What Are the Rules on Corporate Hospitality?

Corporate hospitality has long been a part of doing business. It can be an effective way to build relationships, celebrate a significant deal or simply show your appreciation to a valued client. However, it’s important to understand the rules governing corporate hospitality.

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The Law on Corporate Hospitality

The UK Bribery Act 2010 contains provisions on corporate hospitality. The purpose of these rules is to stamp out corruption and bribery. As guidance from the Serious Fraud Office (SFO) notes, ‘bribes are sometimes disguised as legitimate business expenditure’. The rules don’t prohibit businesses from entertaining a client or purchasing a corporate gift, but they do make it quite a grey area.

The SFO has powers to prosecute individual managers and directors for breaches of the rules, with an unlimited fine and a prison sentence of up to 10 years among the penalties if a conviction is secured. If your business is regulated by the Financial Conduct Authority (FCA), it’s even more important to comply with the law. The FCA can impose fines and ban individuals if they are believed to have promoted a certain financial product after enjoying a client’s hospitality.

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How to Comply with the Rules

As a result of the rules, you need to carefully consider how you entertain your clients and the type of corporate gifts you send, especially if you’re a smaller business. You also need to think about the timing of the event or gift, such as during a tendering process or when trying to land a new client. For example, booking a suite at Ermanno Palace with https://edgeglobalevents.com/f1-hospitality/monaco/3rd-floor-ermanno-palace/ and whisking a client away for a luxury Formula One weekend in Monaco might be acceptable for a larger company if you’ve just struck a lucrative business deal. However, for a smaller business, you might consider sending a small gift instead or taking them out for dinner. Always ask yourself whether the hospitality you offer a client could be misinterpreted as a bribe, and consider setting a realistic budget for entertaining clients.

Overall, the key words when it comes complying with the rules on corporate hospitality are ‘proportionality’ and ‘appropriateness’. Make sure that everyone in the organisation is aware of the rules, understands what is acceptable when it comes to client relations and adheres to company policy.

About the author


Kim Lee lives in Tampa, Florida and focuses on living an intentionally happy life, helping others live better, and having a whole lot of fun. She loves to write, read, enjoy the outdoors, and play with dogs. At this moment, I am working with depression and anxiety; here is my blogs how to recover from anxiety and how to fight with anxiety. I hope everyone will like my blogs.

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