietnam 53 In 2015 - 2016, the National Centre for Socio- 110 Economic Information and Forecast surveyed households with children attending school in Unit: EUR/child/month six provinces/cities (Hanoi, Phu Tho, Thanh Hoa, Ha Tinh, Dong Nai and Ho Chi Minh). The total number of households surveyed was 3,200. Results have shown that Vietnamese household’s spending on education is relatively high. On average, a household spends about EUR93 per 41 child monthly, with households in urban cities spending 2.7 times more than those in rural areas (EUR110 to EUR41 per child per month). The average household’s education spending rate was 34.7%, higher in urban cities than in rural areas (35.5% compared to 30.5%). Education spending rates in Hanoi and Ho Chi Minh City are similar and the highest amongst the six provinces/cities Rural Urban (about 36.5%). Ho Chi Minh City has the highest Figure 52: Urban-rural spending on education, 2016 average expenditure of the six provinces/cities Source: National Centre for Socio-Economic Information and Forecast (EUR125 per child each month); Hanoi came Methodology: Survey was conducted on 3,200 households second (EUR100 per child each month). in six cities/provinces in Vietnam (Hanoi, Phu Tho, Thanh Hoa, Ha Tinh, Dong Nai and Ho Chi Minh). Education accounts for the major part of Vietnamese household’s expenditures. In the urban areas such as Ho Chi Minh City, it was recorded in 2016 that nearly 500,000 out of almost 600,000 primary students were taking foreign language supplementary classes, mainly in English (accounting for 50%). Another 10,000 students were learning other foreign languages such as French, Japanese, Korean, Spanish, and Chinese. The reasons for this include genuine learning demand from students, insufficient curriculum coverage, teachers making a living due to low salary and high expectations from parents.

Datasection Vietnam conducted a data mining research of online forums and found that most people take English classes for work purposes, that is, job interviews, communication with customers, and travel. This is great news for centres focusing on teaching Communication English.

Other 8.9%

IELTS test 3.4%

University entrance exam 4.4%

TOEIC test 4.7%

Enhance 6.9%

Basic knowledge 8.9%

Communication at work 62.8% Figure 53: Reasons for studying English, 2016 Source: Datasection Vietnam Methodology: Online data mining and analysis of online discussion threads on related topics.

EVBN Education in Vietnam 54 When choosing an English centre, people list as their top priority flexible schedules for a variety of levels.

Trial classes 12.1%

Location 12.5%

Program 16.8%

Fees 17.2%

Time 26.4%

Figure 54: Top 5 criteria for choosing an English school, 2016 Source: Datasection Vietnam

Methodology: Online data mining and analysis of online discussion threads on related topics.

EVBN Education in Vietnam 55 CHAPTER 5 REGULATORY AND LEGAL FRAMEWORK

Laws and regulations on education in Vietnam

Legal framework for foreign investors

Relevance and Impact of EVFTA

EVBN Education in Vietnam 56 I. Laws and regulations on education in Vietnam

The Law on Education 2005, the Law on education and continuing education. The MOET’s Vocational Training 2006 and the Law on Higher responsibilities cover a vast array of aspects in Education 2012 constitute the legal framework education, from to curriculum, for education institutions that operate in Vietnam. textbook, student enrolment and management, The first two laws set out the education system assessment procedure and quality assurance, structure, quality assurance mechanisms, levels infrastructure and facility, and staffing. Moreover, of qualification, objectives, duration, and syllabi the MOET is in charge of education development for both education and vocational training. The plans and policy proposals related to education. Law on Higher Education 2012 governs tertiary- In short, the MOET is the highest authority in the and-above education, and deals with quality field of education in Vietnam. assurance, research, scope of universities, and classification and ranking. Beside laws on general education, investors should also refer to laws on supplementary The MOET is the government body responsible education, such as the Vietnam’s Language for the governance of all education and Proficiency Framework, Circular 17/2012/TT- vocational training activities in Vietnam. The BGDĐT on private tutoring, and Circular 04/2014/ MOET’s centralised authority covers every level TT-BGDĐT on Promulgating the Regulation on the of education in the country, including pre-school, management of life skills education and extra- general education, professional education, tertiary curricular educational activities.

