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December 21, 2017

Can a Foreign NGO Pay for Services from a For-Profit Chinese Entity?

Though the Foreign NGO Law forbids foreign NGOs from partnering with for-profit organizations for activities, may foreign NGOs contract with for-profit entities for certain services?

The Ministry of Public Security has not issued official written guidance on this point. According to officials with specific knowledge of the law’s implementation, foreign NGOs may purchase “reasonable” services from for-profit Chinese entities. This might include, for example, hiring a company to help make arrangements for an upcoming meeting. However, the foreign NGO may not use this mechanism to make “covert grants.” Whether or not the purchased services are “reasonable” is up to the discretion of public security authorities, who might consider whether they can clearly see the value of the service.

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