Shifting the Compliance Landscape for Non-Profit Companies in Palestine: An Analysis of the 2025 Amendments

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.