Shifting the Compliance Landscape for Non-Profit Companies in Palestine: An Analysis of the 2025 Amendments
Non-Profit Companies in Palestine (NPCs) represent a unique and increasingly influential segment of Palestinian civil society. By law, NPCs are private shareholding companies that operate for a public-benefit purpose. NPCs may own movable and immovable property, receive grants and donations, and establish income-generating projects, provided that all resources are used solely to advance the goals for which they were created. Today, 318 NPCs are registered in Palestine, representing roughly 8% of the broader non-profit sector. In 2025, NPCs in Palestine secured approximately $135 million, a 170% increase from 2024, according to the Ministry of National Economy.
As NPC influence and role expands, so do expectations around transparency, accountability, and regulatory alignment. On November 27, 2025, Bylaw No. (14) of 2025 was published in the official gazette and has taken effect on December 28th, 2025. The Bylaw, which amends the Non-Profit Companies Bylaw No. (20) of 2022, introduces a number of significant compliance updates for the sector. This article unpacks key amendments and outlines what they mean for non-profit companies in Palestine.
A Brief Legal Evolution
The regulatory framework for Non-Profit Companies in Palestine has progressively developed over the past 15 years:
- 2010 NPC Bylaw No. (3): the first attempt to formally regulate non-profit companies
- 2015 & 2020 amendments: introduced prior-approval requirements for funding and incorporated anti-money laundering (AML) and counter-terrorism financing (CTF) obligations
- 2021 Palestinian Companies Law: replaced the older Jordanian regime and provided a modern legal basis for NPC formation under Article (29)
- 2022 Bylaw No. (20): a thorough governance and compliance framework for NPCs
- 2025 Bylaw No. (14): sharper compliance tools, digitally-aligned oversight, and alignment with NPC realities
Palestinian CSOs had formerly raised several critiques of earlier versions of the bylaw, pointing to issues such as inconsistent approval processes, delays in funding disbursement, and a mismatch between regulatory intent and the practical realities of operational and financial management for NPC on the ground. Many CSO and NPC concerns were taken into account in the drafting of the amended bylaw. In fact, toward the end of 2024, the government engaged CSO and NPC representatives in a joint committee to provide recommendations for the 2025 amendments.
Headline Changes & What They Mean
Digital Fundraising for NPCs
The most notable development is the formal regulation of electronic donations for NPC`s specifically, which have significantly increased over the last few years. The Bylaw introduces the following provisions:
- Article 8: Under Article 8, NPCs must obtain prior written authorization from the Registrar before launching any digital fundraising efforts, whether initiated locally or internationally.
- Article 9: To qualify for a permit, an NPC must demonstrate that it is in good legal standing, including proper registration status, compliance with reporting obligations, and no outstanding violations.
- Article 10 : The non-profit company must submit a permit application to the Registrar using the form approved by the Ministry at least 30 days before the date scheduled to collect electronic donations. The application must be accompanied by a certified copy of the NPC board approval, and must also include a company letter stating the bank account number dedicated to donations and the bank’s details.
- Article 11: Once granted, the fundraising permit remains valid for six months, with one possible extension of up to three months, subject to renewed board approval and justification.
- Article 12: Public promotion of fundraising campaigns must be conducted via specified channels (such as Local Telecoms, Banners, Local news outlets, and Social media) and must be consistent with the NPC’s purpose.
- Article 13: Obligates banks to issue electronic donation receipts containing specific donor and transaction details.
- Article 14: NPCs must record all activity related to the campaign in their registers and include it in their financial reporting, while the bank monitors spending against purpose.
- Article 15: Empowers the Registrar to issue a corrective notice (allowing up to seven days for remedy), or suspend the permit.
Funding Approval Threshold
The amendment raises the annual threshold that requires prior approval for grants or financial sources from USD 100,000 to USD 500,000. Smaller and mid-sized organizations, the majority of NPCs, will experience fewer administrative delays, while substantial inflows continue to receive enhanced review. (Article 7(5))
Governance Structures for Non-Profit Companies in Palestine
The 2025 amendments recalibrate how non-profit companies structure governance, compensation, and asset ownership and introduce greater clarity while maintaining firm safeguards against profit distribution. Article 9(1)(a) now extends the prohibition on direct interests in implementing for-profit companies to relatives up to the third degree.
Under Article 5(2), the 25% spending cap now applies to salaries only, rather than all operating expenses. Conflict-of-interest rules have also been refined. Additionally, Article 16 permits a once-per-year exemption covering recurring monthly operating costs. Importantly, the amendments explicitly affirm the right of NPCs to own movable and immovable assets under Article 12(4). This eliminates any ambiguity around asset holding as a tool for achieving organisational objectives.
Another important change introduced by the 2025 amendments explicitly under article 4(2) is the removal of the previous By law under article 9(1) (B) placing a prohibition on shareholders from receiving salaries, bonuses, or other remuneration from non-profit companies. As a result, shareholders may now be compensated for actual employment or services rendered to the company, subject to governance approval and applicable salary caps. This flexibility does not alter the bylaw’s core principle. Article 3 continues to strictly prohibit the distribution of profits or dividends, directly or indirectly, to shareholders. Any compensation must therefore reflect genuine work performed and cannot serve as a mechanism for profit distribution.
Updates to Reporting
Reporting has shifted from quarterly submissions to a bi-annual schedule, under Article 3(3), unless the nature of funding demands more frequent reporting. Additionally, NPCs must now include an impact statement alongside their annual filings, per Article 5(4). Where reports are not submitted, Article 3(7) authorizes the Registrar to halt transactions until compliance is met.
Expanded Registrar Powers
The amendment strengthens oversight and grants the Registrar more proactive enforcement tools, including warnings and mandated corrective actions, freezing or suspending permissions, especially for digital fundraising, as well as more structured coordination with banks and other authorities.
Where Kurdi & Co. Comes In
Bylaw No. (14) of 2025 builds guardrails that garner both opportunity and responsibility. Kurdi & Co. provides broad-range legal support including:
- Expertise in navigating the new regulatory landscape for NPCs.
- Assistance in updating bylaws, drafting compliance plans, and handling reporting requirements.
- Support to NPCs in obtaining necessary approvals for electronic fundraising and large-scale donations.
- Legal review of funding agreements and digital campaigns.
- Legal consultations to mitigate risks and ensure smooth adaptation to 2025 amendments.
Our team works closely with local and international clients to navigate regulatory changes with confidence and clarity. To discuss how these amendments impact your NPC, connect with Kurdi & Co.
This Article was researched and written on January 10th, 2025 by Samer Kurdi.