What Is Happening To International Schools: A Market Report

Executive Summary

The international school sector is expanding and contracting at the same time, and the two movements are usually reported as though they were one story. Globally the numbers remain strong, at roughly 15,075 schools teaching 7.7 million students and generating around US$69.3 billion a year, growing at about 2 percent. Beneath that, several established Asian markets are consolidating while the Gulf, Africa and Central Asia expand rapidly.

What separates the two groups is not quality, brand strength or management competence. It is regulation. In most markets the decisive variable is whether the law permits a school to enrol local children, and on what terms, because demand across the sector has shifted decisively from expatriate families to domestic ones. Markets that liberalised local enrolment grew fastest. Markets that restricted it are now consolidating. That rule differs in every jurisdiction and changes with little warning, which makes it the first thing any operator should read and the last thing most business plans mention.

The same shift is visible in what schools call themselves. In China the word "international" was removed from school names by directive. In Indonesia the term was retired in favour of a domestic classification. In Vietnam, at least one British-branded school has moved its founding brand from the front of its name to behind it, presenting the change as strategic localisation. When the customer becomes local, the label follows.

Contraction in this sector rarely looks like closure. It looks like two campuses becoming one college, senior year groups merging onto a single site, and redundancies that never reach the press. Around 40 percent of international schools are now group-affiliated, and consolidation is accelerating.

Where schools cut, they cut teachers, administration, and marketing and admissions. The admissions cut is the most damaging and the least visible, because the enrolment pipeline lags by twelve to eighteen months, which means the saving and the shortfall appear in different budget years and are rarely connected.

Governments regulate this sector heavily and support it rarely, despite their own foreign investment and talent strategies depending on it. A school cannot change the law. It can control its own operation, and in a contracting market that is where the remaining margin sits.

1. What is actually happening, and where

In Bangkok, VERSO International School has announced on its own website that it will permanently conclude operations on 31 July 2026. The school opened in 2020.

In Ho Chi Minh City, the People's Committee formally dissolved the American International School across its primary, middle and high school levels on 12 January 2026.

In Hong Kong SAR, as reported by the South China Morning Post, eight international school operators including the English Schools Foundation failed to meet their non-local admission targets, with the proportion of non-local students at some schools falling to 39 percent against targets ranging from 50 to 98 percent. Separately, a record fifteen public primary schools in the territory face closure as a record-low birth rate works through the system.

In Shanghai, Dulwich College stopped being two schools. Its Pudong and Puxi campuses became a single college across two sites under one Head of College from August 2026. Both campuses stay open and fees are unchanged. Puxi keeps Toddler through Year 9, Years 10 and 12 moved to Pudong this August, and Year 11 follows in August 2027 once the current cohort finishes its IGCSE courses.

In the United Kingdom, roughly 100 private schools have announced closure since VAT was applied to fees in January 2025. Commentators differ on how much of that is attributable to the tax change and how much to pressures that predated it.

And in the adjacent adult language sector, two substantial businesses failed within five days this September.

The same pressure is visible inside the strongest operators in the sector. Nord Anglia Education runs sixteen schools in China, seven bilingual schools open to Chinese nationals and nine foreign-passport schools. Between 2024 and 2025, three of its campuses closed or changed. One closed after five years of operation, with students transferred to another campus in the group. Another was converted into a domestic senior high school, with the international curriculum and the group branding both discontinued.

These are capable, well-resourced organisations making rational decisions in difficult conditions. The point is not that anyone mismanaged anything. It is that when operators of that quality restructure, and when a group with sixteen schools in one country changes three of them inside two years, the conditions deserve examination.

Those events also share no single cause. Bangkok and Hong Kong SAR are demographic. Shanghai and the Nord Anglia changes are structural. The United Kingdom is fiscal. Ho Chi Minh City is something else again, and it is worth setting out properly, because it is the failure mode operators discuss least.

The case that was neither policy nor demographics

The American International School Vietnam was not brought down by regulation or by a shrinking market. It was brought down by how it was funded.

The school operated an arrangement in which parents lent it money, structured as civil contracts between family and school rather than as prepaid fees. Through the 2023/24 year the school fell behind on salaries. Teachers resigned in numbers over unpaid wages, and students were reported to have been left without instructors. The school ended the academic year early in April 2024, although IB Diploma candidates were permitted to sit their examinations.

