Foreign Schools in China: The Legal 101

China WFOE

Many years ago, we helped a foreign school “conglomerate” set up a number of schools in China and due to “word of mouth” we have been getting calls and emails regarding China school set-ups ever since.

Many of those communications come from ESL teachers who see a need and want to fill it, but truth be told, this is by no means an easy or inexpensive business and so only a tiny percentage of those who kick our tires ever get past that stage.

Because of all the “I want to start a school in China” tire-kickers, we now have a template email to alert them right up front to the difficulties of successfully doing so and I figure putting it up here could prove useful to at least some of our readers, so here goes.

A School for Children of Foreign Workers is the only type of school China allows to be 100% foreign controlled and owned. The path for this is sort of school is as follows:

  • Start with extremely strong local government support for the school and an established off-shore education institution.
  • Register a consulting/technology WOFE with USD$500K+ registered capital and the relevant business license.
  • Lease/purchase a facility and fit-out to meet school-level fire and safety regulations.
  • Spend 2+ years working on the provincial education bureau license application process.

Note: This sort of school can hire foreign and local teachers, and all relevant staff needed to run a school.

If you are wanting to run an “English training center” (basically for English tutoring), the path we see foreigners go down is usually the following:

  • Start with local government support for the training center.
  • Lease/purchase relevant commercial space.
  • Register a consulting WOFE with foreigner/foreign company as sole investor, and with a fairly generic business scope (local AIC’s do not like to give scopes that permit education activities).
  • Open the English training center and hope nobody cares to check your business scope carefully. We have heard of centers getting closed within weeks of their opening and we have heard of training centers remaining open for years and years.

With this method, you cannot officially hire teachers, only consultants or other positions relevant to running a consulting company. Work visas for such “consultants” are often held up due to the skepticism of local officials and a typical foreign teacher’s lack of qualifications to be an actual “consultant.”

If you are trying to use this consulting business to run an actual school it won’t last long unless you are seriously protected by local government and even then, government officials in China change and change often and the new officials generally try to wipe this sort of slate clean.

Registering a fairly generic consulting WOFE would be easy but you would be at big risk for being able to maintain it. Registering a consulting WOFE with something educational in the business scope would be very difficult (but our China lawyers have done this) and less risky once registered. Registering an actual school is a long term and expensive project, but possible if you have the funding and a will to achieve it.

Where do you fit in the above?

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