Unlocking global charitable impact from the Middle East

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International operation can be a challenging prospect for charities, and choosing the right establishment jurisdiction is of key importance.  In this article, Hugo Walford explores the benefits of considering a UK charity as a driver for philanthropic impact for those in the Middle East.   

Most jurisdictions in the Middle East impose controls and limits on international grant-making by domestic charities.  The default position is that they must apply their funds within their 'home' jurisdiction.  For example, philanthropic organisations in Saudi Arabia are subject to strict requirements and government approval for any proposed donations to organisations outside Saudi Arabia, which are ineligible for tax benefits if made.  Similarly, in the UAE donations out of the state by charities are restricted and controlled by an executive regulation, which also restricts the banks that would process the cross-border donations.    

This can present challenges for those who want to set up charitable foundations working across borders with the potential for impact on a global scale or an internationally recognisable brand.

One solution to these challenges for individuals or organisations based in the Middle East is the establishment of a UK charity, either on its own, or as part of a cross-border structure with connections to other charitable organisations (in the Middle East, for example).  

Firstly, charity law in the UK does not restrict where you can operate (although like many countries, sanctions can mean that certain activities are restricted).  Provided charities adhere to the UK tax authority's guidance on making overseas payments, UK charities are free to apply their funds anywhere in the world.  For example, a UK charity could be established to advance education in Oman.

Secondly, the UK – alongside the US – is one of the most recognised, respected and popular jurisdictions for charitable and philanthropic establishments.  Being a registered charity in the UK provides a high degree of security and credibility for donors all around the world; this is often of real assistance for charitable fundraising and for raising a charity's profile and credentials as a truly international player.

Moreover, donations to UK charities can be made in a compatible way for Zakat.  For example, a number of large Islamic charities established in the UK have created a general Zakat fund and adopted a Zakat policy, detailing how Zakat donations are to be distributed in accordance with Sharia law.  Donors can give to such charities not just from within the UK, but also from other countries, as a means of fulfilling their Zakat obligations.  

Withers are international charity law experts, specialising in supporting clients with charitable endeavours on a global scale.  We have helped establish and advise some of the world's largest charities, and we provide advice regularly on cross-border structures (where charities have a principal presence in one jurisdiction, and a series of affiliated or subsidiary charities and not-for-profits in others).  If you are an individual or organisation based in the Middle East and are interested in global charitable impact, we are here to assist you in considering how best to structure your operations and whether establishing a UK charity may enhance your ability to achieve your mission. 

If you have any questions in regards to this article, please get in touch with Hugo Walford or your usual Withers contact.