On April 28, 2016, over a year after the second draft was published in April 2015, the National People’s Congress passed the Law on the Administration of Activities carried out by Foreign Non-governmental Organizations in China (the “NGO Law”), which will take effect on January 1, 2017.
The NGO Law consists of 54 articles divided into 7 chapters, covering registration and record filing of the activities, facilitation measures, supervision and management, and legal responsibilities.
Highlights of the NGO Law:
- Foreign non-governmental organizations (“NGOs”) can carry out activities related to the economy, education, science and technology, culture, health, sports,environmental protection, poverty assistance, disaster relief and other areas to develop public welfare according to the law. Foreign NGOs cannot engage in or financially aid for-profit, political or religious activities in China. Catalogues are expected to provide in-depth details of the scope of authorized activities.
- Foreign NGOs are subject to approval and registration. The Ministry of Public Security and the public security bureaus at provincial level are in charge of registration.
- Foreign NGOs intending to carry out activities in China must establish a representative office for registration; where the activities are only temporary, they will instead file a legal record. This means that foreign NGOs cannot conduct activities in the territory of China or entrust or finance any third party to carry them out without establishing a representative office or completing the record-filing procedure for temporary activities.
Temporary activities will last no longer than a year, and to carry them out, foreign NGOs will cooperate with State agencies, people's organizations, public institutions and social organizations in China (i.e., with a “Chinese partner").
Foreign NGOs can have more than one representative office but, unless otherwise prescribed by the State Council, cannot set up branches in China.
- Every year by December 31, the representative office of a foreign NGO must submit its activity plan for the following year —including project implementation and use of funds— to the competent operational entity for approval and, within ten days after obtaining approval, file it with the pertinent registration authority.
Every year, the NGO will submit the previous year’s operational report to the competent operational entity. After this entity has issued an opinion, the NGO will submit its operational report to the relevant registration authority by March 31 and accept annual inspection. The annual operational report will then be published on the website designated by the registration authority.
A foreign NGO and its Chinese partner must, within 30 days after completion of temporary activities, submit to the registration authority in writing information on the activities and the use of funds.
- A foreign NGO and its representative office cannot request donations in China.
- A foreign NGO with a representative office in China will manage the funds used for activities in China through the bank account submitted by its representative office to the relevant registration authority for record-filing. A foreign NGO that carries out temporary activities must manage the funds used for activities in Chinese territory through its Chinese partner’s bank account. Funds will be subject to separate bookkeeping and earmarked for specific purposes.
- The representative office of a foreign NGO will submit staff information to the competent operational entity and registration authority.
The NGO Law will tighten again the currently loosened administration and registration requirements for foreign NGOs in China, after the establishment of representative offices was suspended for over a year.
Date of issue: April 28, 2016. Effective date: January 1, 2017