In our earlier article, Navigating transnational education: tips and traps, we outlined the complex regulatory landscape that Australian universities face when pursuing TNE. Since then, the pace of offshore activity across the sector has only accelerated. In this article, we draw on our recent webinar, Transnational education: Your roadmap to offshore delivery, to explore the practical steps Australian universities should take when pursuing TNE.
Be clear on the rationale for going offshore and ensure the business and academic case is realistic
The pressures pushing universities offshore are converging: the need to diversify revenue, constrained domestic funding, restrictions on onshore international student numbers and a federal push for regional engagement.
Given these converging pressures, Australian universities should articulate a clear rationale for pursuing TNE, and test that rationale, including at council level, before responding to an unsolicited partner approach or progressing a business case. Australian universities should ideally develop an overarching TNE strategy through which individual opportunities can be assessed, rather than treating each opportunity as a standalone project.
An early, holistic assessment of regulatory, commercial and tax factors is essential
Many TNE projects begin as commercially driven discussions led by international business development teams, with legal, regulatory and tax advisers often engaged only after key commercial terms have been agreed. This can result in Australian education regulatory requirements being overlooked or structures being pursued that do not align with local regulatory or tax requirements.
A jurisdiction-specific approach is essential. Regulatory, commercial and tax considerations will not always align, and tax outcomes may change as a university's presence in a jurisdiction expands, including where permanent establishment risks arise. These issues must be assessed holistically from the beginning, as unwinding an agreed structure can be difficult and costly. Universities should also factor in foreign arrangements, sanctions and national security considerations where relevant, which we discuss in our article, Foreign interference and national security: what university lawyers need to know as geopolitical tensions rise.
Choose the structural and operating model deliberately
There is no one-size-fits-all model for TNE. Australian universities are pursuing a wide range of locations, partner models and operating models. Each of these choices should be made deliberately, rather than defaulting to whatever model a prospective partner proposes.
A particular risk is that Australian universities are pressured to adopt models borrowed from other jurisdictions, most notably the UK franchise or validation model. That model does not transplant readily into the Australian system. In Australia, it is always the Australian university's own award and its own students, and full regulatory accountability follows from that, regardless of which operating model is adopted.
Embed appropriate governance throughout
The threshold question for any TNE project is whether the program will lead to an Australian university award. If it does, the university remains fully accountable for the integrity of that award and must maintain appropriate oversight and control, regardless of the delivery model.
Governance expectations in this area have increased significantly. TEQSA's language has shifted from "oversight" to "accountability, responsibility and assurance", reflecting broader governance reforms, increased regulatory scrutiny and the introduction of additional threshold standards. As a result, governance should be embedded throughout the project lifecycle, with larger offshore initiatives often requiring substantial governance planning before launch.
TNE also carries elevated risk, particularly where delivery involves third-party partners. These arrangements therefore sit squarely within a university's risk framework, requiring clear responsibility for oversight at the council and committee level.
The consequences of inadequate governance can be significant. Where the integrity of an award is later called into question, universities may be required to revoke qualifications that have already been conferred, with potentially serious reputational, regulatory and, in some jurisdictions, political consequences.
Remain agile
The TNE operating environment is dynamic on both sides. Overseas regulatory settings that were previously permissive in many Asian markets have tightened and continue to evolve in line with each country's particular motivations. In Australia, TEQSA's offshore delivery authorisation regime is only around a year old and TEQSA's regulatory reach and scrutiny in this area is expected to increase.
Offshore markets that were comparatively stable two decades ago will look materially different within five years. Accordingly, business cases and business plans should be staged and reviewed rigorously and regularly against actual performance, with more frequent review where performance is falling short.
As the regulatory landscape continues to evolve on both sides, universities that bring regulatory, commercial, tax and governance considerations together from the outset will be best placed to build TNE programs that are sustainable, compliant and genuinely fit for purpose.
