HTML encoding foreign language characters

Dear community,

We are currently handling HTML files (exports from MadCap Lingo) for one of our clients.

After translation, the HTML encoding of special and foreign language characters ends up in the target file. For example "ä" for "ä". What is the correct setting to use  in order for the character itself and not the encoding to appear in the target? 

Thank you in advance for your help!

Anthoinette