The Beginner’s Guide to Global Mobility

20 May 2020 | Guy Abbiss
Global Mobility

We find that clients tend to ask the same initial questions when they are looking to expand globally for the first time or are new to a role in global mobility. Our Beginner’s Guide to Global Mobility outlines these frequently asked questions and gives bite-sized guidance on how you should approach them to ensure success. We hope you find this guide useful and would love to hear from you if there are any additional questions you feel should be included. Find out more about our global mobility services here.

What options are available for structuring an assignment?

The most common types of assignment structures are:

  • a (long or short- term) temporary assignment from the home country employer to a
    host country employer,
  • a permanent transfer of employment to a host country employer (local contract),
  •  a commuter assignment where the employee remains resident in the home country and works in a host country.

Each of these has very different implications from a corporate tax, income tax, employment law and social security point of view. Any decision as to which type to utilise requires very careful consideration not only in light of these implications but also the primary objectives for the assignment and the impact on costs and management time.

What immigration options are there when relocating employees internationally?

Typically, immigration requirements are based on the activities to be undertaken in the host country rather than the time to be spent there. Each country has specific visa criteria and different immigration laws which may be subject to frequent change, so it is imperative to check the specific requirements of the host country before any visit takes place.

Business visitor visas are usually different to work permits.

Business Visitor Visas

  • These are intended for those international travellers who are planning a short trip to the host country to undertake “permitted activities”.
  • The definition of these activities varies but typically includes attending conferences, undertaking classroom-based training, and certain business meetings.
  • The key is that “productive work” is not permitted. If the employee is carrying out their usual day-to-day duties in the host country, as they would do usually in the home country, they are likely to break the terms of a business visa.

Work Permits (sponsored workers with Tier 2 or Tier 5 visas in the UK)

  • Where “productive” activities need to be undertaken a work permit/visa is required.
  • Such applications are usually more comprehensive than business visitor visas.

What should be considered when designing relocation packages?

There are a number of important factors to consider when putting together relocation packages.

The top three are:

  1. Benchmarking relocation provisions against other companies in your industry to ensure that you are meeting market norms.
  2. Ensuring that the support offered addresses all the necessary compliance obligations.
  3. Ensuring that the package supports the objectives of the assignment.

Any advice you receive should include not only what relocation support relevant competitors offer, but also trends and best practices for the type of relocations you are considering.

Ensuring that your packages are market competitive, compliant and support the assignment’s objectives enables you not only to recruit and retain the global talent you need but also to manage the associated legal and tax risks.

What are the employment and pay considerations I need to take into account?

Can we keep our employees on their home country payroll, social security and benefits?

Individuals who continue to be employed by their home country employer can remain on, and be paid from, their home country payroll during their assignment. This is often a requirement and desirable from an administrative point of view if the employee continues to participate in their home country benefits scheme and home country pension plan.

However, there could also be an obligation to withhold tax in the host country on the compensation provided in the home country. Employers should consider the tax withholding rules in the host location and a “shadow payroll” may often need to be operated in the host jurisdiction. In addition, the host country’s tax treatment of providing benefits provided in the home country, such as medical benefits or pension contributions need to be considered.

A shadow payroll is used to calculate the amount of tax due in relation to the assignee and to pay it to the local government on a regular basis. The term “shadow” is used because typically the company pays these taxes on behalf of the assignee but often the assignee does not see the calculations.

Many countries, including the UK, have entered into social security agreements based on which employees on secondment can continue to participate in their home country social security system.

It is essential that you understand whether any social security treaty applies in the relevant country and what:

  • The conditions apply in the circumstances;
  • Actions should be taken up front;
  • The ongoing reporting requirements are for both the home and host country payroll.

If appropriate, in some cases the treaties would allow for planning around the choice of applicable social security legislation as a result of which significant savings can be achieved.

What employment rights will our assignees have overseas? Do they also retain UK employment rights?

Generally, contracts of employment contain a choice of law and jurisdiction clause. If a UK-based employee remains on their home contract of employment, ordinarily this clause will mean that the contract is interpreted pursuant to the law of England and Wales.

If an employee is placed onto a local host country contract it may depend on the identity of the host country, still be possible to choose for the contract to be subject to the laws and jurisdiction of England and Wales.

