Step-by-Step Guide to Establishing an EdTech Company in Vietnam

Vietnam has emerged as a thriving market for the education technology (EdTech) industry due to its growing tech-savvy population, high demand for quality education, and supportive government policies. For foreign SMEs and solopreneurs looking to enter this market, establishing an EdTech company in Vietnam offers substantial growth opportunities. This guide provides a detailed roadmap, including key considerations, legal procedures, and an estimated initial setup cost.

1. Conduct Market Research

What is it?

Market research helps you understand local market demand, competitors, customer needs, and education trends. For EdTech, it includes analyzing the demand for digital education platforms, e-learning tools, mobile learning, and AI-powered tutoring solutions.

Conducting thorough market research is crucial to strengthen your future success. Focus on:

• Analyzing the Vietnamese education market, particularly in the EdTech sector
• Identifying your target audience (e.g., K-12 students, university students, adult learners)
• Studying competitors and their offerings
• Understanding local educational needs and gaps your EdTech solution can fill

Why is it important?

Conducting market research helps you avoid entering a saturated market, stay compliant to local regulation and allows you to tailor your product or service to local demand. It's essential for creating an effective business strategy.

Local Tools & Resources:

• Edtech Agency Vietnam: Offers updates on local industry trends.
• General Statistics Office (GSO): Provides demographic data to understand your target audience.
• Ministry of Education and Training: Publishes key reports on the education sector.

Timeline & cost:

• Estimated time: 2-4 weeks 
• Estimated cost: 
  • Option 1: $500 - $2,000 (general report, online resources, surveys, and potentially local consultant insights)
  • Option 2: $2000 - $5,000 (tailored research to your specific company)

2. Prepare a Business Plan & Investment Capital

What is it?

A business plan includes your business model, your revenue stream, target market analysis, marketing & sales strategies, operational processes, and financial projections. It also defines your initial investment needs, which typically cover licensing, staffing, and basic infrastructure.

Why is it important?

A strong business plan helps you chart the course for your company's future. It's also useful for securing investors or financial support.

Determine your initial investment capital based on your financial projections, it could range from $10,000 to $50,000 depending on the scale of operations. As a solopreneur, consider:

• Personal savings
• Friends and family investments
• Small business loans
• Crowdfunding

DIY Suggestion: Tools like Bplans or LivePlan can help you create your plan before consulting local advisors.

Timeline & cost:

• Estimated time: 2-3 weeks 
• Estimated cost: $0 - $1,000 (potential costs for financial planning software or consultant) or from $3,000 hiring a freelance service.

3. Legal Setup: Register Your Business

What is it?

Foreign businesses must obtain an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC). These documents authorize your business operations in Vietnam and must be obtained before your company can be legally operational.

Why is it important?

The IRC and ERC are required to establish a legal presence, open bank accounts, and hire staff in Vietnam. Failure to secure these licenses could result in fines or other penalties.

Outsource Option: You can outsource to a local legal firm for more efficient processing. Local firms, familiar with best practices, can guide you through the process while saving you from language barriers and time-consuming tasks.

Local Tools & Resources:

• Ministry of Planning and Investment (MPI): Handles company registration for foreign investors.
• Vietnam Business Registration Portal: Uncover business registration conditions for foreign investors.

Timeline & cost:

• Estimated time: 4-6 weeks 
• Estimated cost: $1,500 - $2,500 (Business license), $50 - $100 (Company Seal), $300 - $700 (visa/work permit)

4. Register a Business Address

What is it?

Every business in Vietnam must have a registered office address. For EdTech businesses, a virtual office is allowed, which means you don't need a physical location unless required.

Why is it important?

A registered address is necessary to complete your legal registration and communicate with authorities. Virtual offices offer flexibility, lower costs, and can help solopreneurs establish their company with minimal overhead.

Local Tools & Resources:

Toong, CirCO, Replus, The Hive, TEC: These coworking and virtual office providers offer affordable solutions in key cities like Ho Chi Minh City and Hanoi.

Timeline & cost:

• Estimated time: 1-2 weeks 
• Estimated cost: $50 - $150/month (virtual office)

5. Open a Local Bank Account

What is it?

In Vietnam, every business needs a local bank account to handle financial transactions and interact with clients and vendors.

Why is it important?

A local bank account is crucial for managing your business finances, receiving payments from local clients, and paying local expenses. It also helps in complying with local tax regulations and financial reporting requirements.

Local Tools & Resources: Popular banks for foreign investors include:

• Local banks: Vietcombank, Techcombank, Sacombank, BIDV, ACB
• International banks: HSBC Vietnam, Citibank

Timeline & cost:

• Estimated time: 1-2 weeks 
• Estimated cost:
  • Account opening: Free - $100 (One-time fee, varies by bank)
  • Maintenance: $0 - $20 per month (Varies based on account type and bank)

6. Get an eToken Signature (Optional)

What is it?

