I realized I posted an error in the perl code above. I corrected that (Just had some inconsistent string names when I simplified the example.) I will try and clarify my question.

The output of the perl print statement is what I expect. The print command is correctly displayed in the uft8 encoding, however the encoded string is not encoded when it is passed through the system command to the C# application on windows. I'll try and post what I'm seeing.

Output of perl program.
>perl test.pl
>Sent Ħis. Ŧ good
>Received Ħis. Ŧ good

Output of C# application when run by itself with the same encoded string argument that the perl program should pass to it.
>Example.exe Ħis. Ŧ good
>Received Ħis. Ŧ good

By itself the C# program does display a utf8 encoded string if passed to it from the windows command prompt. On a linux system the perl script does work and the C# application receives the utf8 encoded string from the perl system() call.

If I run the perl script on linux I get this output which is what I want.
>perl test.pl
>Sent Ħis. Ŧ good
>Received Ħis. Ŧ good