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International expansion is an exciting, but hectic, time for any business. As you extend your global footprint, you’ll encounter a new landscape of opportunities and challenges – not least the need to manage your internationally-mobile employee population. While you may be primarily focused on delivering the best possible core products and services to your new customer base, it’s vital that you don’t neglect the needs of your employees on the ground in what is likely an unfamiliar environment.
If you’re readying for an international expansion, you’ll need a plan in mind to make sure your mobilised employees can deliver the level of performance you need from them in their new location. With that in mind, check out this list of global mobility tips to help your employees succeed….
It goes without saying that you’ll have a road-map in place for your business’ international expansion, but it’s also worth making a detailed plan to oversee the mobilisation of your employee population – from domestic to global. This means thinking about specifics: what are your mobility needs? How many employees do you need to send overseas?
In some cases, your employees may need to be assigned overseas only for weeks or months – in other cases they may need to be permanently relocated in the long-term. Whatever the details, you’ll need to ensure your business’ administrative infrastructure is prepared to handle the burden of global mobility.
When you move employees overseas, you’ll be thinking specifically about the skills they will be bringing to your expansion project. While employee skills and abilities are clearly crucial to any mobility decisions you make, you should also be thinking about the suitability of your employees to the idea of mobility. Any type of ‘international’ skill is obviously valuable in this respect: languages, international payroll, law, accounting, and so on.
Try to align employee talent to your global needs: who will deliver and derive value from an international assignment – and how might the assignment benefit the employee?
Whenever you set up in a new location, you’ll need to think about the legislative environment in which your business will be operating. This is a crucial step since legislation will define both your overseas presence, and your employees’ professional lives, in certain important ways:
Your business’ legal structure in its new location (Sole Proprietorship, Limited Liability Company, Limited Partnership, etc.), will affect the way it is taxed – and may also affect the way its employees are taxed.
The legislative environment of your expansion location, and your business’ legal structure, may also affect what type of work your employees can perform, or how long they can stay in the country.
Sending employees across borders means dealing with a variety of immigration challenges – from official administrative issues, to more practical concerns, like paying fees. Make sure your mobility plan factors in the time and cost of special considerations such as:
– Collating relevant immigration documentation such as copies of passports, photographic identification, employment contracts and letters of sponsorship.
– Arranging interviews with immigration authorities, if necessary.
– Performing background medical and financial checks.
– Applying for work and residence permits.
– Paying all associated fees to the relevant authorities.
Don’t neglect the practical challenge of moving your employees overseas. Think carefully about how you will handle the logistics of the task – road, rail, sea or air? The number of employees you are mobilising and the frequency of their overseas travel will significantly affect your travel budget and strategy.
Bear in mind some overseas employees may need to bring their family to the overseas location with them, or may need to move personal items.
Physically moving employees overseas is only part of the logistical challenge – you’ll likely also need to make sure their accommodation and welfare needs are met in their new location. Practically, this means deciding whether you’ll house employees in accommodation you provide, or look for private accommodation. A variety of peripheral factors are important, such as access to schools and other amenities, and the distance from your employees’ workplace.
Day-to-day needs, and general employee welfare overseas should also be a consideration: are there any particular risks associated with the expansion location? Do you employees need subsistence or living allowances? Do they need private vehicles, or local public transport?
Creating a global solution for payroll and tax in your expansion location should be a high priority – it’s not only a prerequisite for achieving regulatory compliance, but for making sure your employees remain happy overseas. Payroll is already a complex administrative process, but on an international scale the challenge is greater:
You’ll need to develop compensation packages which work with the tax landscape of your overseas location – including deciding which currency your employees should be paid in.
Look for local tax incentives or mechanisms in your new location which might benefit your employees.
Be aware of residency rules pertaining to tax treatment: resident-status employees (those spending more than 6 months in an overseas location) will be taxed on all worldwide income, while non-residents will only be taxed on income earned in their overseas location.
Remember, your employees will need time to adjust to their new surroundings – but there are plenty of ways employers can help them do so, including offering language lessons, cultural training sessions, and access to local amenities, such as shops and sporting facilities.
If children have been moved over with your mobilised employees, make sure educational and recreational options are available. Many overseas locations host international schools, and it may be worth offering employees some sort of stipend which they can put towards their children’s education.
Graham McKechnie holds over two decades’ professional experience in the public and private sectors – with roles at PWC, Deloitte, HMRC, and the Royal Bank of Scotland. Today, Graham is Global Tax Director at activpayroll, and works with employee populations around the world to deliver global mobility and global payroll solutions, and provide insight and advice on a range of international tax compliance concerns.