At one stage the shortfall for day-to-day operations stood at around VND 96.5 billion, roughly US$3.87 million, with the school soliciting contributions from families. More than 1,400 students were affected. The Department of Education and Training suspended operations from 1 July 2024, and the People's Committee issued the dissolution decision on 12 January 2026.

That is a governance and capital structure failure. It could have happened in a growing market as easily as a shrinking one.

Implication. Five different causes produced the same direction of travel in five markets within eighteen months. Any risk assessment built around a single threat, whether demographic or regulatory, will miss most of them.

2. The global picture

ISC Research counts 15,075 international schools, 7.7 million students, 730,000 staff, and around US$69.3 billion in annual fee income, up roughly 2 percent year on year. Across five years, school numbers rose 8 percent and enrolment 13 percent. About 40 percent of schools are now group-affiliated.

The structural change beneath those totals matters more than the totals. Demand is now local rather than expatriate. More than a third of international schools offer bilingual provision, and around three quarters blend local curriculum requirements with international outcomes.

Implication. If the customer is now a local family, the law governing whether local families may enrol is not a compliance footnote. It is the business model.

3. The rule that sets every market's ceiling

China's framework dates from the Implementation Regulations of the Private Education Promotion Law, in force 1 September 2021.

Eight frameworks, eight different answers, and not one of them turns on whether families want the education.

Implication. Market entry analysis that begins with population and household wealth starts in the wrong place. It should begin with the enrolment statute, because that sets the ceiling before any commercial assumption is made.

4. The word "international" is losing its value

A quieter shift is running alongside the regulatory one, and it tells you where the sector is heading.

In China it was required. A directive in May 2021 required private schools to remove words including "China" and "international", along with references to foreign places and institutions, from their names. As documented by ISC Research, King's College School Chengdu became Dipont KCS Chengdu, and the International Department of Guokai School became Guokai Bilingual School.

In Indonesia the category itself was retired. The label "international school" was replaced by Satuan Pendidikan Kerja Sama, a domestic classification describing a partnership between an Indonesian institution and an accredited foreign one.

In Vietnam a school chose it. North London Collegiate School opened in Ho Chi Minh City in 2022, the fourth school in the NLCS family after Jeju, Dubai and Singapore. It now trades as Viet Nam Tinh Hoa, which the school positions as rooted in Vietnam while drawing on NLCS, and describes as an evolution beyond the British school model rather than a British school in Vietnam. The founding brand moved from the front of the name to behind it.

Three markets, three routes, one destination.

This is entirely consistent with demand going local. A foreign name signals belonging to a family that is passing through. It signals something different, and not always better, to a domestic family who will live in that country for the rest of their lives and want their child to belong there as well as compete globally.

Implication. Brand equity in this sector is shifting from the foreign name above the door toward demonstrated outcomes and local standing. Operators whose commercial case rests primarily on an imported name should assume that case weakens over the next decade.

5. Where the rule loosened, and what followed

Malaysia abolished its 40 percent cap on local enrolment in 2012, six years after introducing it. Within a year Malaysian students were the largest group in international schools, with designated subjects including the national language taught to Malaysian pupils. The change was explicit industrial policy, intended to make the country a regional education hub.

Vietnam followed with Decree 86 of 2018, raising the ceiling on Vietnamese students in foreign-invested schools from 10 percent at primary and 20 percent at secondary to 50 percent across all stages.

Both converted a narrow expatriate market into a broad domestic one, and both triggered construction booms.

Liberalisation is not permanent immunity. Premium-fee schools in Ho Chi Minh City and Hanoi now face enrolment pressure, Thailand's long expansion is approaching a plateau with saturation forecast within three years, and in Malaysia the competitive question has shifted from opening campuses to filling and keeping them.

Implication. A liberalisation event is the strongest buy signal this sector produces, with a shelf life of roughly a decade before competition normalises returns.

6. A warning from the adjacent sector

EC English ceased trading on 14 September 2026, closing all 25 schools across seven destinations, citing in its own statement challenging financial conditions and a failure to secure additional investment. The International Language Academy of Canada filed for bankruptcy on 19 September after more than thirty years.

This is an adjacent sector, and the distinction matters.

Both were adult language providers. Canada's study permit cap explicitly exempts primary and secondary students, with around 115,000 permits expected for that cohort in 2026. Australia's National Planning Level, set at 295,000 for 2026 against 270,000 the year before, excludes primary and secondary school students and standalone English language courses.

K-12 international schooling was not the target of either measure. But the mechanism is identical and the speed is the lesson. Canada's international student population fell by roughly a third following one policy decision. Globally, English language teaching student weeks fell 23 percent in 2025.