II. Legal framework for foreign investors

Foreign cooperation and investment

The most important regulation for foreign and kindergartens, twinning programmes, and investors is Decree No.73/2012/ND-CP, which representative offices of foreign education specifies requirements for foreign-invested institutions. The decree is being reviewed to education institutions about chartered capital, include quality assurance mechanisms for facility, curriculum and teaching staff. This decree . The proposed changes are applies to education and vocational training, outlined in Figure 55 on the next page. foreign-invested tertiary institutions, schools

EVBN Education in Vietnam 57 Decree No.73/2012/ND-CP on the foreign cooperation and Draft decree on foreign investment in education investment in education

Minimum required 300 billion VND 1,000 billion VND investment capital Each school will determine the proportions of Children under 5: Not admitted Limits on number of international and domestic students. Foreign- Primary & : Not enrolled Vietnamese invested institutions are required to include a exceeding 10% students basic Vietnamese curriculum such as Vietnamese High school: Not exceeding 20% language, history, geography and culture. Institutions with registered plan to operate for more than 20 years Foreign investors are allowed to use existing Facilities need to establish their own facility education facilities. prior to recruiting students. 80% of instructors must hold a All instructors are required to hold a master’s master’s degree or higher. Qualifications of degree or higher. instructors in HEIs 35% of instructors must hold a doctorate. 50% of instructors must hold a doctorate. Types of legal Foreign-invested institutions are Foreign-invested institutions are affiliates of the entities Vietnamese legal entities. investment entities.

Figure 55: Proposed changes to Decree 73/2012/ND-CP Source: Ministry of Education and Training

On investment and enterprise

The Law on Investment 2014 considers education and vocational training a priority and offers the following incentives for foreign investments:

• 10% CIT for entire life of the project • 4 years of CIT exemption • 5 years of 50% reduction on payable CIT

Meanwhile, the Law on Enterprises 2014 defines different entity structures for foreign education institutions:

• 100% foreign-owned institutions: An entity that receives 100% capital from the foreign investor(s). • Joint venture: An entity jointly established by one foreign and one Vietnamese investor. • Business cooperation contract: Most frequent form of foreign investment in education in Vietnam, in which foreign investors cooperate with Vietnamese investors without the need to create a new entity. • Representative office: A cooperation form that allows foreign institutions to build local relationships and investigate the market prior to its official entry into the market.

EVBN Education in Vietnam 58 On education programmes, curriculum and textbooks

Foreign investors should also note that the MOET Government’s Decree No. 75/2006/ND-CP of has the authority to regulate the programmes, August 2, 2006, Detailing and Guiding a number curricula and textbooks used in general education, of articles of the Education Law. At the higher according to Decree 31/2011/ND-CP on Amending education level, MOET mandates compulsory units and supplementing a number of articles of the without clearly specifying which ones.

III. Relevance and Impact of EVFTA

In response to the demand for high-quality, world-class education in Vietnam, many foreign investors, including European companies, are looking to enter the market. The EU-Vietnam Free Trade Agreement (EVFTA), which is set to come into force in 2018, is aligned with the Most-Favoured Nation principle. Accordingly, if a World Trade Organisation (WTO) member offers lower customs duty to another country, this favourable treatment must be applied to all other members of the WTO. As such, European countries can expect to be treated at no disadvantage to other countries.

It should be noted, nonetheless, that Vietnam’s education field is not fully open to foreign investors. The higher education space is restricted to a number of selected disciplines, i.e., engineering, natural sciences, technology, business administration, business science, economics, accounting, international law, and language training. Other fields such as medicine, civil law, policy, etc., are not yet open to foreign investors. In the general education space (from pre-school to high school), the government places restrictions on the number of Vietnamese students that foreign-owned institutions can recruit, as per Decree No.73/2012/ND-CP.

