Editor’s Note
This article was originally published by the Center for Charity Law of the China Philanthropy Research Institute at Beijing Normal University. You can find the original here.
It has been more than four months since the “Law of the People’s Republic of China on Administration of Activities of Overseas Nongovernmental Organizations in the Mainland of China” came into force. Many ONGOs still face practical challenges, however, when trying to establish ROs and file records of temporary activities etc. This post answers 30 common questions that have arisen in the registration and record-filing processes. Information is summarized from seminar content, participant feedback, and our own practical experience.
The below information is for reference only and has no legal validity. For more specific information, please refer to the official interpretations issued by registration management organs.
In the event of any inconsistency between the Chinese and English text, the Chinese text shall prevail to the extent of the inconsistency.
Section 1: The Establishment of Representative Offices (ROs)
1. How should an organization prove that it is an “overseas non-governmental organization (ONGO)”? What are the requirements for documents and other materials proving that the ONGO is legally established?
The prerequisite for applying to establish an RO is to prove that the headquarters of an organization is a legally established ONGO. Two sets of documents need to be submitted: 1) Evidence of legal establishment outside Mainland China; and 2) Documentary evidence of its non-profit nature.
Evidence of legal establishment outside Mainland China refers to evidence that an organization has been registered overseas with relevant government agencies, and is an independent legal person able to bear civil liability. Documents and other materials that prove that the ONGO is legally established overseas must be issued by official foreign agencies.
Documents demonstrating the non-profit nature of an organization will vary depending on country and region. Whether such documents sufficiently demonstrate this status will depend on the relevant laws and regulations of that specific country or region. In the United States, for example, an organization would be considered to be non-profit in nature if it meets the requirements of the Internal Revenue Code 501 (C) (3), 501 (C) (4) or other provisions and is exempt from certain federal taxes. A U.S.-based ONGO would only need to submit documents proving its registration, and would not be required to submit its tax documents. For ONGOs from the United Kingdom, proof of registration at the Charity Commission for England and Wales would be sufficient.
2. If an ONGO’s proof of legal establishment outside Mainland China is its business license, will it be necessary to submit the original copy of the business license from its headquarters?
This is not necessary. Taking into account that the original copy of the business license is of great importance, it will not be necessary to produce the original license; instead, documentary evidence demonstrating legal establishment of the ONGO should be requested from authorities. If the foreign government departments in the country where the ONGO is based cannot issue such documentary evidence, copies of the original business license as well as other relevant documents may be submitted after being notarized and authenticated in-country. Materials written in foreign languages should be translated into Chinese.
3. What are the requirements for the “articles of association” of an ONGO?
“Articles of association” are internally drafted NGO documents. Typical NGOs will note their non-profit nature within these articles of association. Complete versions of the articles of association must be submitted; partial or non-contextualized articles of association may not be submitted.
4. What should be included in the contents of the “Letter of Authorization for Registration of the Representative Office of the ONGO”?
Some organizations have raised the issue that public security organs in different locations have different requirements regarding the letter of authorization. Since the Ministry of Public Security (MPS) has not yet issued specific guidelines, the respective standards of each local public security organ must be followed.
For example, in Beijing, the Beijing Municipal Public Security Bureau requires the approval document to be issued by the headquarters of the ONGO, and should contain two parts.
First, the document must show that the ONGO headquarters have authorized the establishment of a Beijing RO. This authorization must indicate that the headquarters agree to set up a Beijing RO and authorize the Beijing RO to exercise part of its authority on its behalf. This authorization should state as clearly as possible the exact location of the RO. Terms such as “in China” or “nationwide” are not sufficient.
Second, the document must list the names of the chief representative and other representatives. There is no need to submit a list of employees. The authorization document needs to be signed or stamped by the head of the headquarters.The authorization document does not need to be notarized or authenticated. If the document is in a foreign language, it needs to be translated by a qualified translation agency.
