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Issue 167
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August 2016
·
C
hina
B
riefing
9
• Model 3:
Franchising, focusing on pre-school
and English training, e.g. EF Education and My
Gym (early childhood development programs)
• Model 4:
M&A—such as Sequoia Capital’s
investment in Universal Education Group
Due to the limited scope of this magazine, we
mainly focus on the first two of these models in
the following paragraphs.
Set-up Procedures
Set-up of an international school for the
children of foreigners
Theoretically, all foreign organizations, enterprises,
and individuals legally established or residing in
China can apply to set up an international school
as long as it satisfies the following requirements:
• Has adequate demand
• Has teaching expertise
• Has necessary facilities, equipment, and other
teaching resources
• Has stable sources of funding
• The main setup procedures include:
1. Submit the application and other documents
to the provincial level educational
administrative departments
2. Upon review and preliminary approval of the
provincial level government, the application
shall be delivered to the state-level Ministry
of Education for final approval
3. Register with the civil affairs department
This type of school is allowed to enroll children
of foreigners legally residing in China, can choose
the curricula, textbooks, and teaching programs by
itself, and can hire foreign staff according to relevant
laws and regulations. However, it is forbidden from
enrolling Chinese nationals, opening additional
branches, or conducting any for-profit activities.
Set-up of Sino-foreign cooperative
educational institutes
For Sino-foreign cooperative education, both the
foreign and Chinese parties are required to be
educational institutions with a legal presence in
China. That is to say, no individual investors are
allowed to engage in this type of educational
institution.
Both parties may make capital contributions in the
form of cash, land use rights, intellectual property
(IP), and other types of property. However, except
for foreign institutions invited by either the state
or the provincial level government to participate
in cooperative educational undertakings in China,
the IP contribution ratio generally cannot exceed
one-third of each party’s total contribution.
Investors seeking to set up Sino-foreign cooperative
educational institutions are required to obtain
pre-approval from the corresponding level of
government depending on the specific category:
Generally, the set-up process for Sino-foreign
cooperative educational institutions includes
two stages: the preparatory stage and the official
establishment stage. Applications satisfying all
establishment requirements and standards can be
submitted for official establishment directly.
During the preparatory stage, certain documents
specifying the key information of the cooperative
programs are required by the bureau in charge,
including a certificate showing that a minimum of
15 percent capital contribution for the startup has
been made. Upon receiving the application, the
bureau in charge will approve or reject it within 45
working days. If approved, an approval certificate
for preparatory establishment will be issued, which
is valid for three years. No enrolment will be carried
out during this preparatory period.
Category
Bureau(s) in Charge
• Tertiary educational institutions for undergraduate
or higher degrees
• Ministry of Education
• Tertiary technical education
• Non-academic tertiary education
• Provincial level People’s Government
• High school
• Self-study examination assisting institution
• Extracurricular tutoring
• Early learning/pre-school education
• Provincial level education administrative
department
• Vocational training
• Provincial level human resources department