Company: VSA
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001410578-25-001300
Chunk: 50

Company: VisionSys AI Inc
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 50
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 determine that we can no longer own and operate certain of our learning centers through our subsidiaries in mainland China, we may need to restructure the ownership and operation of these learning centers (including possibly transferring these learning centers to the variable interest entities), our business may be disrupted and we may be exposed to increased risks associated with the contractual arrangements relating to the variable interest entities.
There are still uncertainties under the current laws of mainland China as to whether a wholly foreign-owned enterprise is allowed to indirectly invest in and own private schools through its subsidiaries in mainland China. On the one hand, the Private Education Law does not expressly prohibit a subsidiary of a foreign-invested enterprise from investing in private schools. The Amendment to the Private Education Law Implementation Rules provides that foreign-invested enterprises established in mainland China and social organizations controlled by any foreign entity are prohibited from establishing or participating in establishing private schools to provide compulsory education; and the establishment of any other type of private school is subject to the provisions of the State on foreign investment. Moreover, the Alleviating Burden Opinions specifies that foreign capital is prohibited from controlling or investing in any academic after-school tutoring institutions through mergers and acquisitions, entrusted operation, joining franchise or variable interest entity, but has not expressly imposed restriction on non-academic after-school tutoring institutions. On the other hand, according to the Private Education Law, Chinese-foreign cooperation in operating schools is specifically governed by the Regulations on Operating Chinese-foreign Schools and its implementing rules, which require specific approvals from those governmental authorities in charge of either human resources and social security or education, and that any foreign party to such Chinese-foreign cooperation in operating schools be an educational institution with relevant experience in providing educational services outside mainland China. In addition, the Regulations on Operating Chinese-foreign Schools prohibits foreign institutions or individuals from independently establishing schools which provide educational services mainly for Chinese citizens in mainland China. It remains uncertain as to how and to what extent the Alleviating Burden Opinions may affect the regulation and administration on non-academic after-school tutoring institutions. In addition, there are substantial uncertainties regarding the interpretation and application of current and future laws and regulations of mainland China. In practice, different local authorities have different views and administrative policies on whether foreign institutions or individuals are permitted to use their direct or indirect wholly owned subsidiaries incorporated in mainland China to establish a school under the Private Education Law without violating the Regulations on Operating Chinese-foreign Schools. For example, Beijing published the Setting Standards of Science and Technology After-school Tutoring (Trial) (Draft for comment) on December