An eToken signature is an electronic signature used to sign contracts and documents digitally. This optional tool simplifies legal document processing and is ideal for businesses looking to operate online.

Why is it important?

While not mandatory, eToken signatures streamline administrative tasks and allow businesses to work more efficiently, especially when signing contracts remotely or online.

Local Tools & Resources: MISA, MAT BAO, FPT, VNPT

Timeline & cost:

• Estimated time: 2-5 days
• Estimated cost: $100 - $200

7. Select a Local Accounting Firm

What is it?

Selecting a local accounting firm helps you manage tax compliance, accounting, and financial reporting, including issuing e-invoices if required. Local firms ensure that your business stays compliant with Vietnamese tax laws.

Why is it important?

Navigating Vietnamese tax regulations can be complex for foreign investors. Outsourcing accounting services ensures your company complies with tax laws, saving you from penalties and allowing you to focus on your core business activities.

Local Tools & Resources:

• Global firms like KPMG, PwC, Grant Thornton offer comprehensive services.
• Boutique firms like AZTAX, Ke Toan Alpha, Crowe, AACS, CPA Vietnam specialize in accounting, audit and tax services for foreign SMEs.

Timeline & cost:

• Estimated time: 2-5 days
• Estimated cost: $200 - $500 per month (depend on number of services)

8. Recruit early-stage team members

What is it?

You can hire full-time, part-time, contractors, freelancers, or outsource specific tasks like customer service, content development, or technical support. Depending on your needs, you can build a flexible team that fits your business model.

• Full-time employee: Best for core, ongoing roles
• Part-time employee: Suitable for regular but not full-time needs
• Contractor/Freelancer: Ideal for specific projects or specialized skills
• Outsourcing: Consider for entire project teams or specific functions

When hiring, consider:

• Language skills (Vietnamese and English)
• Familiarity with EdTech and local education system
• Cultural fit and ability to work in an early-stage startup environment

Why is it important?

Hiring local talent gives you insights into the local market, helps manage daily operations, and improves your company’s ability to deliver quality services tailored to local customer needs.

Local Tools & Resources:

• Job Portals: LinkedIn, VietnamWorks, CareerViet, TopCV for posting jobs.
• Recruitment Agencies: Talentnet, Navigos, PersolKelly, Adecco for professional staffing services.
• Freelancer Portals: Vlance.vn, FreelancerViet.vn, Fiverr.com, Freelancer.com for hiring freelancers for specific projects.

Timeline & cost:

• Estimated time: 3-6 weeks
• Estimated cost:
  • Job Posting on Portals: LinkedIn: $250 - $500 per post, VietnamWorks: $150 - $300 per post, CareerViet: $50 - $150 per post, TopCV: $50 - $100 per post, Social media - no cost: Threads, Facebook community
  • Recruitment Agency Fees: Typically 10-20% of the employee’s first annual salary or charge per role, range from $300 - $3,000 (One-time, depending on the role and salary)
  • Freelancer Platforms: Fees vary by platform but typically range from $50 to $1,000 depending on the project and scope.
  • Base salary: $400 - $1,500/month a part-time assistant or mid-level full-time employee.

The Estimated Operating Costs for First 6 Months:

• Minimum: $8,000
• Maximum: $21,800

These estimates do not include the initial investment capital of $10,000 to $50,000 required for business registration.

Key Considerations for Solopreneurs & SME

• Start lean: Begin with a minimal viable product (MVP) to test the market before significant investment.
• Leverage technology: Use cloud-based tools and platforms to reduce initial infrastructure costs.
• Network actively: Join local EdTech and startup communities for support and potential partnerships.
• Understand local culture: Invest time in understanding Vietnamese business culture and education system.
• Be flexible: Be prepared to pivot your business model based on market feedback and regulatory changes.

Remember, this guide serves as a reference point, each entrepreneurial journey is unique. Stay adaptable and be prepared to adjust your approach as you navigate the Vietnamese EdTech market.

Conclusion

Establishing an EdTech company in Vietnam as a solopreneur is highly achievable with the right approach. By outsourcing key functions, utilizing local resources, and focusing on a streamlined setup process, you can minimize costs while maximizing operational efficiency.

At SOSP Consulting Group, we provide full support in setting up your business, from market research and legal registration to staff hiring and operational setup. Let us help you launch your EdTech company in Vietnam smoothly and successfully. With SOSP Consulting Group, you'll receive a ready-established company, allowing you to hit the ground running in the Vietnamese market.

Want to know more? Contact us today to discuss how we can support your EdTech venture in Vietnam.