Asia Pacific

ASIA PACIFIC

For a complete listing of Documents the ICNL has in its documentation center on the Asia Pacific Region, Click Here!

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Framework Legislation

Following the promulgation of the first two regulations affecting NGOs (reported in the March issue of IJNL), the State Council also issued a decree promulgating “Interim Regulations Governing the Registration and Management of Institutions,” Decree No. 252. These interim regulations deal with a new type of organization, previously unknown in China, and they help to clarify the role of these organizations within the growing civic sector.

Institutions are described by the Decree as being “social service organizations sponsored by state organs or other organizations using state-owned assets that engage in educational, science and technological, cultural, health, and other activities for the purpose of social welfare.” They are thus much more closely linked to the state than are associations and private nonenterprise units (PNUs) discussed in the previous issue. Because of this relationship, it can be assumed that the state will determine whether an institution should be set up, thus eliminating the need for a supervisory body and for the approval of such a body prior to registration. Institutions are required by the new decree to work very closely with the officials of the Ministry in charge of registration and management (Ministry of Civil Affairs) to ensure that they comply with the rules set down in the decree.

One of the interesting aspects of institutions is that the Decree recognizes that they may “sponsor” “organizations of a business nature.” This presumably permits them to organize and operate for-profit activities within the institution and as wholly-owned subsidiaries. The Decree makes clear that if institutions do engage in such activities, separate books and records must be kept for the business activities and the social welfare activities. Whether this requirement will be adequate to deal with all possible abuses that may arise remains to be seen. However, it represents a good attempt to contain possible opportunities for corruption and self-dealing.

Tax Legislation

The State Administration of Taxation (STA) issued a notice in April setting out the rules on the taxation of government units, social organizations, and not-for-profit organizations (Guo Shui Fa (1999) No. 65, April 16, 1999). The notice contains 20 separate articles dealing with various aspects of taxation of NGOs. For further information, please contact ICNL.

For a complete listing of Documents the ICNL has in its documentation center on China, Click Here!

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