Nguyen Danh Cong – Partner
Nguyen Thi Thuy Tien – Associate
Le Huu Tien – Junior Associate
Against the backdrop of increasing attention to improving the legal framework governing investment conditions and the operation of preschool education institutions, while also aiming to simplify the relevant administrative procedures, the Government issued Decree No. 360/2026/ND-CP dated 17 September 2026 (“Decree 360”), which took effect from the date of issuance and replaced the corresponding provisions of Decree No. 125/2024/ND-CP on investment conditions and operations in the education sector (“Decree 125/2024”). Notable changes include the following:
1. Conditions and procedures for obtaining a Decision permitting the establishment of a preschool
a. Conditions for establishment of a preschool
Decree 360 has removed the requirement for an Establishment Proposal, reducing the requirements to two conditions: (i) compliance with the local strategy, planning, and socio-economic development requirements; and (ii) having a proposed location for construction of the preschool that satisfies the applicable standards on location, scale, and area.
b. Application dossier
- A written request for establishment/permission to establish the preschool (the contents previously required under the Establishment Proposal are now incorporated into this document); and
- Legal document(s) evidencing the right to use land, ownership of the premises, or a lease agreement for the location/facilities with a minimum term of 05 years.
2. Conditions and procedures for obtaining a Decision permitting educational operations of a preschool
a. Conditions for permission to conduct educational operations
Decree 360 generally retains the previous regulations, while removing the requirement relating to the education program (i.e. application of the program issued by the Ministry of Education and Training) and the requirement for the school’s Regulations on Organization and Operation. Accordingly, a preschool may be permitted to conduct educational operations if it satisfies the conditions relating to:
- Facilities and learning materials;
- Management staff, teachers, and other personnel; and
- Financial resources.
Private preschools must make a minimum investment of VND 30 million per child (excluding land costs). Where premises are leased or existing facilities are used, the minimum investment must be 70% of the above amount.
b. Application dossier:
- A written request for permission to conduct educational operations, explaining how the applicable operating conditions are satisfied and accompanied by supporting evidence (if any);
- Documents evidencing financial resources.
Decree 360 specifies the types of documents that may be accepted as evidence of financial capacity, instead of merely providing a general requirement for documents evidencing the investment amount as under Decree 125/2024. Specifically, such documents include: a credit agreement or credit commitment; a written confirmation of account blocking; fund transfer documents; documents evidencing resources that have been allocated or invested; vouchers, contracts, and acceptance records evidencing the value of capital already invested; or documents evidencing ownership of assets contributed as capital, together with valuation documents in accordance with enterprise law.
This provision clarifies the basis for demonstrating financial capacity from the dossier preparation stage, while also allowing investors to select documents appropriate to their funding sources and the actual investment implementation schedule.
3. Other changes
a. Competent authority
In line with the two-tier local government model, Decree 360 provides greater clarity on the competent authorities: the Chairperson of the commune-level People’s Committee has the authority to decide on the establishment/permission for establishment of preschools and independent preschool groups/classes, while the commune-level Culture and Social Affairs Division acts as the specialized advisory body.
b. Enhanced post-licensing supervision
The approach to assessing the conditions applicable to preschool education institutions has been adjusted towards reducing pre-licensing inspections and strengthening post-licensing supervision. Instead of requiring mandatory on-site assessments for certain procedures under the previous regulations, the new regulations prioritize assessments based on available dossiers, information, and data. The competent authority will only conduct an on-site assessment where such sources are insufficient to assess and verify compliance with the relevant sector-specific conditions.
This approach helps reduce pre-licensing inspection steps while increasing investors’ responsibility for ensuring the accuracy of their application dossiers and maintaining full compliance with the applicable conditions throughout their operations.
c. Shortened processing time for procedures for permission to conduct educational operations
Compared with the previous regulations, Decree 360 has significantly shortened the processing time for procedures applicable to preschool education institutions:
- Establishment of a preschool: reduced from 25 working days to 12 working days;
- Permission to conduct educational operations of a preschool: reduced from 20 working days to 12 working days; and
- Establishment of an independent preschool group/class: reduced from 20 working days to 08 working days.
The shortened processing time reflects the policy direction towards simplifying administrative procedures and reducing compliance costs for investors in the process of establishing and commencing operations of preschool education institutions.
4. Transitional provisions
- Education institutions that were permitted to be established/operate before 17 September 2026 are not required to carry out the relevant procedures again.
- A private education institution with two (02) or more investors that was established before 1 January 2026 must complete the procedures for establishing an economic organization before 1 January 2027.
The newly established economic organization will become the investor of the education institution and succeed to all rights and obligations of the previous investors. Such transition must not disrupt the institution’s operations or adversely affect the rights and interests of relevant parties.
- A school established before 17 September 2026 whose name may cause confusion as to its legal status, scope of operations, or State sponsorship (including words of an “international”, “national”, “Vietnam”, or other country-related nature, etc.) must change its name within 12 months from the effective date of the Decree, and no later than 17 September 2027.
5. Recommendations
Overall, Decree 360 introduces a more streamlined and expedited investment process, while also requiring investors to take a more proactive role in demonstrating and maintaining the conditions applicable to the operation of preschool education institutions. Accordingly:
a. For preschools currently in operation
- Proactively review the investment structure and implementation progress. If a preschool was established before 1 January 2026 and has two or more investors, the investors should promptly complete the procedures for establishing an economic organization before 1 January 2027 and carry out the resulting transfer arrangements;
- Review whether the school’s current name may be considered misleading as to its legal status (for example, where it contains words of a “national”, “international”, “Vietnam”, or other country-related nature). If so, the school must complete the procedures for changing its name before 17 September 2027;
- Standardize documents evidencing financial resources and cross-check the declared information against the actual status of facilities and personnel; and
- Establish and maintain internal records relating to facilities, personnel, and financial resources so that they are readily available for post-licensing supervision at any time.
b. For enterprises intending to establish or make a new investment in a preschool:
- Proactively review and study the planning and socio-economic development requirements of the locality where the preschool is intended to be established, in order to ensure compliance with the establishment conditions from the location-selection stage;
- Prepare the legal documents relating to the proposed location at an early stage, ensuring valid land use rights, ownership of the premises, or a lease agreement with a minimum term of 05 years; and
- Prepare appropriate financial resources and ensure that receipts and expenditures incurred during the establishment process are transparent and clearly documented so that they may be used as suitable evidence of financial capacity.
Proper preparation from the outset not only helps shorten the licensing process but also significantly reduces compliance risks throughout the operation of the preschool education institution.
