University of Illinois System
Policies & Procedures

18.16 Implications of Conducting Business Outside the State of Illinois 

Note: This policy is intended for the purpose of informing all University of Illinois System employees about relevant tax issues. This policy does not constitute legal or tax advice. Individuals should consult with their attorneys or tax professionals for advice on personal issue.

Tax and Other Implications

In pursuit of fulfilling one of the University of Illinois System missions, units may propose to conduct business outside Illinois, including foreign countries. A proposal to conduct business, including hiring/moving employees or implementing a program or project, outside Illinois may generate legal issues and compliance requirements that must be addressed before moving forward. These issues and requirements may include:

  • Requirements to establish a legally recognized presence
  • Entity tax status
  • Registrations, licenses, or other permissions
  • Employment and independent contractor issues, including work permits, visas, employment contracts, telecommuting agreements, and employee rights and requirements to provide certain benefits or make retirement contributions
  • Payroll tax withholdings, remittance, and reporting
  • Cash management, banking, and limitation on repatriation of money
  • Foreign data privacy laws
  • Health and safety issues
  • Special local reporting requirements
  • Local contracting and signature authority (affects housing, transportation, etc.)
  • Procurement compliance

The system must abide by the laws applicable to the location where it is doing business. Noncompliance in these areas can trigger labor and employment issues, including liability for wrongful termination, personal data privacy violations, program suspensions or closures, tax liabilities, and monetary penalties and fines.

See Section 1.5 Conducting Business Outside the State of Illinois and Working Outside of Illinois Policy for additional information.

Last Updated: January 23, 2023 | Approved: Senior Associate Vice President for Business and Finance | Effective: February 2016