Level of institutions Regulation Vietnamese children under five years of age are not allowed to enrol in foreign Pre-school education programmes Primary and middle school 10 per cent limit on Vietnamese pupils High school 20 per cent limit on Vietnamese pupils No limitation on the percentage of Vietnamese students at foreign-invested Tertiary universities and colleges Figure 56: Enrolment of Vietnamese students into foreign-invested education institutions according to Decree 73/2012/ND-CP. Source: Ministry of Education and Training

To see the complete tariff schedule under the EVFTA, please follow this link: http://wtocenter.vn/content/full-text-vietnam-eu-free-trade-agreement-evfta

EVBN Education in Vietnam 59 Summary

Vietnam’s education industry is dominated by public institutions. However, Vietnamese people find the private sector and overseas institutions more and more appealing. They are also looking to enhance their profile by taking supplementary language and soft skills courses. Noteworthy trends in education include a growing demand for non-public general education and non-public higher education, more interest in overseas study, a rising attention to STEM education, and more emphasis on soft skills training.

Overall, Vietnam is a promising destination for education investments. Interested investors will benefit from the government’s support, Vietnamese’s favourable attitude towards education, and rising spending on education throughout the country. As of 2017, the government’s spending on education reached 6.3% of the total GDP and accounted for 20% of public expenditure. A major education reform is expected in 2020. Meanwhile, Vietnam’s demographics is favourable to foreign education investors: people place great value on education, and parents are willing to go to great lengths to get adequate education for their children. The population is young and enjoys higher disposable income, which can be spent on education services.

At the same time, foreign investors should be aware of a few caveats. Vietnam has only opened a few selected fields of education to foreign investments. The government does not allow children under 5 to attend foreign-invested pre-schools. It also restricts the recruitment of Vietnamese students in primary and secondary schools. Applying for the required licenses is a lengthy and bureaucratic process. Finally, instructors in foreign-invested higher education institutions must have 5 years of teaching experience and 80% of the teaching staff must have postgraduate degrees.

A few laws and regulations should be kept in mind when investing in education in Vietnam. The Law on Education 2005, Law on Vocational Training 2006, and Law on Higher Education 2012 set out the legal foundations for Vietnam’s education system. The MOET is the centralised authority for education policy and planning in the country. Any programme structure, curriculum and textbook is regulated by the MOET, and the government mandates compulsory units in higher education. Investors should also be mindful of Decree 73/2012/ND-CP on the foreign cooperation and investment education and its new draft, which is expected to be adopted soon. Finally, investors should refer to the Law on Investment 2014 and the Law on Enterprises 2014 for investment incentive and market entry forms.

EVBN Education in Vietnam 60 LIST OF TRADE FAIRS AND EXHIBITIONS

Name & Content Time Venue Organiser

Vietnam Global Education Fair Danang, Hanoi, (https://vietnam.globaleducationfairs.net) Ho Chi Minh City International higher education HCMC: Sheraton Annually BMI Media Saigon Hotel

HN: Pullman Hanoi Hotel

GSE-beo International Education Fairs (http://www.beo-corp.com/services/exhibitions.html#201705) Hanoi, Annually GSE-beo International higher education Ho Chi Minh City

Vietnam Education Conference (http://vec2018.vn/home) National Assembly’s Improving Vietnam’s education Committee Annually Hanoi for Culture, Education, Youth and Children (CCE)

SEAMEO International Conference on TESOL (http://www.vnseameo.org/events/9th-annual-international- conference-on-tesol-breakthroughs-in-english-language- teaching-in-the-21st-century/) Improving Vietnam’s education Annually Ho Chi Minh City SEAMEO RETRAC

EVBN Education in Vietnam 61 SEAMEO International Conference (http://www.vnseameo.org/InternationalConference2018/) Improving Vietnam’s education Annually in Ho Chi Minh City SEAMEO RETRAC July

