Job Discussion Forums

[wayne1523]

Hi everyone.

I'd like to ask what are the legal procedures of aspiring to open one's own class or school as a foreigner in Vietnam. In my case, I am Canadian and want to try this in Ho Chi Minh City. My idea is actually to rent out or buy some free space in a building. Nothing too major yet. Just one or two rooms with decent size and space and renovate them. Max 10 to 12 people per class. Do I need permanent residency? Do I need a local to register for the business? Hopefully I don't need to be married to anyone to try this.

http://hcmc.angloinfo.com/information/working/starting-a-business/

This link suggests that it is possible opening a sole proprietorship as a foreigner. I would assume that this would include trying to open a class in a building, would it not?

"Opening a foreign-owned business in Vietnam is possible and even encouraged by the Vietnamese government, although the laws are complex and the process can be complicated. Modern business law is in its infancy in Vietnam. Laws and regulations may be incomplete, ambiguous and subject to conflicting interpretations by different government agencies. Having the help of an experienced and well-connected Vietnamese law firm is highly recommended.

Types of Business
There are many foreign-owned small businesses in Vietnam, as well as a growing presence of international firms and franchises.

There are three business structures available for those who want to open a business in Vietnam. The business may be:

A 100 percent foreign-owned sole proprietorship or partnership
A joint venture enterprise
A business cooperative that is owned and controlled by the people who use its services"
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Also, can anybody elaborate a little bit on each of these 4 points?

"Documents Required
People wanting to establish a new business in Vietnam are required to produce several specific legal documents. These include a valid personal identity card or passport, as well as papers proving financial solvency.

A foreign enterprise wanting to set up an office or factory in Vietnam must provide the following documents:

-A certificate of incorporation
-A company charter or articles of association
-Audited financial statements for the past 12 months
-Valid personal identity cards or passports of any of the business’ authorised representatives"
------------------------

Also, would I need to bring all that extra documentation that foreigners who are looking for work in Vietnam would bring? For example, the criminal record check, etc.?

If anybody can add on here their knowledge or other legitimate sources and links pertaining to the official information of opening up a business in Vietnam, particularly a class or school, it would be much appreciated.

Thank you all. [/img]

[ExpatLuke]

It's going to be difficult, and it's going to take A LOT of money just to get it up and started. And, of course, there's no guarantee your school will be successful and probably won't start turning a profit for a long while.

Vietnam is an Asian country where who you know is much more important than what you know. You could be an expert in your field, with brilliant ideas for making a state of the art new school that will revolutionize education in Vietnam, but if you don't know the right people and have the right connections, it will probably never get off the ground.

Furthermore, as a foreigner, everything will be twice as difficult for you. I've heard it directly from the mouths of the officials at the Labor Department, that they don't like foreigners in their country, and they will make sure to slap you with every form of red tape possible just to get in your way. Not all of them are like this, but a good number are. They're looking out for their fellow Vietnamese.

On top of all that, a lot of the established schools have friends and contacts in the Labor Departments. If they catch wind that you're opening a competing school, they'll make it more difficult for you. That's why a lot of schools have managed to corner the market on teaching children, or teaching adults, or teaching IELTS.... new schools either need to offer dirt cheap classes, which means dirt cheap wages for teacher, which means only low quality teachers accept... or they have to open to a new niche market (such as only Aussie accents).

I've known a few people who have tried to open their own schools. It seems to have about a 50% success rate among the handful of people I know. And the ones that have been successful have done it in smaller towns, which are away from the big chain school's competition.

I wish you luck, but I think without a Vietnamese partner or spouse you can trust to be the main name of the school, it will be very difficult.

[spycatcher reincarnated]

I pretty much agree with Luke. Doing it the way you suggest will be costly, time consuming and may not get you what you want. If you do get what you want then you will very quickly have to learn the rules or various departments will destroy your nascent business. The fact that you are foreign owned will almost certainly cause you a lot of issues.

Going along this route you will need to become a full time administrator, if you hope to comply with most of the rules.

Unless you are prepared to spend/invest at least 50,000 usd, I do not advise the above route.

[Okie from Muskogee]

[spycatcher reincarnated]

There would be no English school in Vietnam with a legal capital of 5,000,000 usd and I doubt the largest foreign owned chain would have a legal capital of over 3,000,000 usd.

For one small centre I do not see why the legal capital would need to be over 30,000 usd, but the issue would be whether the government would issue a license for such a small investment. I guess that they would.

[Okie from Muskogee]

With $30k, a foreigner could probably run a small bia hoi in hcm city or hanoi.

[likwid_777]

For any Asian country, if you don't have years of knowledge about the place, and a grasp of the language, I probably wouldn't try it. Even with both of these things, you'll still have a very poor grasp of the overall culture. Asia is scam central, and the runners of rival schools could run subversive campaigns against your business without your even knowing. In China, my ex-girlfriend (receptionist) for School X was asked to enrol as a student for other schools, to spy on them. Your rivals could even just spread rumours in the local language about the quality of your school, or your past.

You will be the target of all of the Vietnamese run schools before they target each other again (I guess). Then there are the layers of government, shudder. Also, if you have to marry in order to do it, I'd be wary. Marriage would be catch 22; it would probably make it infinitely easier to set your school up. Later, it would make it easier to have this, newly successful business, pulled out from under you by your fluttery eyed wife. But yeah, would take bulls to do, and a lot of skill and luck (and connections as others mentioned) to pull it off.

PS- Obviously I have no idea what I'm talking about, it's just a scary idea in general, I reckon.

[Okie from Muskogee]

ESLers are not business lawyers. Your best bet is to seek advice from a law firm that specializes in business. If your capital is x0,000 usd, it's probably best to keep it in your pocket. However, if your capital is x00,000 usd or more, you might have a shot at it.

It is my understanding from the past that vietnam does not allow 100% foreign owned "education" service business. You got to have a vietnamese partner who is well qualified in education (ph.d or well connected) to get license or something. Anyway, good luck.

[spycatcher reincarnated]

Loads of foreign companies have started 100% foreign owned education companies in Vietnam.

As I recall there are certain minimum requirements for the size of a school (maybe 5 classrooms, etc.). Therefore I think it would be difficult to do with under 100,000 usd.

[wayne1523]

Thank you everybody for your feedback. Very informative.

[FreshlyBrewedCoffee]

Vietnam is not a rule-of-law country. Opening a business here is easy--you just do it. Yours would certainly not be the first foreign-owned school operating without a license. Rent a house for a few hundred bucks or so a month, turn one of the rooms into a classroom--you're in business. Again, you wouldn't be the first. Might you end up having to pay a bribe or two to a local cop? Again, there's no rule of law here. You pay the bribe, you're good to go. Otherwise, you fly under the radar. Or you try to go legal in a country with no notion of legality, and make things impossibly difficult for yourself.

The only meaningful question is this: Can you get students? If yes, you're in business. Approximate start-up capital: between 200 and 800 or so USD, ie, rent on a house/school. Maybe another few bucks for textbooks and a whiteboard. Oh, you'll need markers--that's about another 2 or 3 dollars right there. Estimates in the thousands of dollars are laughable--too many clowns with time on their hands posting here. Absolute minimum cost to open a school: 5 dollars. That gets you a room for a day in a cheap hotel. It doubles up as a classroom. Bang, you're in business. And I dare anyone to refute it.

[ExpatLuke]

Freelancing some classes is not the same as opening your own school.

[Okie from Muskogee]

FBCs plan sounds like a winner! Why didnt i think of that..