Expatriation to a remote destination: the keys to success.
It is not difficult to think of an expatriation to the capitals of Europe or America, you can even understand that today the Expats communities located in the large cities of Asia or the Middle East are so large. However, more and more multinational companies from different sectors are venturing to carry out projects in little-known destinations. Globalization opens the doors to new countries, new cities, new cultures and with it, new challenges to contemplate.
The mobility of workers is a process that requires proper management, because you have to take into account multiple factors of the reality of the destination country, capital and the human factor is not everything. It is vital to take into account factors such as the social, economic, legal, educational, socio-cultural context of the country that will host the workers.
Naturally many destinations do not offer the quality of life or the comforts that the expatriate would like to have, however, this does not mean that the experience has to be negative, on the contrary, the experience can be much more enriching than imagined. For this, a thorough planning is required, the company must take care of its workers thoroughly and the anticipation is the key to align an adequate expatriation policy.
What aspects should be taken into account?
Imagine an expatriation to Lithgow, Australia, or to Riobamba, Ecuador. Or better yet, to Bijapur, India, or Ziguinchor in Senegal. It is essential to know beyond geographical location, the language spoken or the currency that is used. For the success of the project it is essential to know all the possible characteristics of the new destination, especially in particular cases where the worker is transferred with his family. Advance guidance is essential since the expatriate family must prepare mentally for the process.
Some important aspects in relation to the accommodation are:
General information of the city and country:
- Culture and context; holidays, traditions, food, etc.
- Transportation; public and private
- Sites of interest, leisure and tourism
- Sports or networking clubs
- Bank System
- Problems of the community
Information and description of the areas:
- Information and description of the zones: Areas recommended for living
- Areas not recommended
- Real-estate market; rental conditions and characteristics of the type of housing available in the market
- General house prices
General information about the education system
- General characteristics; type of education, school cycles, relevance of public, private or international education
- List of International, bilingual, public and private schools; degrees and levels that contemplate
- List of nurseries and universities
- General education prices
- General registration conditions
General information on the health system
- Public and private health
- List of most important hospitals and clinics
- Numbers and contacts in case of emergencies
It is also advisable to contemplate and analyze potential nearby cities, that is to say, if the geographical location of work does not contemplate the minimum comforts that he and his family need, it is possible that there is a nearby city with better guarantees to which the worker can move daily. A good communication policy throughout the process is very well valued and helps the commitment to the project.
But the list does not end here. These factors simply contemplate what is related to the accommodation of the worker, in addition it is necessary to take into account factors in legal matters that must be contemplated carefully so that the expatriation policy is defined successfully.
Multiple undesirable situations can arise if the legal processes of expatriation are unknown. The complexity consists in that the rights and obligations, administrative procedures, migratory and fiscal processes depend on several changing parameters. That is, the country of destination, the expatriate’s nationality, his or her fees, the nature of the company, are basic factors that determine the legal processes of the worker, but in addition, it must be taken into account that the countries have constant changes in their immigration requirements and procedures. It is essential to be updated, an expatriation that takes place one year, the following year could have a completely different process.
In case the company does not have internal legal advice, the ideal is to hire external services from experts in the field, so that the following factors are considered:
- Information related to the protocols to be followed in relation to the fiscal implications derived from the displacement or hiring of the worker
- Optimal tax determination based on the personal, family and patrimonial situation of the worker
- Determination of the tax obligations of the worker during the entire duration of the expatriation
- Analysis of international agreements between countries to avoid double taxation
- Calculation of the worker’s hypothetical tax, in the event that the company decides to apply a tax equalization mechanism
- Fiscal reconciliation calculations that come from the company employees protected fiscally, in accordance with the Policy of Displacement
Labor and Social Security Matters:
- Information regarding the protocols to follow in relation to the labor and Social Security implications derived from the displacement
- Labor and Social Security implications of the displacement or hiring of the worker
- Analysis of more efficient alternatives in relation to labor relations, between the worker and the company
- Contract or letter of displacement to the destination legislation
- Calculations of contributions to the Social Security of the employee
- Advice on the Social Security legislation to which the worker must be accommodated during his / her journey
- Application of international treaties on Social Security
- Social benefits at destination
- Advice and information about the process, deadlines and necessary documentation
- Migratory implications
- Pros and cons of a displacement vs. local hiring
- Migratory costs in the country of destination
- Calculation of employee compensation package
- Salary comparisons of the country of origin vs. Destination country
- Social security plans
If the correct measures are contemplated, an expatriation policy may be developed that will respond to expatriate personnel on any issue arising at any time during the process, as well as comply with the tax and labor obligations that arise, both in the country of origin as in the destination. Only in this way, the project can be carefully watched in each of the stages in order for the assignments to be carried out successfully.
At Expat Advisors we are proud to have a track record that has allowed us to support internationalization projects in more than 375 cities and more than 125 countries. Our Corporate Global Mobility services provide detailed advice, consultancy and comprehensive management to any country in the world.
By Ana Ochoa – Global Mobility Manager – Expat Advisors
Expat Advisors ©
Experts in Global Mobility
Tel.: +34 91 781 80 85
Fax: +34 91 781 70 20