How to make a Non Profit Organization in Japan. ( NPO Hojin = NPO法人= = 特定非営利活動法人 = Tokutei hi eiri katsudou houjin = nonprofit corporation = nonprofit association )
In the case a person ( Named Nancy ) wants to engage in non profit making activity in Japan, but she needs to make legal entity, she can set up NPO in Japan.
For example, she wants to make NPO to help victims in disaster area, she can establish NPO in Japan.
In order to make NPO in Japan, she needs to obtain authorization called ” Ninshou = 認証 “.
She can not make NPO for specific persons.
In the case a person is suffering from intractable disease, she cannot make NPO to support him.
But she can make NPO for people who are suffering from this disease.
If purpose of her organization is included in below, her organization needs to pay corporate tax.
Selling of commodity (物品販売業)
Selling of real estate (不動産販売業)
Money lending business (金銭貸付業)
Lending of commodity business (物品貸付業)
Lending of real estate (不動産貸付業)
Manufacturing business (製造業)
Telecommunication business (通信業)
Carrier business (運送業)
Warehousing business (倉庫業)
Contracting business (請負業)
Printing business (印刷業)
Publishing business (出版業)
Photograph business (写真業)
Lending seat business (席貸業)
Hotel business (旅館業)
Restaurant business (料理店)
agency business (代理業)
whole sale business (問屋業)
Mining business (鉱業)
Hair cutting business (理容業)
Promoting business (興行業)
Game hall business (遊技所業)
Worker dispatching business (人材派遣業)
medical care insurance program business (医療保健業)
Teaching of art business (一定の技芸教授業等)
Parking business (駐車場業)
Guarantor business (信用保証業)
Providing intangible property right (無体財産権の提供等を行う事業)
I know that these descriptions are not clear for you.
So, when you make NPO in Japan, you need to confirm with tax agency whether purpose of your organization is included in these purposes.
For example, if you set up Non Profit Organization to teach foreign language or computing, the purpose is not included in the purpose above.
In order to make NPO in Japan, she needs to obtain authorization called ” Ninshou = 認証 “.
( And if government agency thinks that her NPO will contribute public interest than ordinary NPO, her NPO can obtain authorization called ” 認定 = Nintei “.)
So, even if your NPO receives tuition fee from students, your NPO Houjin ( NPO ほうじん ) does not need to pay corporate tax.
However, when your NPO sells software, computer to your students, as for the selling price, corporate tax shall will levied.
If you set up Non Profit Organization ( NPO ) to manage nursery school ( Hoiku en ), the purpose is not included in the purpose above.
So, even if your NPO receive childcare fee from parents of nursery school children, your NPO Houjin ( NPO ほうじん ) does not need to pay corporate tax.
If your nursery school sells text book, picture book to parents of nursery school children, corporate tax is not levied.
However, when your NPO sells scissors, glue, uniform to your parents of nursery school children, as for the selling price, corporate tax shall will levied.
In the case NPO receives subsidy, membership fee (= kaihi), as far as there is not compensation, basically corporate tax will not be levied.
However, if these subsidy or membership fee is used for business mentioned above, corporate tax shall be levied.
Moreover, even if the subsidy or membership fee are used for the above mentioned business, when the money is used for acquisition of fixed asset, corporate tax shall not be levied.
In the case NPO issues receipt, even if it is related to above mentioned business, stamp duty is not levied.
( In the case of ordinary commercial legal entity, when it issues receipt of more than 30,000 yen, stamp duty is levied. )
However, as for stamp duty on contract paper is always levied.
As for corporate inhabitant tax ( Houjin Jumin zei ), NPO needs to pay it.
However, if it does not conduct business mentioned above, there is a possibility to avoid payment. ( She needs to submit application for exemption from payment ).
NPO can not distribute its profit among members ( It means shareholder in case of joint stock corporation. They are often called ” sei kai in = 正会員 ” ) even if it gets some profits.
If NPO employs some persons, it can pay salary to its employees. And if there is still profit in NPO, such money shall be used for operation of NPO.
NPO can not pay a dividend.
NPO must appoint at least three directors ( Riji ) and one auditor secretary ( Kanji ).
( Herein after referred to “officers” )
And NPO can not include more than two person who is a spouse or relative within the third degree of kinship of any other officer.
So, if she becomes a director of this NPO, her husband can also be a director. But, their child can not be a director.
