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Fundamentals of Global Relocation

Global Trends• International activity remains strong; globalization continuing into new

markets

• Return on Investment for an assignment continues to be an area of focus with Talent Management emerging as a stronger factor

• More focus on analysis of international relocation/assignment costs to ensure Effective Use of Funds

• Drive to make policies more flexible to “tailor fit” the assignment, leading to more policy tiers and more policy types;

• Heightened focus on Risk Management

Focus on Talent ManagementProcess• Improved candidate assessment and selection• Monitored assignment progress; provision of executive sponsor for

assignees• Planning for successful repatriation at the beginning of an assignment• More effective communication of the objectives of the assignment

Policy• Review of policy components to fully support talent management• More use of tiers and flexibility to meet the needs of talent

development• Enhanced spousal/partner support

Focus on Use of FundsProcess• Focus on analyzing costs and using funds in the right place rather

than cutting back on benefits• Reviewing and streamlining processes to gain efficiencies• Increased benchmarking to ensure identification of new or creative

solutions• Heightened focus on exception management

Policy• Host plus and reduced balance sheet approaches increasing in

popularity• Increased use of allowances vs. reimbursement to reduce cost,

reduce administration, and allow more choice and flexibility

Focus on Use of FundsProcess• Focus on analyzing costs and using funds in the right place rather

than cutting back on benefits• Reviewing and streamlining processes to gain efficiencies• Increased benchmarking to ensure identification of new or creative

solutions• Heightened focus on exception management

Policy• Host plus and reduced balance sheet approaches increasing in

popularity• Increased use of allowances vs. reimbursement to reduce cost,

reduce administration, and allow more choice and flexibility

Focus on Risk ManagementProcess• Review of security and evacuation processes• Continued focus on visa and immigration compliance• Continued focus on tax compliance• Increased use of technology for reporting, tracking, and managing

spend

Policy• A newly disciplined and action-oriented approach to policy including

benchmarking of competitor programs/best practices• Scrutiny and update of policies to ensure risk and compliance factors

are effectively addressed (particularly in the case of merger, acquisition, and divestiture activity)

Case Study

Assignee Need• Financial/Budget Process Expert’s job

responsibilities would benefit host country• Host Country: Belgium• Estimated length of assignment: 12-18

months

Assignment Planning

Utopia

• Need Identified• Candidates Identified• Candidate Review• Prepare Cost Estimate and Proposal• Candidate Confirmed• Pre-decision “On-boarding”• LOA Developed• Look See Visit• Pre-decision Tax• Candidate Confirms Acceptance• Mobility Process Policy Orientation ("On-

boarding Call")

Actual

• Candidate Confirms Acceptance• Look See Visit• Prepare Proposal• LOA Developed• Mobility Process Policy Orientation ("On-

boarding Call")

Case Study “Candidate”• Candidate Home Country: USA• Candidate Family Size: 7

Where Global Relocation is Involved, Timing is Everything

• Expatriate assignments can be costly to the employer and work permits take time to process

• Therefore, planning is essential. Ideally, planning occurs at least 3-6 months prior to the assignee’s anticipated arrival

• Emerging trend - more reliance on short-term assignments

In many cases, short-term assignees do not receive the same relocation support as expatriates

Many are left to handle immigration matters on their own

Assignees often obtain business visas for assignments that require work authorization

• Foreign nationals entering as tourists to perform business-related activities

• Noncompliance with exit procedures

• Intentionally applying for the wrong type of visa

• Starting an assignment without the proper work authorization

• Working on a business visa

Examples of Compliance Issues

The primary determinant of whether work authorization is required is the nature of the activities to be undertaken in a country, and NOT the intended length of the assignment or the location of compensation.

Business Visa or Work Permit?

Activities Generally Permitted for Business Visitors

• Business meetings• Fact-finding missions (to establish an office,

business contacts, house hunting, etc.)• Marketing and sales contacts to promote goods

or services originating out-of-country

• Professional or business conferences

Additional Permitted Activities• Many countries have exceptions to the general

restrictions on business visitor activities:

Training (receiving, not providing) After-sale installation and/or service or warranty work

provided for in the sales contract Intra-company consultation

Obtaining a Business Visa• Business visas are required for any foreign national whose country of

citizenship does not have a treaty or agreement with the host country granting visa waiver eligibility.

• Applications must be submitted to the embassy or consulate with jurisdiction over the applicant’s place of residence; a personal appearance may be required.

