In the U.S., Stanford University has legal status as a trust with corporate powers, and is a tax-exempt educational institution under section 501(c)(3) of the Internal Revenue Code. "Exempt" corporate status does not necessarily have any meaning in a foreign country, and the University's individual schools, centers, departments and other operating units or programs normally cannot register on their own to conduct business in foreign countries because they are not considered to be legal entities in their own right. Registering the University as a legal entity abroad is a strategic decision that must be made centrally, with final approval in the President & Provost's Office. It should be noted that registering a legal entity abroad can take a significant amount of time.
Faculty / investigators should note that they are not, in general, authorized to execute agreements on behalf of the University. Such agreements should be reviewed and authorized by cognizant school or University officers (see Admin Guide 1.4.1: Academic and Business Relationships with Third Parties). The Office of General Counsel and the Global Business Director, should also be advised in advance of such proposed agreements so that University-wide issues may be addressed.
Partnering with a local institution is often a more practical and expedient alternative to corporate registration, particularly in the case of sponsored research or short term projects. The advantages of such partnerships can be numerous:
- Provides existing facilities for research, business or teaching;
- Coordinates the payment of local employees and processing of other transactions related to the project;
- May eliminate the need for the lengthy process of corporate registration;
- May reduce necessary administrative tasks such as local hiring, tax reporting and withholding, and licensing; and
- May provide a financial advantage for acquiring goods and services only available to local institutions.
In the absence of a local partnership, an exemption from registration may be possible through a sponsoring U.S. government agency, or where activities will be completed for a foreign government. The University will consider foreign corporate registration if there are compelling operational or strategic reasons to do so and more efficacious options are not available. If you believe your program might be facilitated by foreign corporate registration, submit a help request to Global Business Services.