What steps are required to register a nonprofit organization in Japan and maintain its public benefit status?

Dear Sir

Thank you for your inquiry regarding the establishment of an NGO focused on youth education in Tokyo. This is a commendable initiative.

Registering a non-profit in Japan involves a specific two-tier legal process that is quite different from many other jurisdictions. To successfully attract donations, simply registering is often not enough; you need a specific status to offer tax deductions to donors.

Here is an overview of the critical steps and obligations involved:

1. Initial Registration (NPO Corporation)
To establish the legal entity (Tokutei Hiei Katsudo Hojin), you must apply to the Tokyo Metropolitan Government.
Requirements: You need a minimum of 10 members, 3 directors, and 1 auditor.
Key Documents: You must draft the Articles of Incorporation (Teikan), a 2-year business plan, an activity budget, and sworn statements for all officers.
Timeline: The review process typically takes 3 to 5 months, including a mandatory public inspection period.
Cost: Unlike regular companies, NPO registration itself is free of registration tax, but the paperwork is extensive.

2. Attracting Donations (Certified "Nintei" Status)
A standard NPO Corporation does not automatically allow donors to claim tax deductions. To "attract donations" effectively, you must apply for Certified NPO (Nintei NPO) status.

The Hurdle: You must pass the "Public Support Test" (PST), which generally requires showing you have already received support from at least 100 people (donating roughly ¥3,000 each).

Strategy: Most organizations start as a regular NPO and apply for "Provisional Certification" to bridge this gap.

3. Ongoing Reporting Obligations
To maintain your status, you are strictly required to submit an Annual Business Report, balance sheet, and asset inventory to the Tokyo government within three months of your fiscal year-end. Failure to report can lead to revocation of your status.

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