The United Kingdom provides the domestic version. Twenty percent VAT on private school fees from 1 January 2025, alongside loss of charitable business rates relief and higher employer National Insurance. Independent school pupils fell to 582,477 in January 2025 from 593,486, with new pupil numbers down 5.3 percent, the largest recorded fall.

Britain is simultaneously this sector's largest exporter of school brands. Harrow, Rugby, Malvern, North London Collegiate, Dulwich and Wellington are all opening campuses abroad while the domestic independent sector contracts. That is capital following permission and demand.

Implication. Policy risk here is not gradual. It arrives as a single decision with a compliance date, and the sector adjusts over years rather than months.

7. Where the growth went, and why

Growth has moved to the Gulf, Africa and Central Asia. The reasons differ in each, but they share one feature: the buyer is a local family purchasing a globally portable education, not an employer relocating a foreigner.

The Gulf

The UAE grew about 7 percent with 36 further schools planned and waiting lists across multiple year groups. The underlying driver is population.

The UAE has expanded from just over 1 million residents in 1980 to approximately 11.8 million in 2026, with Dubai alone above 4 million. In the first half of 2026, Dubai issued over 1 million residence permits and granted 66,078 Golden Visas. More than 167,000 dependants now hold residence through family Golden Visas.

That last figure is the one that matters. The UAE did not simply attract workers. It built the family into the residency product, and the schools followed. More than 25 new international schools have opened in Dubai in recent years under KHDA oversight, and the education market is forecast to grow by AED 18.7 billion by 2029. School seat shortages are now reported as a factor in corporate assignment budgets.

Regional instability is the counterweight. Search interest in the Middle East rose 90 percent between March and June 2025, with the UAE accounting for around two thirds of it, but roughly a third of applicants also requested contingency arrangements such as deferrals or alternate destinations.

Africa

Africa holds 12 percent of the world's international schools and records the highest growth of any region for several IB programmes. Egypt leads the continent with 183 schools, followed by Nigeria at 129 and Kenya at 64. Projections suggest English-medium international schools in Africa could more than double, from around 700 to over 1,500, serving an estimated 625,000 students.

The drivers are demographic and aspirational rather than expatriate. A young and rapidly growing population, fast urbanisation, and an expanding middle class willing to commit a large share of household income to education. Parents are buying two specific things: an education that travels, and a credible pathway to universities abroad.

The buyers are affluent locals. International schooling in Nigeria, Egypt and Kenya is no longer a service for the diplomatic community.

Operators have noticed. Enko Education runs twelve schools and plans thirty more across at least twenty countries. Wellington College International announced Wellington College International Lagos, opening September 2027, its first African school and thirteenth worldwide, joining a network across the United Kingdom, China, Thailand, Indonesia and India serving around 13,000 students. It will take up to 1,500 pupils aged 3 to 18 on a 12.5 hectare campus.

Its location is the detail worth noting. The school sits inside Alaro City, within the Lekki Free Zone. A zone built to attract foreign investment treated a British school as part of the investment offer rather than as a downstream consequence of it.

Central Asia

Kazakhstan now has more than 18 international schools offering British, IB, American and bilingual programmes, concentrated in Almaty and Astana. Growth here is policy-led. The government has actively courted international school brands as part of its long-range national strategy, alongside broader education reform and encouragement of foreign investment in private schooling. The demand driver is appetite for English-medium instruction and internationally recognised qualifications.

Implication. The three growth regions share a profile: young populations, rising local wealth, thin existing supply, and governments that treat international schooling as economic policy rather than regulatory nuisance. That combination is the closest thing this sector has to a leading indicator.

8. The question governments are not asking

International schools are regulated almost everywhere as a private education matter, and they plainly should be regulated. What they are rarely treated as is what they also functionally are, which is infrastructure for attracting foreign capital and senior talent.

You cannot relocate a senior executive with two children into a city that has no school place for them. The children decide the posting more often than the package does. Every experienced head of admissions has taken the call that begins with a family asking whether there is space and ends with a company choosing a different country.

Some governments have made the connection explicitly.

Hainan Free Trade Port permits qualified overseas institutions to operate independently without a Chinese partner, with tariff exemptions on teaching materials and equipment and favourable corporate and personal income tax treatment. Saudi Arabia has issued 199 foreign investment licences to international education companies. The UAE built dependants into the Golden Visa, and 167,000 family members followed. Alaro City designed a school into a free zone.

