Foreign Legal Presence and Entities
Programs or projects that intend to operate in a foreign country are subject to the host country’s legal statutes and regulations. The regulatory environment abroad is complex and ever-changing, and no two countries are the same.
A strategy that worked five years ago may not meet today’s requirements. Global Operations staff work with departments setting up projects, programs, or other activities and advise on factors to consider, including special licenses and taxes. These in-house consulting services are available to the Cornell community free of charge.
Before budgeting for a project planning to operate abroad, email Global Operations. We can help you find answers to key questions about taxation, human resources, banking, risk, safety, insurance, compliance, and more.
Cornell may need to obtain special licenses, registrations, or other permissions to conduct the proposed activities in the host country. Rules can vary depending on the activity type and duration.
Some of the common types of activities that may require special permissions include:
- Opening a Cornell bank account in the host country
- Hiring expatriates, local or third-country nationals to work in the host country
- Utilizing the services of independent contractors
- Leasing office or lab space or owning land or other real property in the host country
- Purchasing equipment or motor vehicles in the host country
- Providing in-person or virtual consulting services in the host country
- Teaching Cornell credit-bearing courses outside the U.S.
- Delivering online (credit- or non-credit bearing) education to residents of the host country
- Generating income from foreign sources
- Operating in-country on a long-term basis
Although Cornell is a tax-exempt organization in the United States, foreign-earned income may be subject to taxation by foreign governments. Conducting host country legal and tax due diligence when budgeting for a project is required. Projects may incur unexpected costs, penalties, and legal fees without proper planning.
Standalone Legal Entity
Registering a standalone legal entity may be needed at times. Determining whether and how to register the university in a foreign country is a legal and often strategic decision. If compelling legal or business reasons justify creating a separate corporation, the university will establish legal entities abroad to operate as separate subsidiaries or standalone affiliates.
The university will only register if doing so is necessary to comply with foreign country laws and regulations, and more expedient—but equally as compliant—alternatives are not available. Approval to establish a foreign legal entity is required from the Cornell University Board of Trustees (Cornell University Policy 4.11).
Only Cornell’s Office of General Counsel may retain external, country-specific legal counsel. Global Operations—in cooperation with Cornell’s tax office—maintains relationships with international tax advisors. Note that the program seeking legal registration is responsible for the cost of in-country counsel and tax consultation. This process can be lengthy, and so allow plenty of time and begin early.
Please contact Global Operations for consulting services.