Are foreign NGOs allowed to generate income? For example, may foreign NGOs charge for providing services or licensing intellectual property rights in China?
Articles 5 and 45 of the Foreign NGO Law suggest that foreign NGOs may not engage in “for-profit activities.” However, according to the NGOs in China blog’s summary of guidance provided by the Ministry of Public Security at a 2016 Q&A session, “Article 21 [of the law] permits foreign NGOs to use ‘other funds legally acquired within China’ for their activities in China. This means income or revenue is allowed as long as the foreign NGO keeps its not-for-profit nature, namely, will not distribute dividends or profit to its shareholders [or] owners. For example, it is permissible for a foreign NGO to charge a fee for providing services or licensing intellectual property rights to a Chinese party.” However, the National People’s Congress has not yet specified what constitutes “other funds legally acquired within China.”