STRC Research

Legal Structure for Cross-Border Rare Disease Foundation

2 min read

Legal Structure for Cross-Border Rare Disease Foundation

Deep research on optimal legal structure for MISHA Foundation. Full report: ~/DeepResearch/misha-foundation/2026-03-20-legal-structure-cross-border.md

Key Findings

Phase 1 (Immediate): Partner with a US fiscal sponsor (e.g., NORD, Global Genes, or a university-affiliated foundation)

  • Zero setup cost, operational within weeks
  • Tax-deductible donations for US donors immediately
  • Can fund US research (Holt Lab at Harvard/BCH)
  • No board requirement, no annual IRS filings
  • Fiscal sponsors take 5-10% administrative fee

Phase 2 (Year 2-3): Independent US 501(c)(3)

  • Formation cost: 275-600 (IRS Form 1023)
  • Timeline: 3-6 months for IRS determination
  • Requires minimum 3 board members (can include non-US residents)
  • Annual Form 990 filing required
  • Full control over grants, programs, messaging

Phase 3 (If needed): Add HK Section 88 entity for local fundraising

  • HK Section 88: 4-6 months, ~HKD 5,000-10,000
  • Only worthwhile if significant HK donor base develops

Why NOT Start with HK

  • US donors (vast majority of rare disease philanthropy) cannot claim tax deduction for HK charity donations
  • NIH/FDA ecosystem is US-centric, US 501(c)(3) status carries weight
  • Holt Lab is US-based, direct funding is simpler

Why NOT UK CIO

  • Additional complexity with no clear advantage
  • UK rare disease funding ecosystem smaller than US
  • GDPR compliance burden for patient data

Fiscal Sponsor Options Evaluated

  1. NORD (National Organization for Rare Disorders) - established, credible, 7% fee
  2. Global Genes / CZI Rare As One - startup-friendly, network access
  3. University fiscal sponsorship (Harvard/BCH) - highest credibility but slow bureaucracy
  4. Foundation for NIH (FNIH) - gold standard for NIH-adjacent work
  • Non-US citizens CAN form US 501(c)(3) (no citizenship requirement)
  • EIN (Employer Identification Number) needed, obtainable with ITIN or via agent
  • French passport holder in HK has no FATCA complications (not US person)
  • “Foundation” in name is legal in US without special registration (unlike some EU jurisdictions)
  • State incorporation recommended: Delaware (simplest) or Massachusetts (proximity to Holt Lab)

Connections

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