Foreign investment in Vietnamese higher education
By Ross Macleod
On my way home from work yesterday, I alighted upon the pavement with my customary good timing just as an old woman was throwing a bucket of water out onto the street and consequently all over my legs. Drawing on my fine education in the Vietnamese language, I said nothing. As I squelched my way home I thought to myself, education is extremely important. Lack of it can leave you paralysed in the most crucial of moments.
Education is taken very seriously in Vietnam, still influenced by Confucianism which places high importance on education and sees it as the primary means of advancement. The high esteem in which education is held together with the rapidly growing market has put improvement of education, specifically higher education, at the forefront of the country’s economic strategy and consequently paved the way for foreign investment opportunities in the Vietnamese higher education system. These opportunities can be broken down into three sectors: recruitment of Vietnamese students to study at the foreign university, joint programmes with local universities in Vietnam, and setting up of wholly independent campuses in Vietnam.
First we will look at the recruitment of Vietnamese students to study in Scotland. In terms of recruitment of foreign students Vietnam is seen as one of the top four emerging markets due to the strengthening economy and emphasis on education. According to the Vietnamese Ministry of Education and Training 125,000 Vietnamese students studied overseas in 2013, a 15% increase over 2012, with the figure being expected to rise continuously. Around 90% of those students in 2013 were self-funded, with Vietnamese families spending up to $1.875 billion on overseas study-related expenses (around 1% of the GDP). There is still a big market available for Scottish universities to enter into in terms of recruiting students. So far Vietnamese students have gone mainly to USA, Australia, Singapore and other Asian countries. Having spoken to a number of senior high school students, they stated that the reasoning behind this is that these countries have better access to scholarship and financial support opportunities. It would be advisable for universities seeking to enrol more Vietnamese undergraduate students, to consider promoting scholarship and financial aid opportunities. Vietnamese students tend to be academically well prepared, but they at times lack the full financial resources to complete their studies in the UK. However, Scottish universities are held in particularly high regard in Vietnam, especially in terms of employability, providing the doorway for Scottish universities to develop recruitment of Vietnamese students.
In terms of actually recruiting Vietnamese students, many foreign universities have traditionally used academic agents. However, recently academic agents have come under much public scrutiny in Vietnam and have been found in some cases to be conducting their business in less than a strictly professional and ethical manner. Of course this does not apply to the profession as a whole, but caution should be maintained when dealing with local academic agents and the proper checks made to ensure they are fully registered with the government in line with the recent stricter licensing laws. Universities also have the option of attending or conducting higher education fairs in Vietnam to rouse the interest of Vietnamese students. Further to this it is possible for foreign universities to establish representative offices in Vietnam. Representative offices cannot directly engage in commercial activities in Vietnam, but can be used to organise consultation, information exchange, seminars, and exhibitions on education to promote the university with Vietnamese students. Representative offices can also be used to conduct market research including on potential partner Vietnamese universities, which leads us to the sector of joint programmes.
Collaboration with international higher education institutes has recently been prioritised by the Vietnamese government. It is hoped that these collaborations will improve the number and quality of options available for Vietnamese students entering higher education in Vietnam, and in turn better equip graduates to compete in the global marketplace. A Vietnam-UK Education Cooperation Forum was held in London last September with over 60 UK institutions and educational organisations and 20 universities and organisations from Vietnam in attendance to discuss ways to strengthen ties between the two countries. A Joint Statement between the Ministry of Education and Training, the British Council in Vietnam and UK Higher Education International Unit was signed at the Forum with the aim of focusing on four areas of cooperation, which include policy dialogue, education development, academic and student exchange and qualification recognition and reference. This has come at a time when the government has passed legislation specifically dealing with foreign investment and cooperation in education in order to boost foreign involvement in Vietnam’s higher education sector. It is hoped foreign investment will help improve the quality of teaching and degrees awarded in Vietnam.