However, an employee may, depending on the circumstances and length of the assignment, also acquire “mandatory” employment rights in the host country. Mandatory rights are likely to include rights on dismissal and discrimination in most host countries.

If an employee is assigned to another EU country, they may amount to a posted worker and be subject to the posted workers’ directive. This requires an employee temporarily posted to another country to receive at least the minimum legal requirements of the host country in relation to specified issues, which include working time, pay and health and safety. These rights will continue post-Brexit unless the UK decides to repeal the relevant laws.

Will we need new post-termination of employment trade protection and confidentiality provisions when sending employees on assignment?

If an employee remains on their home contract, ordinarily a key or senior UK employee will be subject to post-termination of employment trade protection seeking, for example, to prohibit the employee from doing things such as accepting orders from customers or soliciting employees to join a competitor. They are likely to be accompanied by provisions which prohibit the use of the employer’s confidential information and trade secrets.

It is important to ensure that such contractual restrictions are appropriate to the assignment in the sense that the relationships and information they define as being protected are those that are relevant to the assignment.

What is permitted by way of such post-termination of employment restrictions varies significantly from country to country. For example, in some European countries separate payment must be made for the duration of the restrictions in order for them to be enforced.

Even though the restrictions may be enforceable under UK law, even if the contract expressly chooses to be subject to the law of England and Wales, it may not necessarily be enforceable against the employee through the English courts. For example, in EU member states individuals may generally only be subject to proceedings in a state if they are considered to be domiciled there under its laws (which is not as straightforward). Even if proceedings can be taken in an English court and an order enforcing a post-termination of employment restriction is obtained, it may not be possible to enforce it in a foreign jurisdiction if it is considered that the restriction infringed local principles of
public policy relating to restraint of trade. Where this is the case, restrictions that take account of host country law should be considered for inclusion in any secondment arrangements.

Are we required to use local contracts of employment?

Before deciding how to document the arrangements, consideration should be given to the type and length of the assignment.

Ordinarily, home contracts can be maintained with a separate secondment letter to cover the period of the assignment. This is particularly appropriate if the intention is for the employee to return to work in the home country and to be able to continue to benefit from home country benefits and remain in the home country social security system, although time limits will apply. If the assignment is for a longer period and there is no home country position for the individual to return to, a fresh host country contract for a fixed period may be more appropriate.

Do we need to translate the contract into the local language?

This depends on the location but in some countries any contractual documentation will be void unless it is in the local language. Where this is the case, if the employee or employer still want an English version (for example, as a reference source or to assist a centralised HR unit in managing the employee relationship), the usual course would be to prepare any document containing contractual terms in dual-language format in two columns, one in English, the other in the local language. Some countries also have specific signature requirements.

How can we deliver an assignee package in a tax-efficient way?

Tax is usually the largest part of the cost associated with international assignments. Careful planning can reduce the overall cost while taking away some uncertainty for the employee. Tax issues in multiple jurisdictions can arise when seconding employees overseas, but these should not be daunting provided that they receive due consideration.

Tax equalisation

Tax equalisation has always been and continues to be a popular choice as part of an overall package to facilitate international secondments. Under tax equalisation, the employee is kept in a no better or worse position, tax wise, as a result of taking up an international assignment. Where the host country has higher tax rates than the home country, tax equalisation may potentially add to the employment costs. Its simplicity from an employee understanding enables them to focus on their assignment rather than being concerned about tax burdens that could arise with paying tax in two jurisdictions.

Assignment Benefits

Significant cost savings can be achieved by properly structuring assignee packages. Many countries offer reliefs for international assignees such as certain assignment benefits such as employer provided relocation, home leave and accommodation.

Providing benefits in kind or expenses rather than paying round sum cash allowances may also often result in a more favourable tax treatment for both employers and employees. For example, individuals on a temporary assignment away from their normal place of work may, for the purposes of UK taxation, be regarded as being on a business trip. Travel and subsistence expenses associated with the trips can be provided tax efficiently if the correct documentation is in place.

Are there any considerations for our incentive plans and eligibility to participate in them when moving people internationally?

There are many different aspects to consider in relation to incentive plans when employees move internationally. Existing incentive awards will usually continue, provided that the individual remains employed by a group company. However, there are tax, employment law, and regulatory considerations that will need to be taken into account.

