Exhibit 99.2

 

通商律师事务所

 

Commerce & Finance Law Offices

 

6F NCI Tower, A12 Jianguomenwai Avenue,

Chaoyang District, Beijing, PRC; Postcode: 100022

Tel:(8610) 65693399 Fax: (8610) 65693838, 65693836, 65693837

Website: www.tongshang.com

 

August 30, 2017

 

RYB Education, Inc.

4/F, No. 29 Building, Fangguuan Section 1, Fangzhuang

Fengtai District, Beijing 100078

People’s Republic of China

 

Dear Sirs:

 

We are qualified lawyers of the People’s Republic of China (the “PRC” which, for the purposes of this opinion, excludes the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan) and are qualified to issue an opinion on the laws and regulations of the PRC.

 

We have acted as the PRC counsel to RYB Education, Inc. (the “Company”), a company incorporated under the laws of the Cayman Islands, in connection with (i) the initial public offering (the “Offering”) by the Company of American Depositary Shares (“ADSs”), representing Class A ordinary shares, par value US$0.001 per share, of the Company, (ii) the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the “Registration Statement”), originally filed with the Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended, on August 30, 2017, and (iii) the Company’s proposed listing of the ADSs on the New York Stock Exchange.

 

In so acting, we have examined the originals, or copies certified or otherwise identified to our satisfaction, of documents provided to us by the Company and such other documents, corporate records, certificates issued by governmental authorities in the PRC and officers of the Company and other instruments as we have deemed necessary or advisable for the purposes of rendering this opinion.

 

In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with authentic original documents with respect to the documents submitted to us as copies. We have also assumed that the documents as they were presented to us up to the date of this legal opinion have not been revoked, amended, varied or supplemented. We have further assumed the accuracy and completeness of all factual statements in the documents. Where important facts were not independently established to us, we have

 

 

relied upon certificates issued by governmental agents and representatives of the Company with proper authority and upon representations, made in or pursuant to the documents.

 

The following terms as used in this opinion are defined as follows:

 

“Beijing RYB” means Beijing RYB Children Education Technology Development Limited (北京红黄蓝儿童教育科技发展有限公司), a company incorporated under the PRC laws.

 

“Chinese Entities” means all of the WFOE, PRC Companies and the PRC RYB kindergartens.

 

“Governmental Agencies” means any national, provincial or local governmental agency or body or any other regulator in the PRC.

 

“Governmental Authorizations” means licenses, consents, authorizations, sanctions, permissions, declarations, approvals, orders, registrations, clearances, annual inspections, waivers, qualifications, certificates and permits from, and the reports to and filings with, PRC Government Agencies.

 

“PRC Laws” means all officially published and publically available laws, statutes, regulations, orders, decrees, guidelines, notices, circulars, and subordinate legislations of the PRC currently in effect as of the date of this opinion;

 

“PRC Companies” means WFOE, Beijing RYB and its subsidiaries in the PRC as collectively listed in Appendix I, and each a “PRC Company”;

 

“PRC RYB kindergartens” means all kindergartens directly operated by Beijing RYB or its subsidiaries as listed in Appendix II, and each a “PRC RYB kindergarten”.

 

“Prospectuses” means the prospectus, including all amendments or supplements thereto, that forms part of the Registration Statement; and

 

“VIE Agreements” means the agreements described under the caption “Contractual Arrangements with Beijing RYB” in the section Corporate History and Structure” in the Prospectuses.

 

“WFOE” means Beijing RYB Technology Development Limited (北京红黄蓝科技发展有限公司), the Company’s wholly-owned subsidiary incorporated under the PRC Laws.

 

Based on the foregoing, we are of the opinion that:

 

1.    Each of the PRC Companies has been duly incorporated and is validly existing as a company with limited liability and has full legal person status under the

 

 

PRC Laws. The registered capital of each PRC Company has been paid in accordance with the relevant PRC Laws, Governmental Authorizations and its respective articles of association. Except for the pledges and options on the equity interests of Beijing RYB as expressly provided in the VIE Agreements, and except for the statutory veto right and/or right of first refusal that the other shareholder(s) (if any) of such PRC Companies may have in respect of any transfer or other or disposal of equity interests by any shareholder of such PRC Companies as provided under the PRC Laws, to the best of our knowledge after due inquiry, the entire equity interest of each PRC Company is free and clear of all liens, pledges, restrictions on voting or transfer or claims. The articles of association of each of the PRC Companies comply with the requirements of applicable PRC Laws and are in full force and effect.

