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April 23, 2017

How Does the Law Apply to Non-Profit Performing Arts or Other Cultural Groups?

How does this law apply to foreign performing arts or other cultural groups that are non-profit but sell tickets and merchandise in China? What if these groups work with for-profit entities in China who work as booking or sales agents?

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.”

While the law is unclear on how a foreign non-profit performance group is supposed to interact with a domestic for-profit booking or sales agent (given that only “state organs, mass organizations, public institutions, or social organizations” may act as partner units for a foreign NGO carrying out temporary activities in China), the act of selling tickets and merchandise would be acceptable as long as any profits resulting from such sales are not distributed to shareholders.

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