Establishing Global Academic Programs or Projects
Duration and Scope of Activities
A number of issues can arise when conducting activities abroad, whether it be research, short trips, exchange programs, or study-away programs. The complexity of these issues often depends on the duration and scope of the international activities. Short-term programs may not require an ongoing presence in the country and often operate with a lower administrative burden and cost than a long-term program. Long-term presence in a country is more complex and costly and typically requires operating through a partner, registering the university to do business in that country, and/or setting up a local corporate entity.
Operating in a Foreign Country In Which NYU Already has a Presence
When NYU has an existing presence in a country, it may have registered its activities with local government agencies. NYU’s presence may be able to provide administrative and logistical support to your activities in that country. At the same time, there may be restrictions on the types of activities that NYU can legally undertake in that country. New activities can impact the existing activities in these countries and may have a significant financial impact on the existing activities if the new activities affect the tax or other legal status of NYU’s presence in the country. OGC can advise on what activities can be conducted in countries where NYU already has an existing presence.
- Whenever the proposed activities will take place in a country where NYU has an existing study away site, GPO should be consulted if the activity involves students. A list of sites is available on the Global Academic Centers page.
Legal Authorization to Operate in a Foreign Country
Legal authorization or registration with the local government may be required before “doing business” in a foreign country, depending on the type and extent of activities in which the program will be engaged. Activities such as (but not limited to) buying or leasing real estate, employing local staff, generating income, and opening a bank account may also trigger local registration requirements.
In some instances, it may be advisable to incorporate a separate legal entity to carry out the proposed activity. It may be possible for registration to be avoided by partnering with an existing local organization, contracting with local vendors, or limiting activities to those that do not require registration. In some circumstances, an agreement with the relevant host country agency or ministry (through a memorandum of understanding) can satisfy basic regulatory requirements.
Individual programs, departments and schools cannot register to do business on their own because they are not independent legal entities. If registration is necessary, this process may entail registering the University itself to do business in the country or registering a new legal entity in the country through which all business would be transacted. Partnering with an existing local organization can often avoid much of the difficulties of registration. In some cases, NYU may already have an existing entity or branch connected to a study away site that is registered and allowed to conduct the desired activity.
- The registration process, including the cost and timeline, varies based on the jurisdiction and the legal structure required for the activities. Major costs may include registration fees, local legal counsel, and local accounting services. Additionally, some jurisdictions may require certain insurance policies and/or a local bank account with working capital.
- Programs that will maintain an ongoing presence in a foreign country may be deemed to constitute a “permanent establishment.” A permanent establishment makes NYU (or its affiliated entities) essentially a corporate resident of the country for tax purposes. This can have significant financial consequences and often increases the logistical burden resulting from the activities and may require additional bookkeeping and local governmental filings. In some instances, there may be steps that can be taken before engaging in a foreign activity to avoid a permanent establishment.
Legal Authorization to Operate in a U.S. State other than New York State
NYU may need to obtain authorization to conduct (1) distance education courses and programs offered to residents of a particular state by an institution based in another state, and (2) various non-distance activities within a particular state by institutions outside of that state. This includes: non-classroom experiences, marketing/advertising/recruitment, proctoring, distance education, continuing education units (CEUs), and faculty residing outside of New York State. Please see the University’s Non-New York State Authorization and Distance Education page for more information on the authorization and internal approval process for these programs.
Depending upon the project or program contemplated, it may be possible to conduct the activity by working with a local organization. Working with a local partner organization (either an existing NYU partner already operating in the foreign country or a host-country organization) typically reduces the administrative burden (such as payroll, bank accounts, visas, office space, and retaining local vendors) for NYU and its faculty and staff. This arrangement should be memorialized in a written contract prepared or reviewed by OGC. Please contact Global Support at firstname.lastname@example.org if you need help identifying a partner institution.
Leasing space or purchasing real property outside of the U.S. will require approval by the Office of Finance and Budget. Significant real estate transactions may also require approval from the Executive Vice President for Finance and Information Technology and/or the NYU Board of Trustees. ERM should be made aware of any new spaces to ensure that those spaces are covered by insurance.
As soon as a property is identified, an inspection should be arranged so that NYU’s Fire and Life Safety Questionnaire can be completed and provided to the Global Fire and Life Safety Committee for its review and decision as to whether the University should move forward with the property.
- Find the Global Properties Life Safety Questionnaire on the Life Fire and Life Safety page.
In addition, OGC should be brought into the transaction as early as possible so that it can assist with negotiations and drafting. Once reviewed, all contracts, including leases, need to be signed by a designated NYU official. It is important to note that leasing space outside the U.S. may involve unfamiliar contractual provisions, such as tenancy or ownership rights, or the need to obtain bonds or letters of credit. Purchasing or leasing real property overseas also may trigger registration requirements or permanent establishment status which could result in tax liability or other legal consequences for NYU.
- To guide you in the process of leasing space abroad, OGC provides a suggested term sheet that should be completed and delivered to OGC prior to signing any commitment letter, negotiating a lease agreement or agreeing to lease any space.
Incidents occurring in buildings, offices, and residences (including hotel rooms) that are rented or controlled by NYU and frequented by students must be reported to Public Safety pursuant to the federal Clery Act's crime requirements.
- Please inform Public Safety of any new locations owned, leased, rented, or otherwise controlled by NYU so that Public Safety can properly account for all incidents in the University's Annual Security Report.
In some countries, proof of insurance is required before an entity can legally register and business can be conducted. Additionally, most countries' insurance requirements are governed by laws or regulations that establish what types of insurance are mandatory, and whether foreign insurance policies are acceptable or if "locally admitted" (from insurer's licensed in country) policies are required.
NYU maintains a global insurance program for all of its affiliated entities. For certain risks that are not covered by this program or for certain facilities located outside of the United States, NYU may obtain coverage for local policies in specific geographic areas or Difference in Conditions (DIC) insurance. Please contact ERM to ensure that NYU facilities, equipment and activities abroad are insured.