 

2.    Each of the PRC RYB kindergartens has been duly established and is validly existing as a private school with limited liability, with full legal person status under the PRC Laws, except as disclosed in the Prospectus under the caption “Risk Factors”, which would not have a material adverse effect. All of the investment interests in each of the PRC RYB kindergartens is owned directly or indirectly by Beijing RYB and its subsidiaries or other minority-interest sponsors (as the case maybe), and except for the VIE Agreements and entrusted investment agreement (as the case maybe), such interests are each free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, or any third party right and was not issued in violation of preemptive or similar rights. Except as disclosed in the Prospectus, the articles of association, business license and other constitutive or organization documents of each of the PRC RYB kindergartens comply with the requirements of applicable PRC Laws and are in full force and effect.

 

3.    To the best of our knowledge after due inquiry, except as expressly provided in the VIE Agreements, there are no outstanding rights, warrants or options to acquire, nor instruments convertible into or exchangeable for, any equity interest in any PRC Company.

 

4.    Except as disclosed in the Prospectus under the caption “Risk Factors”, the ownership structure of the Chinese Entities as set forth in the Prospectuses complies with all existing PRC Laws in all material respects.

 

5.    Except for Ma Jing, all the other individual shareholders of Beijing RYB have entered into the VIE Agreements. The fact that not all the individual shareholders have entered into the VIE Agreements does not have a material adverse effect on the validity and the legality of VIE structure. WFOE and Beijing RYB and, to the best of our knowledge after due inquiry, each individual shareholder of Beijing RYB except for Ma Jing, has full power, authority and legal right to enter into, assume, deliver and perform their respective obligations under each of the VIE Agreements to which he or she is a party, and, such VIE Agreements constitute valid, legal and binding obligations against each of them in accordance with the terms of

 

 

each of the VIE Agreements. The execution, delivery and performance of the VIE Agreements will not result in any violation of any requirement under any PRC Laws.

 

6.    To the best of our knowledge after due inquiry, there are no PRC legal or governmental proceedings pending or threatened to which any of the Chinese Entities is a party or to which any of the properties of any of the Chinese Entities is subject or any statutes, regulations, contracts or other documents which would individually or in the aggregate have a material adverse effect.

 

7.    All dividends and other distributions declared and payable on the equity interests of any of the PRC Companies, in accordance with the PRC Laws can be freely payable in Renminbi under the PRC Laws, and in the case of the WFOE, may be converted into foreign currency and freely transferred out of the PRC subject to certain procedures, as disclosed in the Prospectuses.

 

8.    Under the PRC Laws, none of the Chinese Entities, or any of their respective properties, assets or revenues, is entitled to any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding, setoff or counterclaim, the jurisdiction of any court in the PRC, service of process, attachment prior to or in aid of execution of judgment, or other legal process or proceeding for the granting of any relief or the enforcement of any judgment.

 

9.    On August 8, 2006, six PRC regulatory agencies, namely, the PRC Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission (the “CSRC”), and the State Administration of Foreign Exchange, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which became effective on September 8, 2006, as amended on June 22, 2009. The M&A Rules require, among other things, offshore special purpose vehicles, or SPVs, formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. Based on our understanding of current PRC Laws, we are of the opinion that CSRC approval is not required in the context of the Offering and the Company’s proposed listing of the ADSs on the New York Stock Exchange.

 

10.  The statements set forth in the Prospectuses under the captions “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Dividend Policy,” “Corporate History and Structure,” “Related Party Transactions,” “Business,” “Regulation”, “Enforcement of Civil Liabilities,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Taxation”, insofar as such statements constitute summaries of the PRC legal matters, documents or proceedings referred to therein, in each case to the extent, and only to the extent, governed by the PRC Laws, fairly present the information and summarize in all material respects the

 

 

matters referred to therein; and such statements do not contain an untrue statement of a material fact, and do not omit to state any material fact necessary to make the statements, in light of the circumstances under which they are made, not misleading; and we hereby consent to the use of our name thereunder.

 

This opinion relates to the PRC Laws in effect on the date hereof and there is no assurance that any of such laws will not be changed, amended or replaced in the immediate future or in the longer term with or without retrospective effect.

 

This opinion is rendered only with respect to the PRC Laws and we have made no investigations in any other jurisdiction and no opinion is expressed or implied as to the laws of any other jurisdiction.

 

We hereby consent to the use of this opinion in, and the filing hereof as an exhibit to, the Registration Statement. In giving such consent, we do not admit that we fail within the category of the person whose consent is required under the Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder.

 

			Yours Sincerely,
	/s/Commerce & Finance Law Offices
		Commerce & Finance Law Offices

 

 

Appendix I

 

PRC Companies

 

 

 

 

 

 

 

 

1  Deng Yanling, Cao Anya and Zhouqiao hold 100% equity of Beijing Xueerle Education Technology Co., Ltd. as the nominee shareholders all for the interest of Beijing RYB according to the delegation agreement among the parties.

 

 

Appendix II

 

PRC RYB Kindergartens