Japan illustrates the gap. In June 2024 the Financial Services Agency designated four Financial and Asset Management Special Zones covering Hokkaido, Tokyo, Osaka and Fukuoka, with English-language administration and tax incentives, explicitly to attract senior financial and asset-management professionals.

Those professionals have children. Fukuoka has three listed international schools. The whole of Hokkaido has four.

Two of the four zones designed to import international talent sit among the thinnest school provision in the country.

Implication. The question is not whether this sector should be regulated. It is whether any government running a talent or investment strategy has counted the school places that strategy assumes. In most cases the two policies are written in different buildings and never reconciled.

9. What contraction does inside a school

The market story becomes a human one quickly. These are people losing jobs and families losing continuity, and it is worth being plain about that.

When a school consolidates, three things get cut: teachers, administration, and marketing and admissions.

Teachers. The cost is not the salary line. The people who understood particular children leave, and what they understood leaves with them, because almost none of it was ever written down. Those who remain carry more children each, with less time per child, in precisely the year the school cannot afford for families to feel overlooked.

Administration. Cutting back office capacity moves clerical work onto teaching staff, which converts a salary saving into lost contact time. It rarely appears in any budget as such.

Marketing and admissions. This is the cut I would argue about hardest. There is a persistent belief among some heads that anyone can do admissions, that marketing is a task rather than a profession, and that both can be absorbed by existing staff. It is a misconception and it is expensive. Cutting admissions does not remove the work. It transfers it to people with neither the training nor the hours, at the exact moment enrolment matters most.

The mistake repeats for a structural reason. The damage is invisible for twelve to eighteen months, because the enrolment pipeline lags. The saving lands in this year's budget. The shortfall lands the year after next, by which time it reads as market conditions rather than as a decision somebody made.

Implication. Boards should treat admissions capacity as a leading indicator rather than an overhead, and should require a twenty-four month enrolment forecast before approving any reduction in it.

10. What a school can actually control

A school cannot change its country's enrolment statute, and no institution has ever been saved by software. What it can control is its own operation, and in a contracting market that is where the remaining margin sits.

The timetable, with fewer staff. If a school must run with ten percent fewer teachers, the timetable determines whether that is survivable or whether it burns the people who stayed. Contact time calculated against contract hours, planning time protected, loads visible before term begins rather than discovered in November.

Space, when consolidating. Room utilisation data tells a leadership team what can genuinely be closed, shared or sublet. Schools merging campuses are largely estimating this today. Deciding which year groups move to which site is exactly the decision that benefits from real occupancy numbers.

Vendor count, as a direct cost line. A school paying for six or eight separate systems can reduce that. It is one of very few savings available that costs nobody their job, which ought to make it the first place a board looks rather than the last.

Retention, where the margin moves. When intake falls, keeping a family is worth more than winning one. Early visibility of attendance and engagement, and a family channel open before anything has gone wrong, is retention work rather than communications work.

Admissions capacity with a smaller team. Automated follow-up, a pipeline visible without being assembled by hand, and a public profile the school controls rather than rents. Three people can hold what five used to hold. They cannot hold it with a spreadsheet and goodwill.

The limits, stated plainly. None of this replaces a teacher or an experienced admissions professional. It allows a smaller team to cover more ground without dropping things. It cannot manufacture demand in a market where policy has removed it.

11. Outlook

The enrolment rule will keep moving. Some markets will loosen, as Malaysia and Vietnam did, and building will follow. Others will tighten, and schools built for the previous rule will consolidate or convert.

Demographics will do the rest of the work. Falling birth rates are already closing schools in Hong Kong SAR and are forecast to cap Thailand's expansion within three years. That pressure arrives on a predictable schedule, which is the one advantage it offers.

Demand will continue shifting toward local families, and identity will follow demand. Expect more schools to look like Viet Nam Tinh Hoa and fewer to lead with a foreign name.

Growth will keep moving outward, toward the Gulf, Africa and Central Asia, where populations are young, local wealth is rising, existing supply is thin, and some governments have understood that a school is part of an investment proposition rather than a consequence of one.

For operators, the decade ahead rewards two disciplines. Reading the regulatory environment accurately, because it sets the ceiling. And running a tight, visible operation beneath it, because that is the only part nobody else decides for you.

The schools that come through will not necessarily be the largest or the best known. They will be the ones that could see their own operation clearly enough to cut the right thing.