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Expat Employment for International Businesses

By April 18, 2016 November 20th, 2017 No Comments
Expat Employment for International Businesses

Global expansion can be a tedious process.  Many times companies turn to “expat employment” in their target country to have a sense of familiarity and security. This is a very common practice for companies to send existing employees to oversee the new operations.  As we have discussed before in this Post, hiring an expat is not as simple and straightforward as hiring a local national of the country.

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We’ve identified some factors and tips for hiring an expat internationally:

Plan ahead

It is important to leave plenty of time to make arrangements for visa processing and work permit applications before you send the expat to your new country. The processing time for visa and work permit varies from country to country. There are certain exceptions. For instance, the citizens of European Union can freely work in member countries without much red tape. The ASEAN Countries may adopt this practice very soon, but don’t count on the immigration authorities. Take control of the process by planning ahead and working with a consultant if there are too many unclear items.

Cost

Cost is definitely a factor to consider when sending an expat into your new country. The initial costs may include government fees, visa costs, work permit costs, flights, housing allowance and other costs associated with the employee’s move.

Labor compliance

Compliance! It should be the first priority in your global expansion strategy; hiring an expat in a new country is not as simple as sending a person to work for you there.  Compliance issues involve making required social security contributions, filing and paying taxes on the employee’s behalf, making sure that visa and work permit is valid, and keeping up with new labor regulations, which are not necessarily reported in the newspapers.  An employment service professional or your HR personnel AND your expat employee have to be on top of compliance issues.

Employment practices

Every country has its own set of employment laws that are vastly different from your domestic countries employment practices.  In every country the employer social contributions are different. The number of paid vacation days are different, parental leave is different, termination notices are different, etc.  For example, employees in France receive five weeks of paid leave by law. In your new country, the expat will have to sign a local employment contract drafted according to local laws.

Want to terminate an employee in your new country?  It may not be as simple as firing someone in the U.S. There are termination notice periods that have to be followed and severance payments that have to be made according to local laws and regulations.  Make sure you know them proactively and your employment contract reflects the proper minimums.

You can outsource the work of expat employment and international HR

They are compliance issues that require expert’s advice and have to be followed through by someone with a local knowledge on monthly basis.  Sometimes it is best to not reinvent the wheel. For most companies there is no reason why they need to have a full team who specifies in the target country HR matters; a consulting or service arrangement works just as well.

Avoid these risks by planning ahead and investing in an international employment consultant or using a service like FSaaS.  The value of your employee being compliant in a foreign country can only be truly understood when you have seen so many international employment relationships go sour.  When your employee is worry-free of compliance issues and their payroll comes in on time, they can focus on driving up the revenue in your new country.