What are the main considerations when your client wants to expand into the European Economic Area (EEA) or the UK for the first time?
To help you to help your clients, we have created a checklist of the top 10 considerations for a business taking its first steps in the EEA or UK.
- Tax and social security
- Does the business need to pay corporation tax? (Is it creating a permanent establishment?)
- What (if any) employee taxes should it pay? (Can employees remain on home country payroll? Consider local tax withholding rules.)
- Hiring staff
- As an employee, secondee or consultant?
- Consider any relevant collective agreements.
- Must the employment documents include certain mandatory local employment law information?
- Are there any mandatory pension’s obligations?
- Ensure confidentiality is maintained and if post termination restrictions work to protect the new territory.
- In what language should you draft the contracts?
- If sending staff on international assignment to Europe, consider how best to structure and benchmark their package and assignment documents.
- Consider repatriation and other practical issues that may arise at the end of their assignment.
- Check Immigration rules
- Can non-Europeans work lawfully in the relevant country (as rules can differ across Europe), and are there any restrictions?
- How to incentivise staff – what incentive plans can be used?
- Consider local benchmarking data to ensure a competitive remuneration package.
- Will staff be incentivised solely in cash, or will equity awards also be made?
- Are there any restrictions under local law on offering equity awards?
- How will equity incentives be taxed, and are there any tax efficient ways of using equity incentives?
- Making staff feel at home
- Consider cultural awareness training as approaches in European countries vary greatly.
- Practical support for any assignees, their partners and children (e.g. schooling).
- Unions – any works councils, Information and Consultation or unions to consider?
- What role, if any, will a union, or works council, have in certain decisions such as reorganisations and acquisitions?
- Is your client buying the assets of a business/making an intra- group transfer?
- Beware the Acquired Rights Directive which operates across the EU and transfers employees to the new business without needing any novations or new contracts.
- Generally, it is not possible to make changes to the transferring employees’ contracts of employment.
- Data protection
- Consider strict data privacy laws especially in terms of the European General Data Protection Regulation (“GDPR”) currently in force or the UK GDPR if setting up in the UK.
- Are there mandatory insurances for employers?
- Office and equipment insurance.
- Additional medical insurance cover for expats, and their families.
How can we help you to help your clients?
These questions will help you to help your clients plan their expansion into the EEA and UK.
However, the answers will often vary depending which country your client wishes to expand into.
Abbiss Cadres can assist in providing comprehensive support and expertise to your clients across all the areas identified above in the UK and the EEA through the CELIA Alliance of member firms of which Abbiss Cadres is a member and co-founder.