Are considering setting up a non-profit organization in the United States even though you don’t live or work in the US? In this article, we consider the legal requirements for setting up your non-profit organization in the United States.
DO I NEED TO BE A US CITIZEN TO CREATE AN NGO IN THE UNITED STATES?
The answer is no. You do not need to be a US citizen to start an NGO. More so, the process for incorporating a non-profit for a US citizen is similar to the process for incorporating that of a non-US citizen or non-US resident.
WHAT MAKES UP AN NGO
Generally speaking, non-profits are established with the primary aim of promoting a cause without making a profit. Such causes could be social, cultural, religious, scientific, testing for public safety, etc.
In the United States, “think tanks” are qualified as non-profit organizations. Think tanks are primarily organizations involved in providing research services.
REQUIREMENTS FOR NGO REGISTRATION AS A FOREIGNER
The following are the required information needed to set up your non-profit organization in the United States;
i. Proposed name(s) of the entity
ii. Choice of State you wish to incorporate your NGO
iii. Names of members of the organization (the minimum number of members varies from State to State)
iv. The business purpose of the NGO
v. Address of the NGO
WHAT NEXT AFTER SETTING UP MY US NGO?
1. Apply for tax-exempt status for your NGO
Since an NGO is primarily not formed for the purpose of making a profit, most NGOs are exempted from paying income taxes at either the Federal or State level. To receive an exemption from paying income tax to the US Federal Government, such an organization must apply to the Internal Revenue Service (IRS) for a tax exemption status.
Under the IRS code, the following organizations qualify as tax-exempt; Charitable organizations, churches and religious organizations, private foundations, and political organizations organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function such as; social welfare organizations, civic leagues, social clubs, labor organizations and business leagues.
In general, NGOs organized exclusively for educational, religious, charitable, and scientific testing for public safety, literary purposes, and certain sports, that are non-profit and do not play a partisan political role (e.g., by supporting candidates for election or attempting to influence legislation), can apply to receive an exemption from federal income taxation on all income related to these purposes.
Though tax-exempt, non-profit organizations are required by the government to file returns with the government on a regular basis. Information to be provided in such tax returns includes; the source of funds, activities, and key members/leaders of the organization.
2. Obtain a relevant license in the State you wish to operate in
Another step to consider after filing for incorporation and obtaining a tax exemption status or a Form 501c is to apply for an operating license in the State where you wish to carry out the physical operation.
CONCLUSION
There are no restrictions for foreigners or non-US residents when it comes to forming a non-profit organization in the United States. In addition, the requirements for setting up a US non-profit are not different from those of US citizens. However, it is important you understand your organization’s compliance obligations after registration.
Need help with setting up your US non-profit organization? Feel free to reach out to us through the Whatsapp icon on the lower right part of the page or HERE and we will attend to you.
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