International charitable activities and the Charities Act 2005
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Introduction
The Charities Commission Board has confirmed its position regarding:
• New Zealand entities that conduct charitable activities overseas and wish to register under the Charities Act 2005 and
• overseas entities that wish to register under the Charities Act 2005 in New Zealand.
Background
The Charities Act 2005 does not specifically provide for a situation where an applicant carries out some, or all, of its charitable activities outside New Zealand. Nor does it provide for applications from entities that are established outside New Zealand – whether they are carrying out activities in New Zealand or elsewhere (we refer to these as ‘overseas entities’).
The key points outlined in this document are:
- Entities that are established in New Zealand (New Zealand entities) will not fail the charitable purpose test simply because they have an overseas purpose or the benefit is directed to a public overseas. An example is a New Zealand entity established with the purpose of relieving poverty in an overseas country.
- Entities that are established outside New Zealand (overseas entities) that wish to be eligible for registration under the Charities Act must have a ‘very strong’ connection to New Zealand and we must be able to exercise our monitoring and enforcement functions in relation to them.
All applications for registration under the Charities Act are considered on a case-by-case basis.
The Charities Commission Board has developed a position regarding New Zealand entities that conduct charitable activities overseas and overseas entities.
It adopted this position following careful consideration of the Charities Act, submissions from the charitable sector and other interested parties. It also considered relevant case law and experience as well as practice under similar legislation here and in other Commonwealth jurisdictions.
New Zealand entities carrying out activities overseas
Our publication Charitable Purpose summarises the charitable purpose test that we use to determine whether an organisation meets the requirements for registration. A New Zealand entity will not fail the charitable purpose test simply because it has an overseas purpose or the benefit is directed to a public outside New Zealand.
Overseas entities
We have concluded that the Charities Act is not intended to apply outside New Zealand. We have come to this conclusion because:
• it is generally accepted that laws do not apply outside the country they are made in (a legislative presumption against an extraterritorial effect)
• the Charities Act does not contain any provisions dealing with applications outside New Zealand
• there are difficulties with carrying out the purposes and
requirements of the Charities Act (for example monitoring and enforcement) in respect of overseas entities and
• case law supports the approach that the Charities Act is not intended, or appropriate, to apply to overseas entities.
On this basis, the Commission considers that entities are eligible for registration under the Charities Act if they are established in, or have a very strong connection to, New Zealand. In either case we must be able to exercise our monitoring and enforcement functions.
Factors we consider when registering overseas entities
We decide whether each entity is established in, or has a strong connection with New Zealand and whether the Commission is able to exercise its monitoring and enforcement functions.
To be established in New Zealand, entities that are incorporated bodies, that must be incorporated under New Zealand law. Examples include companies, incorporated societies and charitable trust boards incorporated under the Companies
Act 1993, the Incorporated Societies Act 1908, or the Charitable Trusts Act 1957.
However, entities do not have to be incorporated in New Zealand to be registered under the Charities Act.
In reviewing the connection an applicant has with New Zealand, we will consider:
• whether the organisation has a centre of administration in New Zealand
• how many of its officers are resident in New Zealand
• how much of the entity’s property is in New Zealand
• if the entity has any other strong connection with New Zealand.
Further information
For more information about the Charities Commission or registration under the Charities Act, please browse this website.
You can also call the Charities Commission on our free information line 0508 242 748.
To get updates by email, please send your name, organisation and contact details to info@charities.govt.nz.