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Establishing Legal Status Abroad

Register or not?

There are two levels of considerations that influence a decision whether a university should establish legal presence in the host country. Projects will need to be evaluated on a case by case basis depending on the project scope and the following two considerations.

  1. The length of the program.
  2. Whether the project crossed over to “doing business” in the  host country. Note that the “doing business” threshold is different for every country and would require review by a legal counsel of the host country. Contact your campus counsel to learn more.

Why Register?

For faculty (PIs) engaging in operations (i.e., research, training) at a foreign site on a multi-year basis, registering as a legally recognized entity in-country:

  • Makes it possible to legally hire local citizens and doesn't put local citizens at risk for being improperly hired.
  • In resource-poor settings helps with sustainable capacity building.
  • Makes it possible to open a business bank account so that the project funds can be wired to a business bank account from the U.S. instead of carrying large amounts of cash into the country.
  • Allows vehicles to be registered in the name of the entity, not the individual.
  • Makes it possible for the UC to be the signatory on leased space.
  • Facilitates Value Added Tax (VAT) recovery, if there is a mechanism in place in-country to reclaim it.
  • Provides an avenue for obtaining work permits.
  • Reduces the possibility of significant work disruption and monetary penalties from the local government for failure to be a recognized legal entity.
  • Allows UC to enter into vendor contracts for supplies and service of equipment that, in most instances, can lead to better rates and terms.
  • Offers a legal framework that could allow for expanded opportunities.

Consult UC Policy with campus legal counsel and UCOP’s Office of General Counsel (OGC) regarding the process of legal registration at foreign sites. The office will work with in-country legal counsel it has identified to determine the best option for registration.

Note that in some countries registration is not always a formal process. In some countries, the registration process is slow and may take up to a year or more to complete the process.

For additional resources, visit the NACUBO International Resource Center.

Last updated: 7 Dec 2016