Global Mobility: A Planning Checklist

We at Blueback Global have recently designed a global mobility checklist. Global mobility in this framework attributes the process of relocating an employee from the current location of employment (i.e., the home country) to a new foreign location (i.e., the host country) for a short-term assignment, ranging from one to several years. The relocated employee is often referred to as an expatriate.

Global Mobility – A Checklist for Planning Purposes

A common myth is that a global assignment means full coverage of the costs of relocating to work in the host country, together with full compensation adjustments for the difference in costs of living. This can work for particular expatriates, but in general, the coverage of the costs and employer’s support varies from “minimal” to “less than full” coverage. As an example, with minimal coverage, the expatriate might receive none or some (not full) alterations to the local cost of living, receive a local allowance (which can be lower than the one at home) and does not benefit from tax compensation.

So the question comes up: If the expatriate may likely be worse off financially or in another way, compared to working in the home country, why would he/she want to relocate? Some common reasons include:

• • Attraction to the host country’s culture, living environment, or for personal reasons;

• • The desire to take up new challenges of working in the host country, such as having additional work responsibilities, change in work scope, a new job position or opportunities for learning;

• • The desire of the employee to seek a change in his/her work environment and team;

• • To meet new people globally;

• Gain global work experience.

Global Mobility Checklist

Once the global mobility initiative is decided and approved, the next important step is to plan and execute successfully. The following checklist outlines the factors that should be considered by the company when planning a global mobility initiative. This checklist is by no means exhaustive; it is intended to provide a framework that can be customized to each company’s unique parameters, for a successful global mobility roll-out. 

Step #1: Global Mobility

• • Who will be the employer, i.e., where will payroll of expatriate reside;

• • Tax reimbursement policy, i.e., to tax equalize expatriate or not;

• • Social security policy / Insurance coverage;

• • Insurance coverage policy;

• • Develop total costs of assignment template and estimates;

• Eventual “return policy” at end of assignment – expectations, process, and outcomes.

Step #2: Immigration

• • Determine the timeline and requirements for immigration into the host country;

• • Execute on immigration steps – expatriate and his/her dependents;

• Project management and coordination and sequence (e.g., do not commence work in the host country before approval of local work permits).

Step #3: Expatriate Remuneration

• • Determine compensation approach, e.g., keep existing salary or localize salary;

• • Cost of living adjustment between the home country and the host country;

• • Other benefits – leave entitlements, e.g., follow local or keep to home country policy;

• • Dependents of the expatriate – policy on education, housing, hardship allowance, etc;

• Relocation assistance policy – disposition (sale/rental) of a home in the home country.

Step #4: Medical Insurance

• Insurance coverage – home country policy or host country policy.

Step #5: Social Security

• • Apply for a certificate of coverage or enroll in the local program;

• Review applicability of Totalization Agreement (“TA”) between the home and host country. TA is a bilateral country to the country agreement that helps eliminate dual social security burden and taxation.

Step #6: Tax Planning

• • Evaluate the tax impact of the relocation on the employee;

• • Pre-arrival, arrival and end of assignment briefings and consultation with a tax advisor;

• • Tax calculations – employer and employee costs and impact;

• • Assistance (or none) with expatriate’s tax returns, both home and host country;

• Project management and coordination to ensure tax filing compliance.

Step #7: Payroll

• • Design, set up and payment method;

• • Monthly calculations and payments;

• Compliance requirements – payroll returns, local employee returns.

Step #8: Relocation

• • Relocation assistance – full assistance. Company assists with relocation logistics, airfare, move, temporary housing etc.

• Relocation assistance – an allowance is provided to the employee. The employee handles his/her own relocation logistics, airfare, move, temporary housing etc.

Step #9: Accounting and Finance / Operations

• • Host country readiness – meeting requirements of immigration (office space, local company bank account, tax ID, social security, background checks on employee etc);

• • Host country readiness – onboarding of incoming expatriate – technology equipment, software/email access etc;

• • Inter-company entries to book and allocate the cost of the assignment between the home country and host country;

• Define Performance management and review process for expatriate.

The external support from global business solutions service can help to successfully implement the global mobility process. Blueback Global’s International Employer Services provides an integrated solution for your business. Our “one-stop” approach can ensure the successful planning and execution of your global mobility projects.