These legal measures include the Higher Education Law passed by National Assembly in 2012 and Decree 73 on foreign investment and cooperation in education issued by the Government in 2012. Decree 73 has a specific section on joint programmes between foreign and Vietnamese higher education institutes. Joint programmes must be approved by the Ministry of Education and Training, and will be given a term of 5 years if approved which can be extended further at the time of expiry. The options available for joint programmes include face to face training provided under the foreign programme, or under a joint-programme developed by both the foreign and Vietnamese parties. The programme can be wholly delivered in Vietnam or with part of the course taught in the foreign country. Also, Decree 73 allows for either the Vietnamese or the foreign institute to award the degrees and diplomas. If the foreign institute awards the degrees and diplomas then the subjects must be taught in English, with teaching only being allowed in Vietnamese for joint programmes which offer Vietnamese degrees and diplomas.
Decree 73 also brought in stricter controls on the quality of joint-programmes being offered, after a number of universities in the early parts of this decade were found to be offering low quality courses from, in some cases, fake overseas institutes. Now all teachers involved in delivering the courses must have at least 5 years teaching experience and relevant qualifications. Also, before the joint programme can be implemented its quality must be accredited overseas or meet quality standards of accreditation in Vietnam. However, this should not be seen as off putting, as for well-established Scottish universities the application process will almost certainly be successful. So far there are 432 TNE programmes in Vietnam, of which 55 are with British universities and there is a desire for many more.
As stated earlier, foreign universities are permitted to open representative offices, which can be used to research and meet with potential local partner universities. Representative offices can also be maintained to oversee the implementation of any contracts with local partner universities and are an effective way of maintaining links and communication between the Vietnamese institute and the foreign university.
Decree 73 also deals specifically the establishment of wholly foreign owned and joint-venture higher education institutes in Vietnam. It provides certain rules & regulations of registration and requirements that foreign institutions gain accreditation or other formal permission from the Vietnamese authorities before operation. The requirements are mainly in terms of providing evidence of the foreign universities legal status in its own country, qualifications of teaching staff, teaching in English (if an English language foreign university), the foreign university’s investment plan for Vietnam and evidence of sufficient funds to follow it through successfully. In order to establish a higher education institute a total investment fund of at least VND 300 billion is required, with an average investment level of at least VND 150 million per student. Importantly, the subjects to be taught must also be approved, and must not go against Vietnamese culture and ethics, with subjects relating to relating to national security, defence, politics and religion being specifically prohibited. Subject areas that the Vietnamese government has committed to under the World Trade Organisation commitments include engineering, natural sciences, technology and business administration, as well as business science, economics, accounting, international law and language training. However, as with the other areas of the application process approval will be on a case by case basis and can include other subject areas. The application process involves obtaining a number of licenses, each having a similar application process including the submission of the same documents, but each must be applied for separately with repetition of much of the documentation and forms. This requires the services of a reputable law firm to ensure compliance and ease of process with the Vietnamese authorities.
Importantly there is a huge desire for foreign based education in Vietnam. All Vietnamese parents want their children to have degrees, and post-graduate degrees are becoming increasingly prized. Vietnamese students are also looking more to the international sector and as a consequence are seeking degrees taught in English that will be more highly recognised by foreign companies in Vietnam and abroad. I spoke to two students currently studying at RMIT Vietnam in Ho Chi Minh City, Phuong Le Huynh Ngoc and Dang Nga Phuong. Both Ngoc and Phuong stated that they had chosen to study at RMIT Vietnam as it offered an international standard education in English but at a far lower cost than actually going overseas to study. They both expressed that there is a need for more career focused teaching in Vietnamese universities and that foreign universities such as RMIT Vietnam and foreign universities implementing joint-programmes satisfy this need where local universities cannot.
Vietnam is an exciting market for investment in education. It is on its way to becoming a truly middle income country and there is a desire for quality in everything and specifically in higher education. As noted earlier, Vietnamese families put a huge focus on education and are willing to invest a vast part of their income in their children’s’ education making this a market with great investment potential. My grandmother used to say ‘anything can happen, but it usually doesn’t’, well that’s true unless you get on and do it. Hopefully this article has given some useful information for groups interested in getting on and doing it, but feel free to contact me if you have any questions.
Ross Macleod is a Scottish lawyer working as a Foreign Legal Consultant with Aliat Legal in Ho Chi Minh City, Vietnam. Aliat Legal provide specialist advice and consultancy to local and international clients in intellectual property, corporate & investment, and healthcare regulatory affairs.
If you would like to contact Ross please feel free to send an email to firstname.lastname@example.org
Articles written: Vietnam: Emerging Market with Growing Upportunities for Foreign Investment