EduExpos (http://eduexpos.edufindme.com/) FPP EDU Media International Higher Education Annually in Hanoi and and EDUFINDME. Spring Ho Chi Minh City com

StudyUSA Higher Education Fair (http://recruit.capstonevietnam.com/) Big cities US Higher Education including Hanoi, Capstone Bi-annually HCMC, Da Nang, Vietnam Hai Phong and Nha Trang

International Higher Education Day in Vietnam (http://vied.vn/en/) International Higher Education Vietnam International Hanoi and Ho Annually Education Chi Minh City Development (VIED)

Study UK Exhibition (https://www.britishcouncil.vn/en/study-uk) UK Education Big cities including Hanoi, Annually British Council Hai Phong, Da Nang and HCMC

EVBN Education in Vietnam 62 New Zealand Education Fair (https://www.studyinnewzealand.govt.nz/) Hanoi and Education New New Zealand Education Annually Ho Chi Minh City Zealand

Canada Education Fair (https://vietnam.canada-edu.org/trang-chu/hoi-thao-trien-lam.html) Embassy of Canada Education Hanoi, Da Nang Canada and Annually and Ho Chi Minh Consulate City General of Canada

EVBN Education in Vietnam 63 MAIN ONLINE AND PRINTED PUBLICATIONS

PwC’s Report Spotlight on Vietnam: General Statistics of Vietnam’s Report Technavio’s Report on K-12 Education The leading emerging market Vietnam Yearbook 2016 – Education Technology Market in ASEAN

UNESCO’s Reports on Higher Asian Development Bank’s Reports HSBC’s Reports on ASEAN Education in Asia: Expanding Out, on Viet Nam: Preparing the Higher Connected Expanding Up Education Sector Development Project

Australian Government’s Overview Hogan Lovells’ Report on The Consulate General of Canada on the Legal Framework affecting Vietnamese Higher Education: in Ho Chi Minh City’s Report on the Provision of Foreign Education Opportunities and Challenges for International Education Market in in Vietnam foreign institutions Vietnam

EVBN Education in Vietnam 64 USEFUL CONTACTS

Ministries and Administrations: Ministry of Education and Training (MOET) 35 Dai Co Viet, Hoan Kiem District, Hanoi, Vietnam Phone: +84 243 869 5144 Website: https://www.moet.gov.vn

Vietnam International Education Cooperation Department (VIED) 21 Le Thanh Tong, Hoan Kiem District, Hanoi, Vietnam Phone: +84 243 933 5795 Website: http://vied.vn/en/

Associations:

Vietnam Association for Education for All (VAEFA) 7th floor, 27 Huynh Thuc Khang, Dong Da District, Hanoi, Vietnam Phone: +84 243 773 5303 Website: http://vaefa.edu.vn

