Government to ease rules on foreign investment in HE

A new government decree to ease the way for foreign investment in education in Vietnam, likely to be approved by the country’s leadership as early as June, will streamline procedures and reduce bureaucracy for setting up foreign branch campuses in the country.

The new decree will replace Decree Number 73 issued during 2012 which relates to foreign investment and collaboration in higher education. The new decree will increases the minimum investment capital to set up a foreign-backed university, from VND300 billion (US$13 million) under Decree 73 to a minimum of VND1 trillion or approximately US$45 million, excluding the land value for university construction.

“The draft decree is being revised and we have almost been through our internal procedures, so I hope we will be going to submit it to the government, to the prime minister, to issue next month or July,” Nguyen Xuan Vang, the director general for international cooperation in Vietnam’s Ministry of Education and Training, told University World News last week.

He said US$45 million was not a large amount for a university. “That is the minimum commitment they have to show but it can be done in stages.”

He added that under Decree 73 investors had to acquire land to build or secure permanent facilities before setting up an institution. “One of the new things for the new revised decree is that if you want to set up a university or a school, you can rent facilities,” Vang said, adding the facilities would have to meet proper standards and would be for an initial period of five years.

In May, during a consultation workshop organised by the Ministry of Education and Training, experts said the increase to US$45 million minimum investment to establish a university in Vietnam could be problematic for investors and could be a barrier to smaller institutions, particularly in the vocational sector.

But Vang said existing foreign universities in Vietnam had investments of US$100-200 million. For example, the Vietnamese-German University has investment capital of around US$200 million.

More open investment landscape

For the higher education sector it means universities will no longer have to set up as joint projects with Vietnamese universities, he said. “Under the decree we are talking about 100% private universities, for example, Tokyo Medical University is 100% their own,” he said referring to the non-profit Tokyo Vietnam Medical University set up in the northern province of Hung Yen providing mainly nursing and physiotherapy degrees.

Vang said the new decree, a draft of which was first released in February, will streamline the process for foreign investors. “It will be more open, more attractive, less administrative procedures for investors to invest in Vietnam. They can invest in a school, they can invest in a university, they can partner with a Vietnamese investor.”

The new decree, will also cover private international schools, which will help feed into the expansion of the English-taught higher education sector. The draft decree lifts the cap on the number of Vietnamese students allowed into such foreign-backed schools. Currently Vietnamese enrolment at foreign primary schools is capped at 10% of the total student body, and 20% at secondary and higher secondary levels.

Foreign universities will help bridge the skills gap of graduates from Vietnam’s universities and those required by employers, particularly as Vietnam integrates with the ASEAN Economic Community’s single market which groups around a dozen Southeast Asian Nations.

The Vietnam National Productivity Institute said that the lack of English language and soft skills were recognised as the main cause of low productivity of the country’s graduates compared to other ASEAN – Association of Southeast Asian Nations – countries.

“The general policy is that if we have more [universities], then there is more competition. Competition is good, they [will] improve quality," Vang said.

Faculty qualifications

The current draft of the decree requires foreign professors – who will make up at least 50% of the faculty of the foreign-invested institution, compared to 35% under current rules – to possess degrees from accredited foreign universities recognised by quality assurance agencies in their countries.

Under Decree 73 language teachers in particular had to have a minimum of a masters degree and five years of teaching experience.

“International degrees of Vietnamese teachers must meet the requirements of recognition in Vietnam,” Vang added.

Lecturers will be required to have at least a masters degree, while at least 50% of lecturers will have to have a doctorate, compared with 35% under Decree 73.

Other specific requirements for vocational degrees, hotel management or arts degrees will also be included to allow those with relevant experience in these sectors to teach at the new institutions. The draft decree also includes rules for suspending or ending foreign-invested programmes.

Investors will have to return tuition fees to students if they cannot or do not want to transfer to other institutions. This is in response to the experience of many students left up in the air after a Vietnamese government crackdown during 2012 on foreign-linked institutions it said were offering unlicensed courses, mainly in the vocational sector.

Existing projects

The new decree will, however, not apply to foreign-funded projects already under way such as Fulbright University Vietnam or FUV, an independent non-profit university funded by the United States and Vietnamese governments.

“Fulbright has been set up and they have submitted their application for the operating licence,” Vang said. “When they will be granted the operating licence, then they can recruit students, they can set up the university, but in order to operate they have to be able to show that they have faculty, they have staff, they have everything ready for quality assurance.”

Vang thought FUV’s operating licence could be granted by the end of this year, at the very earliest in September this year.

The project had been embroiled in a controversy over the appointment last year of Bob Kerrey, former Nebraska governor, US senator, and alleged war criminal as chairman of the Fulbright University Vietnam board of trustees. He is said to have quietly resigned from his high-profile position in recent weeks.

Mark Ashwill, managing director of Capstone Vietnam, a Hanoi-based educational consulting company, said: “If Bob Kerrey had stayed on, FUV would have remained a project and the red light would not have changed. By leaving, the red light quickly changed to green.”