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Set up a Chinese Foundation

Set up a Chinese Foundation

NGOs (non-governmental organizations) in China are mostly seen in the education field, science, IT, and healthcare or are established for environmental protection purposes but are not limited to these. According to the Charity Law and Overseas NGO Law, a foundation can run under the rules of ROs (representative offices in China) and is subject to varied governmental incentives, particularly for tax matters. We invite you to talk to our team of company formation specialists in China and solicit support and information about how you can set up a Chinese foundation.

What are the criteria for founding a charity in China?

A foundation in China can be established with respect to a series of regulations mentioned by the Charity Law, such as:

  • a foundation needs to offer strong details about the objectives and the business scope of the entity;
  • in the case of litigation, the NGO is liable for damage payments;
  • a charity needs to be settled for at least 2 years in order to register the RO in China;
  • the foundation in China will be considered a legal entity in the country of origin.

If your NGO meets the above-cited criteria, the Overseas NGO Administration Office which is part of the Public Security Department of the Provincial People’s Government in China will deal with the paperwork and the applications in this matter. This institution will determine whether your foundation may activate in China or not.

Do I need a bank account for my NGO in China?

Yes, if your application for setting up a Chinese foundation has been approved, you may open a bank account, and apply for a tax registration number and a seal. We mention that a power of attorney is necessary for opening the RO in China under which your foundation will activate.

If you would like to open a company in China or if you want to set up a foundation in China, please feel free to talk to our company formation representatives.

What other documents do I need for opening an NGO in China?

Foreign charity organizations who decide on NGOs in China must provide articles of association and proof that they have been running for at least two years in the country of origin. A statement of a clear criminal record of the representative of the NGO needs to be considered at the time you wish to register the charity. All the documents need to be notarized to a public notary in China.

Those interested in company formation in China have specialized help provided by our local specialists. In this regard, it is recommended to appoint a representative and open a local bank account. Moreover, you must consider the accounting legislation and align yourself with it before starting your company’s activities. Therefore, contact us as soon as you decide on a business in this country.

Temporary activities of Chinese foundations

Foreign NGOs cannot carry out their activities in mainland China after registering a representative office. However, it is possible to obtain a permit for developing temporary activities as NGO from overseas, if the RO is not in China. Thus, with this type of permit, temporary activities can be carried out, as long as they are in collaboration with the governmental authorities in China, even with non-governmental or social organizations. Here are other interesting aspects:

  • One needs a Chinese cooperative partner that agrees with temporary activities carried by us through an overseas NGO.
  • Once the partner is chosen, he will take care of various formalities, in collaboration with the local authorities.
  • The record-filing procedures and other formalities must be completed 15 days before the start of temporary activities.
  • An agreement between the Chinese cooperative partner and the Chinese foundation is necessary.
  • In this regard, documents will be drawn up to certify the name, objectives, and source of funds for temporary activities, as well as their duration.
  • Documents and information about the Chinese bank account used will be passed.
  • Documents certifying administrative regulations are also required.

It is good to know that temporary activities can be carried out during a year, according to the People’s Republic of China NGO Law. If it takes more than 1 year for this type of activity, another record filling must be made. We invite you to discuss more about company formation in China and Chinese NGOs with temporary activities.

Can Chinese foundations be rejected by the government?

There is a possibility that an overseas NGO may not be able to carry out its activities, especially if they are temporary. This happens because sometimes it is difficult to find a partner in this sense, as mentioned above among the rules for temporary activities of an overseas NGO. However, if you are faced with such a situation, you should know that you can appeal this decision with the Ministry of Public Security in China.
We also mention that the authorities supervise the activities of Chinese foundations to detect those who operate illegally precisely because of the rejections that may appear from the very beginning.

Why work with us for opening a Chinese foundation?

We have experience working with both local and foreign citizens interested in starting a foundation in China, so we can offer specialized help in this endeavor. We can advise you on the legislation and the best business practices so that you can access the Chinese market with your foundation.

Statistics about NGOs in China

You can discover in the following lines some statistical data about the number of NGOs in China:

  • According to the data for 2019, around 800,000 non-governmental organizations were registered.
  • Only 0.3% of the total number of NGOs in China are involved in charitable activities in the northwest of the country.
  • Around 3.1% of all non-governmental organizations have charitable activities in Eastern China.
  • It can be said that around 10,000 Chinese foundations deal with charitable acts and activities of this kind in China.

Feel free to contact our company incorporation specialists in China and ask about how you can set up a Chinese foundation. We can help you register a company in China, regardless of the field of activity.