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America and Japan reporting big gains in Vietnamese enrolment. http://monitor.icef.com/2016/04/america-and-japan-reporting-big-gains-in-vietnamese-enrolment/ International School of Ho Chi Minh City. (n.d.). www.ishcmc.com International University. (2017). Admission to Master’s degree. https://www.hcmiu.edu.vn/Tuyen-sinh-Admissions/Tuyen-sinh-Sau-dai-hoc-Graduate-Admission/ Chuong-trinh-lien-ket-Co-operative-training-programs/Tuyen-sinh-Thac-si-Masters-Program InterNations. (n.d.). Education in Vietnam. https://www.internations.org/vietnamexpats/ guide/living-in-vietnam-15470/education-in-vietnam-3 Japan Students Services Organisation. (2017). Result of an Annual survey of International Students in Japan 2017. https://www.jasso.go.jp/en/about/statistics/intl_student_e/2017/index.html Juslanded. (n.d.). The Vietnamese Education System. https://www.justlanded.com/english/Vietnam/Vietnam-Guide/Education/The-Vietnamese-education-system Khoa, V. (2018). 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EVBN Education in Vietnam 69 Minh, H. (2017). Nguoi Viet chi 3 ty USD cho con di du hoc, cung chi ngang tien uong bia 1 nam ma thoi! http://cafebiz.vn/chu-tich-dai-hoc-fpt-nguoi-viet-chi-3-ty-usd-cho-con-di-du-hoc-cung-chi-ngang-tien- uong-bia-1-nam-ma-thoi-201703101533295.chn Moc, B. (2017). Vinschool chuyen sang mo hinh ‘khong loi nhuan’, Vingroup san sang bu lo. https://vietnambiz.vn/vinschool-chuyen-sang-mo-hinh-khong-loi-nhuan-vingroup-san-sang-bu- lo-34180.html Nga, M. (2018). Vietnamese Students Among Top Performers In Developing East Asia And Pacific: Report. https://e.vnexpress.net/news/news/vietnamese-students-among-topperformers- in-developing-east- asia-and-pacific-report-3724216.html Nguyen, C. (2014). Truong THPT tu thuc kho tram be. https://nld.com.vn/giao-duc-khoa-hoc/truong-thpt-tu-thuc-kho-tram-be-20140920210747126.htm Nguyen, H. (2016). Chi tieu cho giao duc trong cac ho gia dinh o Viet Nam nam 2015. http://ncif.gov.vn/Pages/NewsDetail.aspx?newid=18779 Nguyen, N. 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Income Vs Education: Foreign Experts Puzzled By Science, Math Scores Of Vietnamese Students. https://e.vnexpress.net/news/news/income-vs-educationforeign- experts-puzzled-by-science-math- scores-of-vietnamese-students-3514974.html Thanh Nien News. (2017). Cang cam, day them - hoc them cang tang: Nhieu ke ho trong quy dinh. https://thanhnien.vn/giao-duc/cang-cam-day-them-hoc-them-cang-tang-nhieu-ke-ho-trong-quy- dinh-878124.html Thanh Nien News. (2015). Dieu kien vao hoc lop 10 tai TPHCM. https://thanhnien.vn/giao-duc/dieu-kien-vao-hoc-lop-10-tai-tphcm-563928.html Thanh Nien News. (2014). Gan 75% phu huynh cho con hoc them. https://thanhnien.vn/giao-duc/gan-75-phu-huynh-cho-con-hoc-them-453775.html Thanh Nien News. (2017). TPHCM khong tang hoc phi truong cong lap nam hoc 2017-2018. https://thanhnien.vn/giao-duc/tphcm-khong-tang-hoc-phi-truong-cong-lap-nam- hoc-20172018-842564.html Thanh, H. (2017). 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EVBN Education in Vietnam 71 Vietnam Briefing. (2016). Industry Spotlight: Vietnam’s Growing Appetite for Education. http://www.vietnam-briefing.com/news/industry-spotlight-vietnams-growing-appetite-education.html/ Vietnam News. (2016). Investment risks and opportunities in the VN education system. http://vietnamnews.vn/economy/296253/investment-risks-and-opportunities-in-the-vn-education- system.html#6iEV5dEWryvMgbhS.97 Vietnamese-German University. (n.d.). www.vgu.edu.vn Vinschool. (n.d.). http://vinschool.com Vu, T. (2016). Truoc khi chuyen mo hinh: Vinmec dang lo, Vinschool lai khong dang ke. https://vietnambiz.vn/truoc-khi-chuyen-mo-hinh-vinmec-dang-lo-vinschool-lai-khong-dang-ke-3367. html Vy, H. (2017). Ca nuoc dat ty le hon 92% tre 3-5 tuoi den truong. http://www.nhandan.com.vn/giaoduc/tin-tuc/item/33148602-ca-nuoc-dat-ty-le-hon-92-tre-3-5-tuoi-toi- truong.html World Education News & Reviews. (2017). Education in Vietnam. https://wenr.wes.org/2017/11/education-in-vietnam World Education News & Reviews. (2013). Vietnam: Trends in International and Domestic Education. https://wenr.wes.org/2013/06/vietnam-trends-in-international-and-domestic-education

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