For a UW program to conduct on-going operations abroad, establishing legal status is generally a requirement to:
- Open a bank account
- Hire local nationals
- Lease space
Advantages of Legal Registration at a Foreign Site
For faculty (PIs) engaging in operations (i.e., research, training) at a foreign site on a multi-year basis, the following may be realized by registering as a legally recognized entity in-country.
Registration as a legal entity:
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Makes it possible to legally hire local citizens and doesn't put local citizens at risk for being improperly hired.
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Promotes the value of “doing the right thing” in resource-poor settings.
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Makes it possible to open a business bank account. This may reduce the need to carry large amounts of cash into the country because funds can be wired to a business bank account from the U.S.
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Allows vehicles to be registered in the name of the entity, not the individual.
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Makes it possible for the University of Washington to be the signatory on leased space.
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Facilitates Value Added Tax (VAT) recovery, if there is a mechanism in place in-country to reclaim it.
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Provides an avenue for obtaining work permits.
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Reduces the possibility of significant work disruption and monetary penalties from the local government for failure to be a recognized legal entity.
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Allows UW to enter into vendor contracts for supplies and service of equipment that, in most instances, can lead to better rates and terms.
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Offers a legal framework that could allow for expanded opportunities.
Registration helps avoid a number of adverse consequences:
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By having a business bank account, a bank will not be reporting an individual's name to a governmental ministry as a holder of an account that receives funds from a foreign source, if such a reporting requirement exists.
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Some foreign-based vendors are not willing to take a personal check from a foreign account.
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By having the UW as signer on a lease, an individual may avoid having to pay a substantial security deposit (e.g., one or two years of rent). It may also avoid personal liability for any accident or injury that occurs on leased property.
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Being registered reduces liability to the UW by avoiding risks to the University’s reputation for not complying with local business regulations.
The UW Attorney General's Office manages 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 the program seeking legal registration is responsible for the cost of in-country counsel consultation. This process can be lengthy and so advance planning is required in order to operate legally in foreign locations.