Is a UK registered charity permitted (legally) to have its HQ (if not its registered office) outside the UK, in another EU country, or even Switzerland? If so what are the implications (legal and financial)?
AnswerThis question raises some complex issues so a brief answer only is offered here. In broad terms, there is no reason why a charity’s HQ may not be in a jurisdiction other than England and Wales, whether Switzerland or elsewhere. There will be different considerations depending on whether the charity is constituted as a Trust or a company. With a Trust, the Charity Commission takes the view that English law requires the majority of trustees to be resident in this jurisdiction. It could be difficult, although not impossible, to have the HQ of a Trust outside England and Wales whilst the majority of trustees were resident here. With a charitable company it must have its registered office in this jurisdiction. However, the registered office is often only an official address for correspondence. It does not have to be the company’s HQ. There are no legal restrictions on the residency of company directors. If the HQ were to be overseas then consideration would need to be given to the establishment of a legal structure in that jurisdiction. Also, a review of that country’s charity law would be necessary which may not always be straightforward. As regards finance, the main consideration would be that money could be transferred from England if it was to be applied for charitable purposes recognised by English law. Her Majesty’s Revenue & Customs has recently indicated that it will be looking more closely at overseas payments by English charities. Finally, tax laws might be relevant to this situation. There is a move in the European Union to harmonise some tax laws relating to charities. Switzerland has recently signed up to a large number of treaties aligning itself with European laws so might be expected to follow suit if the EU does harmonise laws relating to charity tax or other issues.
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Charities Update Q&A 