Mobility Strategy - Market Practices

Expatriate Localization

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1 © 2022 Graebel Companies, Inc. All Rights Reserved. This document contains CONFIDENTIAL information. Reproduction and distribution of this document in any manner or for any purpose is prohibited without the express written permission of Graebel Companies, Inc. Expatriate Localization – Market Practices Provision Market Practices Definition > The process of transitioning an expatriate to local employment terms in the host country, including joining local payroll, local healthcare benefits, and local pension scheme (where applicable). > Localization typically occurs when it is determined the intent of the international assignment has shifted from temporary to permanent and/or the career focus has shifted to the host country, and it is likely the individual will remain in the host country for an indefinite period of time. Employee Case > If an expatriate requests to have the assignment made permanent for personal reasons and/or career aspirations, the company can have full discretion when determining to what extent, if any, to localize the employee and provide any or all localization benefits. Visa / Work Permit > There may be additional immigration elements to consider when attempting to localize an employee. A determination needs to be made to ensure that localizing an employee does not contradict the business case for the employee visa. > Further, it could benefit the company to keep the employee's immigration status as a sponsored employee after considering specific facts and circumstances. This would then enable the employee to only be authorized to work for their current company. > Permanent residency sponsorship, if necessary, will enable the employee to work wherever he/she chooses once an approved permanent residency is obtained. Travel Policy > Most companies will provide one trip to the home location for the employee and spouse/partner to settle personal matters during the transition period from expatriate to local employee. > Travel parameters would align with the Company's T&E policy. Tax Assistance / Tax Return Preparation > Companies need to articulate what time period tax equalization participation would continue even as a localized employee. It could result in additional savings to the Company if it's possible to recapture unutilized foreign tax credits at a future date. Typically, participation continues for up to 2 years after localization occurs. > While tax preparation and filing may be supported for up to 2 years after localization; tax consultation support usually ceases after the year of the transition to local employment. Sale of Origin Home > If the employee retained their home country residence, home sale assistance may be provided based on the Company's domestic policy (most prevalent in US and Canada) OR > Direct reimbursement of home sale closing costs may be offered > Any property management support or services provided during the assignment would cease as of the date of localization.

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