Starting and registering a non-profit association

1. Decide to start a non-profit association

To start a non-profit association, you must be a group of at least three people. You start by forming a temporary board and write a proposal for statutes. You in the group must decide on the statutes at the association's first member meeting, which is called a constituent meeting. At the meeting, the members elect a board and one or two auditors. After that, the association is formed.

Starting a non-profit association at the Swedish Tax Agency

Public benefit non-profit association

Public benefit activity means that the activity is something that society thinks is worth supporting. Examples of this can be charity, culture, sports, education or youth activities.
Public benefit non-profit associations are, unlike other non-profit associations, tax-exempt for partial income. The association must then fulfill the following four conditions to be of public benefit.

1. The association shall have a non-profit purpose
2. At least 90 percent of the association’s activities shall serve to satisfy the association’s non-profit purpose
3. At least 80 percent of the association’s income shall be used to fulfil the association’s non-profit purpose
4. The association shall be open to all who wish to become members

Conditions for qualifying as a non-profit association at the Swedish Tax Agency

2. Apply for a company registration number

When the association is formed, you can apply for an organization number at the Swedish Tax Agency. There is no requirement for a non-profit association to have an organization number. However, the association must have an organization number if, for example, you are going to open a bank account, rent premises, apply for grants, pay salaries or fees, or carry out assignments for companies and municipalities.

Starting a non-profit association at the Swedish Tax Agency

3. Register the association for F-tax, VAT and as employer

If the association runs a business or pays compensation, you may need to apply for F-tax or register the association for VAT or as an employer. You do this by filling out the paper form SKV 4620.

Business registration (SKV 4620) (Tax and fee notification) at the Swedish Tax Agency (in Swedish)

Apply for F-tax

You can apply for approval for F-tax if the association has business activities. The information on surplus that you enter in the application is the basis for how much preliminary tax the association must pay per month.

Approval for F-tax at the Swedish Tax Agency

Register the association for VAT

Those of you who run a non-profit association that has economic activities, for example producing and trading in goods and services, must add VAT to the price when you sell a good or service. You can also deduct the VAT you pay when you purchase goods and services for the business. An association that has a sale where the taxable base does not exceed SEK 120,000 during a tax year is exempt from VAT. This means that you do not need to register the association for VAT.

VAT rules for non-profit associations

If the association is a non-profit non-profit association and does not have to pay tax on the business's income, you must never add VAT to the price or deduct VAT on purchases for the business. However, the association may have to pay VAT on the purchase of goods and services from abroad.

VAT for non-profit associations at the Swedish Tax Agency (in Swedish)

Register the association as an employer

You must register the association as an employer if you pay compensation for salary, fees or give benefits to a person or a company that is not approved for F-tax. You only need to register the association as an employer if the compensation exceeds SEK 1,000 per person per year. If the association pays out compensation under SEK 1,000, you must instead report it on a control statement from employers, etc. (KU10).

Salary and remuneration at the Swedish Tax Agency (in Swedish)

Business and employers at the Swedish Tax Agency

The form KU10 – Control task from employer etc. at the Swedish Tax Agency (in Swedish)

4. Protect the association's name

If the association is to conduct business, you can choose to protect the association's name with the Swedish Companies Registration Office. You do not need to decide when you start the association, but can choose to protect the company name at a later stage. The association then gets protection for the name in the county in which it is registered.

The name of the association for a commercial non-profit association at the Swedish Companies Registration Office (in Swedish)

5. Check if you need a permit

It is important to find out if the activity requires a permit or some other form of notification to the authorities, municipality or other organisations. Special requirements can be placed on those who will run the business, or on the premises that will be used in the business.

Find permits

6. Check whether you need to report the beneficial owner

A beneficial owner is the person or persons who ultimately own or control a company or association. Most non-profit associations have more than three members and each member has one vote. Because you need to control more than 25 percent to be a beneficial owner, this usually means that there is no beneficial owner in a non-profit association.

About the beneficial owner of a non-profit association at the Swedish Companies Registration Office (in Swedish)