China has revised regulations governing the management of foundations to strengthen their credibility and promote their healthy and orderly development, with the new rules set to take effect on Jan 1, 2027.
The regulations, introduced in 2004, have been amended to address issues including weak internal governance, irregularities in organizational activities and insufficient oversight, according to the Ministry of Justice and the Ministry of Civil Affairs.
The civil affairs departments at all levels are responsible for the registration and supervision of foundations.
The revised regulations aim to improve foundations' internal management, standardize their activities and strengthen oversight, the two ministries said.
Under the new rules, foundations engaged in public welfare activities must uphold the principles of legality, voluntariness, integrity, openness, transparency and nonprofitability.
To be established, a foundation must have a clearly defined charitable purpose and sufficient registered capital, which must be contributed in cash. For example, a foundation registered with city-level civil affairs authorities must have registered capital of at least 2 million yuan ($300,000).
A foundation must also have an official name, a formal charter, an organizational structure, full-time employees and a permanent address.
The regulations also set restrictions on who may serve in key positions. Individuals who lack or have limited capacity for civil conduct are prohibited from serving as founders, chairpersons or supervisors of foundations. The same restriction applies to individuals who are currently serving or have previously served criminal sentences involving the deprivation of political rights.
Chairpersons, directors and supervisors of foundations must not privately distribute, misappropriate, withhold or embezzle foundation assets, or obtain them through corruption.
The regulations further stipulate that founders, major donors, responsible persons, directors, supervisors and other individuals associated with a foundation must not abuse their relationships with the organization to harm its interests, those of its beneficiaries or the public interest.
Foundation assets and legitimate income are public property protected by law. No organization or individual may misappropriate, withhold or unlawfully acquire such assets.
Foundations are also prohibited from financing profit-driven activities or using their names or project brands for noncharitable purposes.
In addition, foundations must be subject to public scrutiny and ensure that their disclosures are truthful, accurate, complete and timely, with no false records, misleading statements or major omissions.
According to a report by the Ministry of Civil Affairs, China had 9,801 foundations as of the end of 2024.
