EdTech in Vietnam – A Sector Regulatory Analysis
In recent years, a significant number of investors have shifted their focus towards the education sector in search of more opportunities in Vietnam, and specifically towards the EdTech market vertical, which is still at its early stages in the country. As estimated, the EdTech Market in Vietnam may value up to USD 3 billion. In addition, the Vietnamese authorities have promoted E-learning initiatives, enabling parents and students to switch their attention towards online learning and digital resources.
In this article, we will seek to understand what are the market-entry provisions for investors seeking to commence activities in the EdTech sector, with licensing insights on its adjacent industry verticals such as e-commerce, trading, online retail and IT.
EdTech is seen as the combination between Education and Technology, referring to an area of technology devoted to the development and application of tools designed to facilitate education. EdTech market vertical helps challenge the status quo set out by the traditional education sector by opening up a broad range of resources to global student networks, within an ecosystem accessible anywhere, anytime using an internet connection.
In Vietnam, there are several popular segments of EdTech such as:
- Early Childhood Education (Sunbot, Kidup, Monkey Junior, Kyna Kid, Kidtopi, Ky nang thoat hiem cho be, Touch English, etc.);
- Learning Management Systems (Wewiin, Ai Vietnam, etc.);
- Next-Gen Study Tools (Edunet, Edu2Review, Lumosity, etc.);
- Broad Online Learning Platforms (Kyna.vn, Unica, Edumall, Brands Việt Nam, Wikilady, Adabook, Testbank, Alada, etc.);
- Tech Learning (Code4Startup, CoderSchool, MClass, etc.);
- Language Learning (Akira, Antoree, VOOA, Tienganh123, hellochao, TFlat, Leerit, Dekiru.vn, etc.);
- Enterprise Learning (Nexedu, OMT, DES, etc.);
- Online to Offline (Topica, Tanaca, AiTalk, etc.);
- Test Preparation (Hocmai.vn, Moon, Tuyensinh247, Zuni, ViettelStudy, etc.); and
- School Administration (VNPT school, SMAS, LMS, etc.).
Regulations and legal framework governing EdTech in Vietnam
In practice, Vietnam has a complex and diverse classification of the educational system, including Kindergarten, general education with primary, junior, and high school, vocational education, university and post-university programs. Besides that, to meet the needs of today’s economic and social development, many short-term courses on soft or life skills, national or international practicing certificate, or certificates for foreign languages become popular with diverse forms.
EdTech still remains a vague area under the Vietnamese legal framework since it has not been explicitly specified in legal documents. From 2010s, the Vietnamese Government has implemented projects to develop EdTech, however it has only focused on small scale subject base projects with limited objectives, mostly for public schools.
Moreover, there is a gap between the relevant education regulations and the practical processes due to the remarkable development of EdTech in Vietnam, which creates several obstacles. For instance, in 2017, in order to establish a language or computing centre, by law, the centre has to “provide adequate facilities, equipment, teaching materials and sources of financing for ensuring training quality in conformity with the centre’s development plan and operating scale.” However, this condition becomes worthless in case of e-learning when the preparation for facilities and equipment are the responsibility of both trainers and learners. Students would bear the responsibility for the weak conditions in their own place of study, the efficiency of the computer they use, or the weak internet connection in their home, instead of the centre or teacher. As a result, in practise, many EdTech companies asses this legal risk and choose to only register the technology and/or trading activities, in order to achieve better commercial purposes.
Due to the lack of clarity in the legal system, investors who seek to undertake EdTech related business activities commonly review their requirements case by case, and register different operational activities such as Educational services, IT service, E-commerce, in order to obtain further corresponding sub-licenses particular for their business model (i.e. License of English Teaching/ Information Technology Centre establishment, Certificate on Vocational Education and so on).
At present, the Ministry of Training and Education has been aware of these regulatory impediments and inconsistencies, and is working on a draft Circular for E-learning activities, which can further clarify the authorities’ opinion on EdTech activities in Vietnam.
Market entry scenarios and licensing prerequisites
In the Vietnam market entry process, investors are generally required to register all business lines corresponding to the day-to-day services they are seeking to provide:
- Educational services
- Technology services
- Trading services
Depending on the specific field of operations, the EdTech investor will select and apply for the suitable business lines which will allow the investor to operate in Vietnam in a compliant manner:
- If the EdTech company creates its own online courses and provides e-learning activities to the users, it should register business lines to cover the educational and technology activities.
- In case that the EdTech company distributes online courses/packages of a third party to users but doesn’t create its own lectures/programs or provides an e-commerce platform for education, it may only need to register business lines to cover the technology and trading activities, provided that the curriculum it distributes meets all the legal requirements.
- If the EdTech company provides a technological solution to support classroom-related tasks such as checking attendances; assigning and marking the homework; keeping track of the study progress; providing library of study materials, etc, it may only need to register the Technology correspondent business lines.
| Activities | Market access limitation | National laws |
| Education Services | The Higher education services (CPC 923), Adult education (CPC 924), Other education services (CPC 929 including foreign language training) but please note that: (a) The education content must be approved by Vietnam’s Ministry of Education and Training; and (b) Vietnam only allows the technical, natural sciences and technology, business administration and business studies, economics, accounting, international laws, and language training fields. the fields of technical, natural sciences and technology, business administration and business studies, economics, accounting, international laws, and language training. | Education and training (VSIC 8511 – 8560) The respective qualified laws may have different ways of making regulations depending on (i) the nature of the activities; (ii) the type of subjects or objectives; (iii) the level of target learners; and (iv) the learning hours and so on. |
| Technology services & E-commerce platforms | Computer and Related Services (CPC 841-845, CPC 849) Please note that Vietnam has not committed to open the market for Web portals (E-commerce Platforms), therefore the WFOC or FOC will be considered and approved depending on its specific activities. (for details on e-commerce, please refer to our article here) | Computer programming activities (VSIC 6201) and Web portals (VSIC 6312) for e-commerce. |
| Trading services | Retailing services (CPC 631 + 632, 61112, 6113, 6121) but not for some special products such as books, newspapers and magazines, video records. (for the details on trading, please refer our article here) Wholesale trade services (CPC 622) | Retail sale of: · Computers, peripheral units, software, and telecommunications equipment in specialized stores (VSIC 4741); · Other retail sale in non-specialized stores (VSIC 4719); · Retail sale via mail order houses or via Internet (VSIC 4791); · Other retail sale not in stores, stalls, or markets (VSIC 4799) |
