A great way to start a wave of positive social impact in Pakistan is to establish a well-registered non-profit organization (NPO). The basic requirement for the registration is to acquire the Securities and Exchange Commission of Pakistan (SECP) and Federal Board of Revenue (FBR) registration, which is important from a legal perspective, credibility point of view, and tax exemption point of view. To help you through this, we’ve put together a step-by-step guide.
Step 1: The SECP – Foundation for NPO Legitimacy Registration
Your first step is getting your non-profit registered with the SECP. You have legal recognition, and your organization is seen to adhere to Pakistan’s regulatory framework. Registration with SECP gives the impression of public trust and opens doors to unlimited resources, which the company without registration would not enjoy. After that, you can register for tax exemptions and the license registration of the FBR.
Name Approval by SECP
Start by getting your organization’s name approved through the SECP online portal. A unique and approved name makes your NPO easy to identify from others.
Steps to Apply for Name Approval:
- Create an Account: The SECP e-portal is opened, and you log in with your SECP account.
- Submit the Application: Submit the application for name reservation and log in. The proposed company’s name must conform to SECPs, and it can’t have misleading descriptions.
- Attach Required Documents: You must also submit a copy of your CNIC and the contact details of at least one promoter.
- Pay the Fee: A name reservation fee is to be paid for this process.
Upon submission, SECP generally responds within 3-5 working days. Once approved, this name is reserved for your organization for a specific period, allowing you to proceed with the licensing process.
Step 2: SECP Licensing – Establishing Legal Identity
Once name approval has been granted, you need to apply for a license to operate as a non-profit under Section 42 of the Companies Act 2017. Licensing requires you to submit certain documents and pay a licensing fee.
SECP Documents Required for Licensing
The application for SECP licensing requires several supporting documents:
- Memorandum of Articles: This is to describe the Objectives & Operational Structure of your NPO.
- CNICs of Promoters: The national ID copies of all key promoters implemented.
- Profiles of Proposed Members: Member’s qualifications, professional CVs, and work experience.
- Business Address: The organization’s legal place of operation, obvious by a verified address.
Fee Application Submission
The fee of PKR 150,000 is paid to the SECP to obtain an SECP license as an NPO. This fee is paid online through the SECP portal when the application is filed. The application is submitted and subject to review by SECP, as needed. You should normally receive a response on licensing within two to three months.
Approval of License
SECP will issue a license to your NPO upon approval, after which you will officially have legal status to run an NPO in Pakistan. This license serves as a basis for your next step: company incorporation.
Step 3: Incorporation of the NPO as a Company
After the issuance of the SECP license, your NPO shall be incorporated with a company. This incorporation provides the organization’s legal standing and is a must for doing business financially.
Steps for Company Incorporation:
- Access SECP e-portal: You’ll want to log in to the SECP portal again under your new name, which you just licensed.
- Provide Necessary Details: Provide essential information such as organization objectives and board members information.
- Submit Incorporation Fee: According to SECP’s portal, the fee for incorporating may vary according to the organization’s objectives and structure.
After completion, SECP issues a certificate of incorporation that becomes the official entry into the nonprofit sector in Pakistan.
Step 4: Getting Registered with the FBR
Once your Non-Profit Organization (NPO) has been incorporated according to the Securities and Exchange Commission of Pakistan (SECP), it’s necessary to obtain tax-exempt status to guarantee growing sustainably and in a compliant way. This process involves several key steps:
The Federal Board of Revenue (FBR) will provide you with a National Tax Number (NTN)
Purpose: The NTN is the organization’s unique descriptor for all tax-related issues in Pakistan’s tax system.
Process:
- FBR registration of your NPO.
- Provide SECP incorporation certificate and details of the organization’s office bearers.
Become Certified at the Pakistan Centre for Philanthropy (PCP)
The FBR authorizes the PCP to evaluate and certify NPOs that are in compliance with standards of internal governance, financial management, and the manner in which they deliver their programs.
Steps:
- The necessary documents, which are audited financial statements and governance policies, are prepared.
- Apply with PCP for your certificate.
- To get certified, you have to undergo the assessment process.
Align your NPO objectives with SECP guidelines
According to the “Association with Charitable and Not for Profit Objects Regulations, 2018,” your NPO’s objectives must correspond with permissible purposes, including charitable, educational, and scientific ventures.
Ensure your organization’s objectives meet your expectations of the SECP guidelines. If necessary, change the Memorandum of Association.
Then apply for exemption from tax with the FBR
Application Package:
- PCP certification.
- An Objectives Memorandum of Association describing NPO’s objectives.
- Additional documents asked by the FBR.
Procedure:
- Once the application is ready, you can submit it to the FBR for review.
- Have to await approval to be granted tax-exempt status.
If you follow these steps carefully, your NPO will get tax-exempt status, which will help it work effectively and contribute to the good of Pakistan as per the procedure in Pakistan’s law.
Inclusion in the NPO Central Registry
Once approved, your NPO will be placed in the NPO’s central registry. This listing gives the impression of credibility and trustworthiness regarding your organization, making it easier to secure grants from the funding opportunities that pop up constantly.
In addition, complying with national regulations also means being part of the NPO’s central registry. With these detailed steps, you can easily register your NPO. Registration of Non-Profit Organizations in FBR allows for tax exemptions, public trust, and other benefits.
How Sidekick Can Assist in Your NPO Registration
Sidekick helps the entire NPO registration process with FBR. With an experienced team and professionals on our side, we provide personal guidance to prepare and file all documentation correctly. Sidekick also simplifies compliance by following the steps to meet regulatory requirements.
Working with Sidekick lets you focus on what you want to do while we take care of your technical component. You can book a free consultation call to start your non-profit organization with the FBR registration process.
Conclusion
Registering your non-profit organization with FBR has tax benefits, gives credibility, and allows you to get funding as an NPO. Sidekick’s experts guide you through registration and compliance so your organization can succeed seamlessly.
