Must the Director of a Canadian Non-Profit be a Canadian Resident?

Canadian non-profit organizations have the flexibility to have directors who reside outside of Canada. This means that the director of a Canadian non-profit does not necessarily have to be a Canadian resident. 

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However, the Income Tax Act requires that a registered charity must reside in Canada. This means that any corporation incorporated in Canada, whether it is charitable or not, is considered as residing in Canada. It is important to note that the Canada Not-for-Profit Corporations Act and the Ontario Corporations Act do not have any specific requirements for directors to be residents of Canada. 

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While Canadian non-profit organizations may have all directors who are non-residents of Canada, they must take into consideration the requirements for charitable status. Charities must prove that they can maintain control over their foreign operations. If most of the directors are not Canadian residents, it can be difficult to prove that the charity is maintaining control. It is important to note that the aforementioned rule does not apply to trusts and unincorporated associations. 

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If you want to establish a trust in Canada, the majority of trustees must be Canadian residents. The Canada Revenue Agency provides guidance on these matters in their Registered Charity Newsletter No.20. Non-profit organizations seeking to establish a presence in Canada should consult with the relevant governing bodies to ensure compliance with all applicable laws and regulations. 

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In summary, Canadian non-profit organizations are free to have directors who reside outside of Canada. However, when applying for charitable status, it is important to consider the requirements for maintaining control over foreign operations. If you are seeking to establish a trust in Canada, the majority of trustees must be Canadian residents.

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