The global world of business is changing rapidly and more and more businesses are beginning to expand their operations overseas. Those of you who have already started this journey will be aware that sending employees overseas requires a lot of research due to the many pitfalls which could jeopardise your plans.
There are 6 important questions you should ask when you’re preparing to expand your business overseas. Knowing your answers and the action you need to take as a result will have a huge influence on the success or failure of your project.
1. Is your business at risk? Are you compliant?
Areas of potential risk:
– Home and Host country Tax
– Home and Host country Social Security
It is crucial that you are compliant as the penalties for getting it wrong are:
– Employee and family may be sent home if the Immigration papers are not correct
– Tax authorities around the Globe see Global workers as easy target for investigation, and “lucrative” revenue stream
– Fines and penalties
– Risk to corporate reputation externally in the market, and with employees internally
– Banned from operating in a Country
2. How are you going to pay them?
– Will they break tax residence in the home country?
– How are you going to pay them and where?
– Do you need a Permanent Establishment in the Host Country, or could you be creating one unwittingly?
– Do you have a policy framework, and consistent process to ensure that all employees moving overseas to work are treated equally?
– Each type of assignment, as above, may have different Tax, Social Security and Immigration issues
3. How much will it cost?
– Global workers/assignees typically cost the company 3 to 5 times more than hiring a local employee
4. Who is going and how do you select the person?
– What are the employee’s personal issues to take into consideration?
– Dual careers
– Ages of children and schooling
– Aging parents
– Health issues within the family
– Adaptability of the employee/family into a new culture
– Are there any Immigration issues – how long will it take to obtain the appropriate permits
5. What is the reason for the move?
– Specialist skills required in the host location
– Firefighting situation
– To train the local overseas employees
– Personal development/Talent Management
– Personal request
6. How long are they going for?
– Long term – 3 to 5 years
– Short term – 6 to 12 months
– Business Tripper
– Permanent Transfer
– Permanent Transfer with additional benefits