And officer and his/her spouse and relatives within the third degree of kinship may not account for more than one-third of all officers.
|Director 1||Director 2||Director 3||Director 4||Director 5||Director 6|
|Nancy||Her husband||a person he is not her relative||a person he is not her relative||a person he is not her relative||a person he is not her relative||Acceptable|
|Director 1||Director 2||Director 3||Director 4||Director 5|
|Nancy||Her husband||a person he is not her relative||a person he is not her relative||a person he is not her relative||Not Acceptable|
So, if she and her husband become director, NPO needs to appoint four other officers who are not their relatives within three degree of kinship.
And the number of officers receiving remuneration ( Yakuin Hoshu ) from NPO can not be more than one-third of all officers.
Assumed that she and her husband and four persons are officers in her NPO.
And if she and her husband receive remuneration from NPO, other four officers cannot receive remuneration from NPO.
This remuneration does not mean “salary”.
So, if she works as teacher as well as director and if she receives only salary as a teacher, she is not included in ” officers receiving remuneration from NPO “.
Process of establishing NPO in Japan.
At first, more than two persons should be incorporator ( Hokki nin ) and make articles of incorporation and other necessary documents.
And they need to appoint “Members” corresponds to shareholder of joint stock company.
They have voting right in general meeting.
Voting right of each member should be equal.
Even if she invested in this NPO, she cannot operate this NPO on her own authority.
In the case, other all members resolve that she should leave this NPO, she can not remain in her office.
In order to be a member, they do not have to invest in NPO at the timing of incorporation.
And the number of members should be more than ten ( If she and her husband are member as well as officer, she need to find at least 8 members. ).
Even minor and foreigners, non resident of Japan can be a members.
And these members approve these documents.
Then, she submits necessary documents to competent government agency.
Necessary documents to apply for authorization to make NPO in Japan.
If government agency accepts her submission, competent government agency makes articles of incorporation and list of members public for two months.
And after this period, competent government agency will decide whether to authorize the establishment of NPO or not within two months.
So, in order to make NPO, it will take at least 2 month after application of establishment.
( As for these procedures, Metropolitan Tokyo Government has its jurisdiction if this NPO has its head office within Tokyo. )
Then, she needs to file registration of establishment of NPO at the location of its head office.
When she files registration of incorporation of NPO, she does not need to pay registration tax.
In the case of joint stock company, she needs to pay registration tax of 150,000 yen or more.
And she need to pay notary public of at least 51,000 yen.
However in the case of NPO, she does not need to pay this amount of money.
In order to make NPO in Japan, it will take at least 4 months in Total.
To make necessary documents to submit competent government agency, it will take 2 weeks.
To negotiate with officer of competent government agency : 1 or 2 weeks.
Competent government agency will consume about 3 months to inspect your application.
To complete registration process : 1 or 2 weeks.
😛 Conditions to establish NPO in Japan.
The purpose of establishing this organization should contribute public benefit.
For example, contributing to the sound upbringing of children.
If she establishes a Non Profit Organization in Japan, she can acquire legal entity. So, she can conclude any contract and own real estate under NPO’s name.
And when people look at the term “NPO”, they may think that her legal entity aims to help some people without gaining profit.
And her organization may acquire trust of other party.
( However, NPO can get profit through its activity. )
And in the case of NPO, there is a possibility that her organization can reduce the amount of tax.
On the other hand, Japanese government administer NPO more strictly than other commercial organization.
NPO must keep several regulations and submit several kind of documents.
NPO must make documents that announce status of its business and make it public.
These documents includes as below.
|Business report 事業報告書|
|Statement of accounts しゅうしけいさんしょ|
|Balanced sheet たいしゃくたいしょうひょう|
|Inventory of property ざいさんもくろく|
|Directory of officers やくいんめいぼ|
|Directory of members しゃいんめいぼ|
Once her NPO is set up, if a person asks that he wants to become a member of NPO, you can not reject his proposal without reasonable reason.
If her NPO wants to change content of articles of incorporation, resolution of general meeting and authorization from competent government agency are required.
It will take about 4 months.
In the case her NPO is dissolved in the future, asset of NPO is not reimbursed to her.
NPO needs to donate its rest asset to Japanese government etc.
( Her NPO may pay all asset to its employees as salary, though )Linkedin2016,5,