Types of non-profit organizations in Japan
In Japan, a non-profit organization is defined as a legal entity that is not allowed by law to share profit with its members or stakeholders.
The following three types of non-profit organizations exist in Japan:
・ Tokutei Hieiri Katsudo Houjin (what an NPO is called in Japan)
・ Shadan Houjin (Incorporated Association)
・ Zaidan Houjin (Incorporated Foundation)
Although some NPOs call themselves NGOs (non-governmental organizations), the NGO does not exist as official organizational form in Japan.
Tokutei Hieri Houjin (NPO) is the newest of these three organization types. It is the legal entity defined by the Act on Promotion of Specified Non-Profit Activities, which is commonly known as the “NPO law.”
Shadan Houjin (Incorporated Association) and Zaidan Houjin (Incorporated Foundation) are the legal entities defined by the Act on General Incorporated Associations and General Incorporated Foundations.
The area of activities for NPO
1. Public health, welfare, and healthcare
2. Social Education
3. Local community development
4. Tourism
5. Rural development
6. Cultural activities, arts, and sports
7. Environmental conservation
8. Disaster relief
9. Local community safety
10. Human rights and world peace
11. International cooperation
12. Gender equality
13. Education of children
14. Promotion of IT society
15. Scientific advancement
16. Stimulating economy
17. Employment promotion and career skills development
18. Consumer protection
19. Activities to encourage organizations that engage in activities described above
20. Other activities that are defined by local government law
The outline of the procedure for setting up an NPO (Tokutei Hieiri Katsudou Houjin) in Japan
The procedure is basically simple. You have to prepare the necessary documents and apply for related 2 authorities. One is the local government to obtain the certification of establishment and the other is the legal affairs bureau, which provides registration services for companies and other organizations.
During the procedure, you have to complete the following eight steps:
(1) Determine the fundamentals of the organization for yourself or with founding members.
(3) Prepare all necessary documents and apply to the supervising authority, which is the local government that governs the area in which the organization’s main office is located, to obtain a certification for the establishment.
(4) The application will be open to public inspection by the local government for at least two weeks.
(5) After the public inspection, the local government commences the screening process, which usually takes two months.
(6) If approved, the local government publishes the certification for the establishment.
(7) Register the NPO with the certification at the Regional Legal Affairs Bureau in 2 weeks.
(8) Report the registration of the NPO to the related authorities.
More detailed explanation of the procedure
Determine the fundamentals of the organization
Typical fundamentals of the organization include the following:
Name of the NPO, The main office address, Mission, Non-profit activities, Action plan and financial plan, Membership rules etc.
Hold the meeting for the establishment
The following essential items have to be determined during the meeting.
・The memorandum of intent for the establishment
・The article of incorporation
・A list of candidates for directors (Riji) and auditors (Kanji)
・Amount of compensation for directors and auditor(s)
・The enrollment and membership rules including the membership fee
・Office address(s)
・The annual action plan and the financial plan for the establishment year and the following year
・Inventory of the assets
Prepare all necessary documents to apply to the supervising authority to obtain a certification
After holding the meeting for the establishment, you must obtain a certification of establishment from the supervising authority.
The supervising authority will be the prefectural government or the city hall of government ordinance-designated cities,
In order to apply, you have to prepare all the following documents:
1. The application form
2. The articles of incorporation
3. A list of directors (Riji) and auditor(s) (Kanji)
4. Copies of the letter of acceptance and pledge from every director and auditor(s)
5. Official papers to certify the residence of the director and auditor(s)
6. A list of the members
7. The confirmation letter to affirm that the organization is not in conflict with any part of the NPO law
8. The memorandum of intent for the establishment
9. A copy of the minutes of the meeting for the establishment
10. The action plan for the establishment year and the following year
11. The financial plan for the establishment year and the following year
Open for public comments by the local government (at least two weeks)
Screening by the local government (usually takes two months)
Obtaining certification for the establishment
Once all processes have been completed and the application is finally accepted, the local government publishes the letter of certification for the establishment of the NPO and sends it by mail.
Registration at the Regional Legal Affairs Bureau in 2 weeks
The NPO is not officially established until you register it with your local Legal Affairs Bureau.
You have to apply for registration within 2 weeks of having received the certification of the establishment.
Report the registration to related authorities