Zhai Meiqing, president of the Heung Kong Group (香江集团) and member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), has submitted a proposal to the Committee, calling for the establishment of supporting mechanisms for non-public fundraising foundations to set up charitable trusts, thereby better combining the public welfare sector and the financial system, and motivating more people to participate in charities.
Charitable trusts, unlike other types of trusts, are established for public welfare purposes and all proceeds generated are donated to public welfare organizations. According to the Trust Law of the People’s Republic of China (中华人民共和国信托法）, there are 7 types of charitable trusts, including trusts created for the purposes of relief for the poor, disaster relief, and helping the disabled. Last year the China Banking Regulatory Commission issued the Guiding Opinions on the Supervision and Risk Control of Trust Companies (关于信托公司风险监管的指导意见 ), which encourages the development of charitable trusts and urges trust companies to take on social responsibilities.
Zhai also pointed out that charitable trusts currently don’t enjoy preferential tax policies, and that it would be beneficial to create a more favorable environment for the development of charitable trusts by reference to the Regulations on Foundation Administration (基金会管理条例）, which offers tax incentives to foundations and those donating to foundations.