The two parts of this authorization can be submitted in the form of two separate documents; however, when submitting them to the registration website, they need to be merged into a single PDF document before being uploaded.
5. What evidentiary materials must be submitted to demonstrate that the “ONGO existed and engaged in substantive activities overseas for more than two years”?
ONGOs will have to submit two types of evidence: “internal documentation + third-party verification”.
First, ONGOs have to submit financial audit reports of the past two years issued by a third party and satisfying the requirements of the host country.
Second, ONGOs have to submit an annual activity report of the past two years, signed by the head of the ONGO. The financial audit report is to prove that the ONGO has a cash flow and it is not merely an“empty shell”; if there is no financial report, relevant financial statements can be submitted in replacement. If the annual activity report is too long, NGOs can provide summaries of the year’s activities that are representative, have practical significance, and reflect the characteristics of the organization, so long as they are sure to include the names and brief descriptions of these activities. The audited materials and activity reports should be issued by ONGO headquarters. If it is currently impossible to submit materials relevant to activities held in 2016 (for example, the annual report on activities held in 2016 will not be issued until June 2017), reports for 2014 and 2015 may first be submitted, along with an attachment from the ONGO headquarters indicating that“the report for 2016 is currently under preparation according to the law, and it is temporarily unavailable” or similar content. Public security organs will take this into consideration.
6. What do ONGOs need to submit to satisfy the requirement for “Identity document and Curriculum Vitae (CV) of the chief representative of the Proposed Representative Office”? What types of ID meet the requirements? What are the requirements for the CV? Are there any requirements for the duration of employment?
“Identity document” refers to identification such as a PRC Resident Identity Card, foreign ID card, passports, Exit-Entry Permit for Travelling to and from Hong Kong and Macau, etc. Foreign documents need to be notarized and authenticated. A CV needs to show clearly every period of previous employment, and indicate clearly each employment period from a certain month in a certain year up to another certain month in a certain year. It also needs to indicate clearly a certain type of employment in a certain place. It is best that the CV timeline be continuous, with no time gaps. The CV should be in chronological format, indicating experience from university up to current employment. The CV does not require notarization or authentication, but it requires the signature of the chief representative of the RO.
The validity of the documents of the chief representative and other representatives of the ONGO will be determined in accordance with the duration of their employment. The maximum duration shall not exceed 5 years. The representatives will enjoy special visa privileges for foreigners of high talent. Detailed policies will be introduced in the near future.
7. Is it necessary to approach local public security organs to obtain documentation for “Certificate / Statement of No Criminal Record of the Chief Representative”?
No. The chief representative can sign a standard clean criminal record statement, and no notarization or authentication is needed if it is issued in China. The chief representative is responsible for the authenticity of the signature. Evidence of no criminal record issued in other countries where the chief representative is a citizen needs to be notarized and authenticated.
8. What does “Proof of Location of the RO of the ONGO” include?
This includes two documents: a property rights certificate of the RO, and a lease between the RO and its landlord. The property rights certificate is to prove the existence of the actual office location, and the lease is to prove a lease relationship. ONGOs who cannot sign a lease contract before registering as an RO can first sign the lease in the name of its headquarters, and modify the lease once the RO is established.
9. What are the specific requirements for the “Letter of Approval from Organizations in Charge of Operations (OICO) (also known as Professional Supervisory Units – PSUs)”?
First, the letter must be an official regulatory document. For registration in Beijing, the letter should be written to either the ONGO Management Office of Beijing Municipal Public Security Bureau or the ONGO that is applying to establish an RO.
Second, the letter issued by the OICO must contain content that shows that the OICO agrees to become the OICO of the ONGO’s Beijing RO. The letter cannot say that it approves the establishment of an RO of the ONGO. The OICO does not have the authority to approve the establishment of an RO. This power lies with public security organs.
