Uncertainty Looms for Foreign NGOs in China

Uncertainty Looms for Foreign NGOs in China

China’s new foreign NGO law is less than a month from implementation. foreign NGOs operating in China are increasingly concerned. The law is a sweeping change for foreign NGOs in China and may have broad consequences.

Previously, foreign NGO’s had no special treatment under China law, they could register as standard NGO’s or Charities, however in practice registration was denied to most foreign NGOs while only allowed for those with major political connections such as the Bill and Melinda Gates Foundation.

In this circumstance, many foreign NGOs went the route of registration as normal Chinese foreign invested companies. With a China WFOE in place, the china company would provide “consulting services” for the foreign NGO parent. There was no real law in China addressing this practice, and many foreign NGO’s found success in their operations using this model.

The New foreign NGO law, coming into force on January 01 2017 changes all of that. foreign NGOs will be required by law to register as Representative Offices in China, having less legal and business capacity than a WFOE. Individuals and companies found “carrying out the activities of” a foreign NGO will be in violation of law.

The thing is, details regulations on registration of a Representative Office for such a foreign NGO have not been published to date. Come January 1, No foreign NGO will be able to have the correct legal Representative Office structure up and running. Any foreign NGO activity in China will be illegal.

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