Global Operations & Engagement
Penn State has resources and guidance for establishing a project, presence or operation abroad. Significant pre-planning is necessary for any engagement overseas on behalf of Penn State.
Getting Established Abroad
Longer-term field operations abroad may require researchers or an academic unit to make certain arrangements locally, such as opening a bank account, hiring local nationals or leasing space. Various options are available to establish operations abroad, depending on the country and the particular activities concerned:
- Work through an in-country partner
- Retain a third-party provider that can provide the services
- Establish a Penn State entity in-country that can comply with applicable laws and accommodate payroll services
For the vast majority of cases, working through an in-country partner is the preferred option. Such partners are usually in a position to hire and pay local employees in accordance with local laws and reporting structures. These partners can invoice the University for the cost of the service provided by the partner and better ensure compliance with local employment and tax law.
Options two and three can be expensive, very complicated and time-consuming and should be factored into the planning process. The cost of providing these services is the responsibility of the researcher or academic unit (for educational programs) and must be included in the program budget. In general, establishing legal entities abroad is discouraged and should only be considered when no local partner or consultant can be found.
Prior to agreeing to any project that may require establishing operations abroad, permission must be obtained from the Controller’s Office as well as the Office of General Counsel, and a funding model must be submitted with the request.
Legal Representation Abroad
The University may provide legal representation to an employee who is acting in his/her capacity as an employee, within the scope of his/her employment, in a legal manner.
For questions or more information, please contact the Office of General Counsel.
Procurement, Leasing, & Renting Abroad
The procurement of goods and services and the leasing and renting of space in foreign destinations will require special processes and approvals. There are several considerations that must be accounted for early on in the planning process including local zoning laws, building codes, property taxes and insurance requirements. Review your transactional needs carefully in advance and discuss plans with your financial officer to initiate the process to have leases and purchases approved according to University policy and procedures. For more information, consult with the academic unit or department financial officer or Penn State Purchasing.
Foreign Bank Accounts & Transfers
Several options are available to Penn State employees for accessing funds and paying for goods and services while overseas.
Some of the financial considerations include establishing foreign bank accounts, managing collection and disbursement of funds as well as purchasing. It is recommended that you begin financial planning at least 3 months and ideally 6 months prior to when the endeavor is to begin. If you are planning for a more remote geographic location, it is more than likely you will need a minimum of 6 months to adequately prepare for financial contingencies.
Employees should contact their Financial Officer as early as possible when planning an extended overseas trip to explore which options will work best for them and give adequate time for the arrangements to be made. Information and resources are also available from the Controller's Office.
Employment & Hiring Abroad
Employing non-U.S. citizens in other countries can involve complex requirements and unexpected consequences. Whether the project requires an employee to perform research assistance, educational instruction, or simply casual labor, in most countries you will have to comply with specific tax and labor laws. Compliance with local taxation and reporting procedures, in addition to providing payroll services, is complicated and often requires a significant local infrastructure.
Work carried out overseas can present a range of concerns and issues from tax and compensations issues to safety concerns. Lack of planning and consultation can result in tax penalties and fines as well as other avoidable costs. Any hiring of staff abroad should be cleared through specific offices prior to such employment so that appropriate protections are in place. In addition, long-term contractor arrangements should be reviewed by the University’s Director of Payroll and Tax Services to ensure that individuals employed in such capacities would not be classified as employees of the University.
Prior to agreeing to any project that may require establishing operations abroad, permission must be obtained from the Controller’s Office as well as the Office of General Counsel, and a funding model must be submitted with the request.