• Average processing times range from 1 to 10 business days for most applications.– Exceptions in the case of security checks, restricted nationalities, etc…

Obtaining a Business Visa• Required documents normally include:

– Application form– Passport with at least 2 blank pages, valid for at least 6 months from the

date of application– Passport-style photograph(s)– Company letter of support– Proof of funds available to support applicant and any accompanying family

members during the visit, such as a bank statement, pay stubs, proof of employment etc…

– Proof of legal residence/immigration status in the country where the application is filed

– Copy of round-trip airline ticket or copy of travel itinerary– Application fee– Certified copy of the articles of incorporation of the company or the employer’s

certificate of good standing (may be required for some countries)

Business Visa Limitations• Duration of stay

Period of intended stay must be a limited, pre-set period of time consistent with the intended purpose of the trip

• “Work” activities Business visitors cannot officially represent an entity located in

the host country Business visitors cannot perform activities which compete

directly with the activities of local citizens or permanent residents of the host country

• Business visitors cannot earn wages or commissions in the host country, or receive any remuneration from an entity located in the host country

• Business visitors must have a residence and an employer outside of the host country

Business Traveler Best Practices• When entering a foreign country:

Do Carry proof of your travel itinerary Carry a copy of the letter of support signed by your employer which was

filed with your visa application Carry a valid passport with at least 6 months remaining validity and at

least two blank visa pages Know the purpose of your business trip and be prepared to provide an

accurate and detailed explanation of your intended activities

Business Traveler Best Practices

• When entering a foreign country:

Do not Misrepresent the purpose of your visit (i.e. enter the host country as a

tourist) Carry a business card indicating an office address in the host country Maintain a desk or a direct phone line at an office in the host country

Employment Authorization Process

Step 1: Obtain required documentation and prepare the application materials 2 to 3 weeks for destinations that do not require legalized documentation 2 to 12 weeks for destinations that require legalized documentation

Step 2: Work Permit application filed in the destination country Processing times range from 1 to 24 weeks

Step 3: Visa application filed at a consulate that has jurisdiction over the applicant’s place of residence Processing times range from 1 to 5 business days

Step 4: Residence permit or registration application filed post-arrival Processing times vary significantly by country

Employment Authorization Eligibility Criteria

• Academic credentials (i.e. Bachelor’s or Master’s degree)• Proof of relevant work experience, usually in the form of a resume• No previous immigration violations in the destination country• No prior criminal record• Work permit sponsor in the destination country• Salary comparable to what a local national would receive in the

same position • Employment contract or assignment agreement• Valid passport, with remaining validity period of at least six

months and two blank visa pages• Passport photos• Criminal background check (not always required)• Medical exam (not always required)• Age & Gender play a factor in certain locations

Common Pitfalls and Red Flags– Former Nationality Issues– Overstay– Post-arrival processes missteps– Cancellation/de-registration processes– Unmarried partner/common law partner– Overage dependents– Medical issues– Criminal Records– Past immigration violations

Case Study Illustration• Financial/Budget Process Expert’s job

responsibilities would benefit host country• Host Country: Belgium• Estimated length of assignment: 12-18

months• Candidate Home Country: USA• Candidate Family Size: 7

Case Study Illustration (continued)

• Transfer Visa for Specialists• Family Visa Options• Processing takes 8 weeks to complete• Employee enters as a visitor for initial

training and returns to receive work permit and visa

Current Global Environment• The synchronized recession has resulted in unprecedented

tightening of immigration requirements in a number of jurisdictions

• Driven by domestic political considerations rather than any practical outcomes

• Government requirements juxtaposed to business trends:– Governments enacting more restrictive immigration policies with

heightened scrutiny VS.– Business needs to decrease costs and find new opportunities

globally where time is of the essence

Global Economic Downturn • Governments are enacting restrictive immigration regulations

in response to the current global economic downturn:

– Reduction in skilled worker programs

– Heightened application requirements

– Quota systems and other restrictions on the issuance of business visas and work permits

– Policies favoring stricter enforcement of immigration and labor laws

Global Migration Trends• Increase in new legislation restricting access to labor markets by

foreign workers, often introducing new penalty regimes for employers engaged in non-compliance

• Increasing Governmental emphasis on Compliance in the form of increased penalties for immigration non-compliance and increased enforcement

• Apart from immigration compliance, there is also a focus on enforcing tax regulation through requiring Work Permits

Global Migration Trends (continued)

• More restrictive interpretation of existing laws

• Focus shifting from duration to activity based review for business travelers

• Nature of International Assignments changing from traditional expatriate assignment to short-term business travel

• Increased movement of employees from developed countries impacted by the economic downturn to emerging markets

Global Trends in Immigration Enforcement

• Increase in governments’ efforts to punish noncompliant companies and individuals- Introduction to more severe penalties for noncompliance- Significant investments in biometric and information-sharing

technology- Greater emphasis on employer accountability- Increase in frequency of worksite inspections and audits- Negative publicity for noncompliant companies- Comprehensive plans to deport hundreds of thousands of

immigration violators

Specific Challenges for Global Corporations

• Accountability for monitoring employees deployed worldwide

• Nuances of varying immigration laws from country to country– Wide variance in definition of “work”– Application procedures vary country by country, consulate or

even from city to city

• Unknowing failure to comply is generally actionable

• Increased financial exposure due to sheer volume of employees

The Global Move

• Space consideration/Density• Communication: Consistent and timely updates

as move progresses• Scorecard and Performance Measurements• Setting Expectations

The Global Move

• Understanding account directives and transferee/assignee needs

• Education and Direction for Transferee/Assignee • Selection of Origin and Destination Move Agents• Use of packers/move crews with international

packing knowledge and skills

Questions?