UK: UK Charities Working Abroad – Establishing A Presence In Foreign Jurisdictions

Last Updated: 8 December 2010
Article by Jonathan Brinsden

Non-EU charitable ventures looking to further aspects of their work and fundraising within the EU will often seek to establish themselves in the UK due to the protection and financial benefits afforded by the robust structure of the UK's charity legislation. Such benefits are all very well when working within these shores, but for many organisations, the bulk of their charitable operations are undertaken overseas, particularly in the developing world, and funds raised in the UK are diverted abroad accordingly. These charities need to weigh up how they can best deliver their objectives abroad whilst remaining compliant with British legislation.

Limitation of risk

The key principle for UK based charities working internationally is that they should be in a position to manage the increased exposure to risk that arises from operating in jurisdictions different from their own. This is particularly the case in developing countries which may be perceived to be more deserving of charitable aid, but may not necessarily provide such sturdy legislative protection as in the UK. In the same way that charities working within the UK might ring-fence the risk inherent in trading and other commercial endeavours by setting up a wholly owned UK subsidiary to undertake that activity, the risks arising from operating in foreign territories may best be hived off by creating a new entity under that country's legislation to assume the liabilities (whether contractual, financial or otherwise) to which the UK based charity would otherwise be exposed. Where a charity's presence in a jurisdiction is intended to be long term or permanent, the charity may want to seek advice on whether it is feasible to establish a local subsidiary. In doing so, there are various factors which they may need to take into account, depending on the jurisdiction.

Bureaucracy and timing: Seemingly unnecessary bureaucracy is always frustrating, and while levels are more or less bearable in the UK, they can feel daunting in other jurisdictions. By way of example, a British company can start operating as soon as it is established, but before a company can commence trading in India, it must not only register with the companies regulator, but also seek an office space, establish a local bank account (into which the company's share values must be paid), secure a local trade licence, a shops and establishments certificate and a tax registration certificate. Each application must be dealt with separately and can require up to 15 separate forms, resolutions and/or proofs of identity etc. These layers of procedure mean that it can take some substantial time (up to and over a year in some places) before the local entity can start operating.

Knowledge of local customs/cultural differences: The bank adverts have a point - it helps to have on the ground knowledge of how business can be conducted in foreign territories. It should go without saying that local advice will need to be taken in establishing a presence there. What can be less obvious are the various means by which progress in a project might be facilitated. High powered contacts with influence in the right places can cut through months' worth of red tape with a simple phone call.

Bribery Act 2010: Notwithstanding the above, UK based charities should be wary of embracing all local customary practice. In some developing territories it is an accepted fact that business can only be made possible by greasing the palms of those with influence. This ought to raise alarm bells from a good governance perspective in any event, but the introduction of the Bribery Act 2010 (due to be implemented in April 2011) will make it an offence to bribe a foreign public official. Unlike, for example, the US equivalent legislation (the Foreign Corrupt Practices Act), the Bribery Act does not contain a specific exemption for facilitation payments, nor is there any specific defence for this offence. It also remains unclear whether the UK charity may be itself liable under the Act if someone "associated with" it commits an offence under the Act, including bribing a foreign public official. The Act provides a defence to such a charge if the accused organisation can show that it has adequate procedures in place to prevent bribery. Charities with operations overseas should, therefore, review their current practices and have clear policies in place to address how practical situations faced by those carrying out the charity's objectives should be addressed.

Direction of funding: Provided the entity is set up with the same objects as the parent charity and is demonstrably acting charitably from the perspective of UK law, there should be no hindrance to the UK based charity providing funding to the subsidiary to go towards its purposes. However, the burden of proof has shifted recently further to the Finance Act 2010. Charities used to have to show that they had taken objectively reasonable steps to ensure that funds applied abroad would be applied for charitable purposes. Now, the decision as to what is reasonable will be determined by HMRC at its discretion from time to time. Trustees should also be aware that, depending on the jurisdiction, it may not be so straightforward to send funds back to the UK.

Local limitations: As noted above, the benefit of establishing an entity abroad is that the risk involved in contracting with operators there will remain local to that territory, and the UK based charity should be protected from exposure to that risk. However, the local parties may nonetheless seek to tie the UK entity into their contractual arrangements, whether as guarantor or otherwise, seeing the parent body as a more secure source of funding. Such arrangements effectively negate the purpose of setting up a local entity, and trustees may need to consider what comfort they are able to give to the contractors that the subsidiary will remain in funds and secure from a contractual perspective, without risking unduly the assets of the UK charity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions