School Guide

For profit vs not for profit international schools in Malaysia

Published by SchoolAdvisor | Apr 04, 2017

The demand for an English-medium international school education has been growing steadily in the last 20 years to the point that the sector brought in an estimated US$34.4 billion in 2013, up from US$20 billion in 2009, while educating close to 4.45 million students in virtually every country in the world.

These are among the findings of the International School Consultancy (ISC) Group, presented in March by ISC South East Asia Consultant Sami Yosef at the International Private Schools Education Forum (IPSEF). Yosef points out in his presentation that international schools are “no longer a small market catering to a niche group,” rather “the international schools market is now big business and is recognised as such by a broad range of investors, suppliers and providers.”

Read more here: The Changing Landscape of International Education in South-east Asia

While the market is hugely diverse and the characteristics of what exactly constitutes an international school is a matter of some debate, it is generally agreed upon that they can be divided into two categories; For profit and Not for profit.

Sharing his 32 years of experience in the field of education in Southeast Asia, John Gywn Jones presented at the international private schools conference of these two categories of international schools.

John Gywn Jones, Managing Director, Panyathip International School

Not For Profit International Schools

Here are five Not for profit international schools in Malaysia. Not for profit schools typically do not have any investors, share-holders or owners.

International School of Kuala Lumpur (ISKL), Kuala Lumpur, Malaysia

Alice Smith School, Kuala Lumpur, Malaysia

St Christopher’s International Primary School, Penang, Malaysia

Kinabalu International School, Kota Kinabalu, Sabah, East Malaysia

Uplands International School, Penang, Malaysia

 

It is this non-profit status which exempts the entity from federal, state and local taxes. It also permits the school to accept contributions which are in turn tax-deductible to the extent provided by law. Not for profit status was designed for entities which operate for the greater good of the community.

Most not for profit schools will have an parental board of governors. The trustees are the mechanism by which the school governed. Depending on how the charter is set up, its powers will be quite extensive. A headmaster at such a school is hired by the board of trustees. This governance mechanism allows the school to outlive its founder, and, all things being equal, last for generations.

For Profit Schools

Most international schools are "For Profit" based. The way in which a for profit school is set up is to allow it to be controlled by an owner. That owner could be an individual or group of individuals. This often is a corporation owned an operated by a group of local individuals. More typically, for profit private schools are owned by a corporation which has schools in several locations. For profit schools are usually in business to make money or turn a profit. They pay taxes on those profits. Parents pay for the school's services just as though they were customers.

The advantage to for profit ownership of a school is that the owner truly calls the shots and controls everything. If the parents do not like what is being offered, they can take their children elsewhere. Parental input may be sought and even entertained, but the final decisions and control rest with the owner.

Does it matter whether a school is for profit or not for profit?