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
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.