In addition, the name and contact information of the contact person from an OICO must be stated for verification purposes. On the letter, there should also be an official seal from a ministry-level administrative unit, or a department-level administrative unit that has the authority to approve activities involving foreign entities (for example, the International Cooperation Department of the Ministry of Civil Affairs). For municipal-level administrative units, the official seal needs to be provided rather than a stamp from branch offices.
10. Among all the documents that need to be submitted, which of them require notarization and authentication?
Materials requiring notification and authorization include “three sets of documentary evidence and one set of articles of association”: 1) Documents and other materials that prove that an ONGO is legally established overseas; 2) Documents and other materials that prove an ONGO existed and engaged in
substantive activities overseas for more than two years; 3) The identity document of the chief representative of the proposed RO; and 4) The articles of association of the ONGO.
The procedures for notarization and authentication vary from place to place, but all of the documents must be authenticated by the Consulates General of the People’s Republic of China in their locations in different countries and regions. In the United States, ONGOs must take relevant documents and find a local lawyer to obtain notarization, and then obtain authentication from the state authorities, the Department of State, and finally from the Consulate-General of the PRC. The requirements for Hong Kong differ in that documents need to be approved by notaries recognized by the Ministry of Justice of the People’s Republic of China and qualified to notarize documents in Mainland China. The notaries that are qualified to notarize the documents can be identified on the Ministry of Justice’s website. In general, notarization and authentication are the responsibilities of ONGO applicants. The registration authorities for ONGOs should be receiving documents that have been authenticated by the Consulates General and translated into Chinese by qualified translation agencies.
11. Do all foreign language materials need to be translated?
When authenticating documents with consulates in different countries, there are two types of situations that will determine whether or not translations need to be provided.
In the first situation, if the consulate in a certain country (including the United States) does not require Chinese translation during authentication processes, ONGOs will need to find a qualified translation agency in Mainland China to translate all the documents, including the notarial certificates after notarization. Qualified translation agencies refer to those agencies that are eligible to affix record numbers onto the documents. It is recommended that ONGOs ask domestic notary institutions to designate a qualified translation agency to translate relevant materials to facilitate the notarization process.
In the second situation, if the consulate requires the submission of a Chinese translation when authenticating documents, and recognizes the Chinese translation submitted and authenticates it, registration authorities will also recognize these translated documents.
In either situation, the notarial certificates must be translated, because consulates generally do not require ONGOs to submit notarial certificates that are translated into Chinese. If consulates in the country only refer to the Chinese translation when authenticating and do not certify the translation, then the documents need to be translated once again in Mainland China. Materials written in traditional Chinese need to be converted into simplified Chinese and signed by the responsible party, but do not need to undergo notarization and authentication. Cantonese or Hokkien materials need to be translated into Mandarin, and undergo notarization and authentication.
12. The RO registration website does not allow an organization to create more than one account. If an ONGO would like to establish multiple ROs in Beijing and other places, what should it do?
Each organization, including the Chinese partner, can only have one account. Applications for multiple ROs need to be submitted via the same account. The mobile phone number used to register the account is very important. When proceeding to follow-up procedures after online submission of documents, the appointment times and other notifications will be sent to the registered mobile phone number. Changes to mobile phone numbers should be promptly updated on the website.
13. Are ONGOs eligible to organize events and activities in other places? Can the “Area of Activities” be indicated as “nationwide”?
The events and activities must be located within the registered “Area of Activities.” Plans for organizing events and activities must be indicated in the annual plans of the ONGOs. If the RO is established in Beijing while the “Area of Activities” is indicated as “nationwide”, ONGOs will not be eligible to establish ROs in other places. Therefore, ONGOs need be cautious when choosing “nationwide” for “Area of Activities” as public security organs will examine this indication closely.
Section 2: Submitting documents to file a record to conduct temporary activities
1. Does the “record filing management organ” for a temporary activity refer to the public security organ in the location where the temporary activity takes place?
No, the record filing management organ refers to the public security organ where the Chinese partner is located. According to the law, “Chinese partners of ONGOs conducting temporary activities shall handle examination and approval procedures in accordance with State regulations and submit to local registration authorities the following documentation and information for their records 15 days before temporary activities commence”.
2. How can a temporary activity record be filed if there is more than one ONGO or more than one Chinese partner participating?
Activities should be filed on record in accordance with project division. Each project should be put on record separately.
3. What materials are required for the record of temporary activities?
“Form for Record of Temporary Activities by ONGOs” (This form can be completed either online or in writing);
1) Documentary and material evidence of the legal establishment of the ONGO;
2) A written agreement between the ONGO and its Chinese partner (similar to a contract);
3) Evidence of costs and funding sources as well as the bank account details of the Chinese partner;
4) Approval documents obtained by the Chinese partner, and the documentary and material evidence of the legal establishment of the ONGO (requiring notarization and authentication).
4. If an ONGO would like to carry out multiple temporary activities successively, will it be required to provide original documentary and material evidence of the ONGO’s legal establishment every single time?
ONGOs will only need to submit original documentation the first time a temporary permit is recorded. Again, these original documents need to be notarized and authenticated. ONGOs do not need to re-submit the original documents for other activities recorded within the same year. If the documents are submitted in provincial regions or cities for the first time, the authenticity and time validity of the documents will be verified through the administrative contact mechanism system. If a document meets the requirements, only a copy of the document will be needed.
5. What should be included in the “Written Agreement Between the ONGO and its Chinese Partner”? Are the original documents required when processing the filing of the record?
The written agreement should include, but not be limited to, the name of the temporary activity, type of activity, location, time, funds, content, activity modality, and other information. It needs to be signed and sealed by both parties. Documents in foreign languages need to be translated. Original documents are needed for recordation. After being filed on record, original documents will be returned. The agreement is of great importance and must be worded and signed carefully.
6. Which organization should provide evidence of costs and funding sources for temporary activities?
The evidence for costs and funding sources for temporary activities should be unitarily issued by the organization that provides the most funds. However, each individual funding party is required to provide evidence explaining its funding sources. The evidence needs to be signed, and should be translated into Chinese if it is in a foreign language. If an activity is fully funded by an ONGO, the ONGO should issue a document containing a statement such as “all funds are financed on our part”. If the ONGO and the Chinese partner each funds 50% of the program, then each of them should provide explanations for their respective funding methods. In either case, the Chinese partner needs to provide its bank account and its bank of deposit, and indicate that “all funding of this activity will be processed via this account”, and that “the funds are used for their intended purposes” etc. The Chinese partner can issue this statement in a separate document or attach it at the end of the evidence statements.
Even if the source of funds has been indicated in the written agreement between an ONGO and its Chinese partner, it is still necessary to submit separate evidence of costs and funding sources.
7. If there is more than one ONGO or more than one Chinese partner participating in the activity, which organizations are required to issue the evidence of costs and funding sources?
The organization that provides most of the funds should issue the document for evidence and specify the methods of funding for the other organizations. For example, if there are three ONGOs participating in a program and they fund RMB 1 million, 300,000 and 200,000 respectively, then the one who funds 1 million should issue the statements of evidence of costs and funding sources, and specify the funding methods of the other organizations that are co-funding the program.
8. How are “Approval Documents Obtained by the Chinese Partner” issued?
To provide an example, in Beijing, the approval documents refer to an official letter issued by the upper-level management department of the Chinese partner (not the registration management organ) to the ONGO Management Office of the Beijing Municipal Public Security Bureau or the Chinese partner. The letter should not be addressed to the ONGO directly. The letter should state that the upper-level management department approves of the cooperation between the organizations in carrying out a certain activity at a certain time. Contact information (name of contact person and number) should be stated, and the letter needs to be affixed with the seal indicating approval for an activity involving foreign affairs.
