Nonprofit and nongovernmental organizations in the PRC (NGOs), both domestic and foreign, have played important roles in China’s economic and social development over the years. While the number of foreign NGOs conducting activities in China has increased significantly in recent years, their operations (including but not limited to registration, funding, scope of activities, etc.) are subject to various vague but strict restrictions imposed by the authorities.
The Administrative Regulations on Foundations issued by the State Council (Foundation Regulations), which took effect June 1, 2004, have been the primary legislation governing the establishment and operation of foundations in China. The Foundation Regulations allow only a Chinese domestic entity or a Chinese national to establish a foundation in China, and requires a foreign entity to use its subsidiary in China as the donor to establish a foundation in China. A foreign foundation is also required to meet a number of requirements for the establishment, including obtaining approval from a Professional Supervisory Unit and the Ministry of Civil Affairs (MCA), which has proved to be very difficult in practice. Rather than establishing a foundation in China, some foreign foundations have chosen to establish a representative office (Rep Office) to facilitate their efforts in China (which also requires the sponsoring by a Professional Supervisory Unit). However, the scope of business of a Rep Office is limited. For example, a Rep Office is not permitted to raise funds or accept donations in China.
Please see full publication below for more information.
