Japan NGO Sector
Brief History of Non Profit Organization Law in Japan
“Article 34 of Civil Code” and “Law to Promote Specified Nonprofit Activities”
Article 34 of Civil Code 0f1896 was the very first law for non profit organizations. Under this law, qualified organizations for Public Interest Legal Persons (PILPs also known as Koeki Hojin) are recognized as public benefit judicial bodies and also entitled to receive tax privileges from state. However, in order to register as PILPs, the organization must have significant revenues and capital: the organization must establish having a minimum 300 million yen ($2.5 million) in funds and at least minimum 30 million yen ($ 0.25 million) for annual operating budget . Besides these strict financial requirements, Article 34 of Civil Code also lists various qualifications that many start-up voluntary organizations or charities may not meet. In addition to those hurdles, in order to be PILPs, organization needs to pass the permitting system given by the government permitting ministry. If the organization’s objectives differ from the permitting ministry’s objects, it is also hard to gain PILP status . For these reasons, many charitable organizations have operated without recognition as public benefit judicial bodies by the Japanese government. The state registration for organizations has and continues to pose difficulties for small grassroots organizations to launch or expand their volunteer activities. Without official recognition by the state, they are unable to rent office space, open a bank account, and not able to receive tax deductions as a public benefit judicial body .