9. If an organization is to carry out an activity in multiple jurisdictions, and has filed records in one of those jurisdictions, can it present the receipt of the record to public security bureaus in other locations where the activity will take place in order to simplify the records filing process?
All activities that have been filed on record will be published online, and there is no need to conduct record filing again for other locations.
10. Is it necessary to file the record of an activity if the activity is set to be carried out in 2017 while the funds for the activity have already been transferred to the account in the year 2016?
Yes. As the activity will be carried out this year, it is subject to the relevant law and the activity needs to be put on file.
Section 3: Other questions
1. How should a foreign representative of an RO of an ONGO apply for a visa?
To give an example, in Beijing, the foreign representatives of an RO of an ONGO registered in accordance with the law may take a “chief representative certificate” or “representative certificate” issued by the Beijing Municipal Public Security Bureau, and go to the State Administration of Foreign Experts Affairs (SAFEA) to obtain a work permit. They will then have to go to the relevant immigration departments to apply for work-type residence permits and other visa certificates. The visa application procedures for foreign employees remain unchanged.
2. Is there any requirement for the number or proportion of expatriates in an ONGO?
There is no such requirement so far.
3. Can an ONGO continue implementing activates that it had already begun before the law came into effect?
Many ONGOs have ongoing activities that were carried out prior to the law coming into effect. For example, ONGOs may have signed a contract in 2015 and are carrying out activities between 2015 and 2017, or they might be carrying out activities and have signed related contracts before the implementation of this Law and having to perform relevant parts of the contract. Due to the fact that ONGOs might not have set up ROs, public security departments would usually take these circumstances into consideration and be flexible. However, ONGOs must conduct recordation of their temporary activities as soon as possible. Public security departments will examine every case closely and will pay special attention to contracts signed that might be suspected of intending to evade regulation under the ONGO law.
4. Is the preparation work for registration of an ONGO legal if the ONGO does not have a RO in China yet?
Activities of ONGOs related to the establishment of its RO are legal. But the ONGO must not carry out other irrelevant activities in the name of such preparation work. The establishment of an RO needs to be processed as soon as possible. The preparation process should not be indefinite.
5. Is there any change in the procedures of foreign exchange settlement?
There is no change in foreign exchange settlements; these will continue to be carried out in accordance with foreign exchange regulations.
6. Should donations from ONGOs for activities carried out inside China be put on file? Can domestic organizations receive donations from ONGOs? Can ONGOs passively receive unspecified donations?
ONGOs donating to activities in Mainland China need to be recorded as temporary activities. For example, if ONGO A cooperates with a Chinese Partner B to carry out activities and ONGO C donates to support the activity, it is necessary for B to act as the Chinese partner of C and conduct the filing process of the temporary activity.
Domestic organizations can receive donations from ONGOs. But they cannot violate Article 32:” No organization or individual in the mainland of China shall be entrusted or financed by an unregistered representative office of an overseas NGO or an overseas NGO that has not submitted the necessary documents for the record to carry out temporary activities in the mainland of China, nor shall they agree to act in the capacity of an agent directly or covertly of the aforementioned for such a purpose”.
Whether ONGOs can passively receive unspecified donations is still undecided, and further rules will be released soon.
7. Does cooperation between Chinese colleges or universities and ONGOs require approval from the Ministry of Education of the People’s Republic of China?
Universities that have the right to approve activities concerning foreign affairs, including Tsinghua University and Peking University, can approve their own cooperation with ONGOs. They don not need to go to the Ministry of Education for every activity that they carry out. As there are many activities or events organized together by ONGOs and Chinese universities, legislators have decided that the universities with the right to approve activities involving foreign affairs may independently approve such cooperation. Cooperation between foreign and Chinese universities is not subject to the ONGO Law.
If you would like to obtain more information regarding the establishment of ROs, recordation of temporary activities, or any other relevant issues, please contact cprilaw@bnu1.org.
