Managing your global mobility program is a challenging task. You're charged with ensuring the seamless relocation of employees, corporate integration, managing corporate and personal tax regulations and laws in multiple tax jurisdictions, and answering employee questions about working internationally—among many other things.
What are Global Mobility Services?
Global mobility services consist of multiple pieces designed to help an employer seamlessly transition employees and their families to a foreign country and keep the company in compliance with international tax laws from a corporate tax, employer and employee perspective.
Here are some of the common areas that global mobility services address:
Tax Compliance Risks
Businesses not only need to understand their home country rules and regulations but also those of the host country. It’s important to understand how foreign tax regulations apply, both to your operation and your employees, so you can maximize profitability and minimize liability.
If the company or the employee become out of compliance with local or foreign tax laws, you may face hefty penalties, loss of business or business reputation in the host country, or even the risk of prosecution.
Some of your tax considerations and headaches that could benefit from proper guidance include:
Moving to a new country can be stressful for an employee and their families. It is all too common for people to have a difficult time adapting to a foreign environment. That’s why it’s important to look into the local culture and help the employee and their family prepare for the adjustment. Companies can do an analysis of potential expats and their families to assess any unique circumstances that may make adjustment particularly difficult.
International travel always comes with a certain amount of risk. Common travel issues include immigrations/customs issues, lost passports, security concerns, and monetary issues.
A global mobility program will allow an employer to assess all of the above risks, develop a plan or company policies to address each of the common risk areas and provide that information to the employee prior to going foreign. This benefits the employee in the transition, particularly when a family is also moving, and helps the employer understand the potential liability issues before the employee embarks on a foreign assignment.
Why You Need an International Tax Advisor
Working globally, it can be difficult to stay informed and keep rules and regulations straight, especially in a foreign country. There are risks present for both the employer and the employee.
Due to this complexity, many companies will retain an accounting firm to provide the company and their employees with all necessary tax compliance and global mobility needs.
That’s where Eide Bailly comes in. Our experienced international tax professionals can assist companies that have an existing global mobility program and we help companies develop a new global mobility program. We can help by offering a broad range of inbound and outbound international tax services. We help you and your employees prepare for and stay in compliance with international tax rules and regulations when working abroad, so you can focus on growing your business, not tax forms. Through our membership in HLB Global, we have access to professionals in over 150 countries.
The cost of sending an employee to a foreign location is a major obstacle. These costs can be broken down into three main categories:
Cost of Relocating
The initial relocation costs, including compliance costs, taxes and social security, wages, housing allowance and any other moving fees can add up. Oftentimes, companies find that it may be cheaper to hire new employees in the host country rather than relocating a current employee. However, there are certain benefits of relocation that outweigh this cost, such as specialized knowledge, better talent retention, personal growth and increased skill depth.
Cost of Living
Cost of living varies by country and must be taken into consideration when providing an employee with a reasonable salary, as well as allotments for housing and other expenses. Healthcare costs are also an important factor, as employers will need to look into medical coverage in the host country. Other considerations include education, transportation, personal care (food, clothing, toiletries, etc.) and utility expenses such as electricity, water and gas.
Cost of Operations
Operating a business in a foreign country can lead to unexpected expenses for both the business and employee. While direct foreign manufacturing costs may go down, if the market for the product produced is elsewhere, the taxes and shipping costs may overshadow those savings. Bookkeeping can also be more difficult when foreign currency and conversions are involved, so there may be the additional expense of hiring an accountant who is experienced in foreign transactions. If you don’t have an experienced team, you may be subject to even steeper costs such as penalties and legal fees if you find yourself out of compliance.
Employees will have a lot of questions when considering a move abroad, such as:
There are also local logistics, such as whether to sell or rent their home, and what to do with furniture and large goods. It is important that the employer be able to answer these and similar employee questions or serve as a resource so employees can get these and other questions answered in a timely fashion. Open communication with employees is crucial to a successful global mobility program.
Eide Bailly is Here to Answer Your Global Mobility Program Questions
Eide Bailly’s international tax professionals are experienced in the global mobility program environment and will work closely with you to understand your foreign activities goals. We want to ensure you’re connected to the information and resources you need to remain in compliance, and that you and your company implement relevant company policies to help you manage your global mobility program.
Eide Bailly is a proud member of HLB, a global advisory and accounting network that can provide you with international business solutions you need to be successful in global markets. This allows us to connect you with professionals worldwide who work and live in the markets where you do business.
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Principal - Global Mobility Practice Leader - International Tax
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