Employees may be subject to tax on their awards in more than one jurisdiction, so procedures will need to be in place to ensure that the correct tax is withheld in each location. Employers need to bear in mind that employment laws in certain jurisdictions may give employees much greater rights in terms of incentive awards on termination of employment, and that restrictive covenants in incentive plans may not be enforceable in all jurisdictions. There may also be regulatory restrictions on the delivery of shares in
some jurisdictions.

In respect of any new incentive grants, employers will need to decide whether assignees will be granted in accordance with the home country policy or the country to which they have moved.

Companies may grant awards under different plans in different jurisdictions, and in some cases under tax qualified plans offering tax advantages. Whether it will be worthwhile for the assignee to participate in a tax qualified plan may depend on the length of the
intended assignment.

How can we manage and control the cost of international assignments?

Accommodation and Shipping Costs

As well as the tax efficiencies on expenses and benefits, there are also opportunities to save money on some of the relocation provisions themselves. For example, if you offer to provide temporary accommodation upon arrival in the host location to an employee as part of their package, it is considerably more cost effective to put the employee up in a serviced apartment rather than a hotel for this period. There are additional benefits of doing this, for instance the employee will have a kitchen area in the apartment and therefore will not be eating out in the hotel restaurant the whole time, which saves on per diem or food expenses. Another benefit is that apartments usually have more space and are more comfortable to be in for couples or families than a hotel room.

If employees are taking their household goods over to the host location there are a
number of cost-saving options, such as:

  • Ensuring that the bare essentials are included in an airfreight and the bulk of the goods travel by sea, or potentially using a shared  container;
  • Making sure that the insurance rate is reasonable for the transport route.

Choosing the best methods can save several hundreds, if not thousands in expenses, which across multiple assignments can soon add up.

Cost of living allowance (COLA)

Many companies offer a cost of living allowance (COLA) to assignees to ensure they have a comparable purchasing power in the host location as they had in the home location. There are a wide range of sources of data for this allowance and the key is to ensure that it includes the relevant items in the comparison, as well as factoring in shopping styles and regional variations within the same country.

Does sending my employee on an international assignment create a permanent establishment in the host location for our company?

The typical approach (agreed within member countries of the OECD) is that a non-resident company is only subject to corporation tax in a new location if it is trading in that location through a permanent establishment.

Activity may be considered to constitute a permanent establishment if:

  • The non-resident company has a fixed place of business in the new location through which its business is carried out (either wholly or in part) for a period of approximately 6 months; or
  • An individual or corporation acting on behalf of the non-resident company has, and habitually exercises, authority to do business on behalf of the company (this does not include, for example, independent sales agents and distributors who act for
    several “clients”).

In terms of the first condition, even one individual assigned to the new location can be considered a permanent establishment, depending on the nature of the activities carried out. The key test is whether or not the activities performed in the new location form an essential and significant part of the activity of the company. Activities that are preparatory or secondary in relation to the company’s main trading activities are not, alone, sufficient to trigger a liability to corporation tax in the new location. For example, an assignee carrying out market research activities in advance of the company establishing a trading presence in the new location will not usually result in the creation
of a permanent establishment there.

In relation to the second condition, even if the individual does not have actual authority to sign contracts on behalf of the non-resident company, the negotiation of contracts may be sufficient to create a permanent establishment.

Where the non-resident company operates through a subsidiary in the host location, an assignee’s activities could still create a separate permanent establishment for the non-resident company there and result in additional corporation tax liabilities.

How can we make the assignment a success for the employee and their family?

Family members not being able to settle into life in the host location is one of the main reasons why secondments end early or fail. It is advisable to consider arranging a pre-secondment visit to the host location. This can give the employee and their family members a feel for what living and working in the host location may be like. As well as exploring the local area, it is a great opportunity to discover what is available on the local housing market and to arrange tours around local schools so that decisions on these key factors for successful integration can happen shortly after the trip and with all of the facts known.

There is a broad spectrum of support available to families to enhance their experience on secondment, including advice groups on entering the host country employment market (subject to this being permitted under the visa held), social gatherings and cultural events for the whole family and organised opportunities to really get embedded in the host country culture and way of life.

What about the end of the assignment, what employment and pay considerations should we take into account?

Document at the outset

It is wise to clearly document the intended termination arrangements at the outset of the assignment as this provides certainty for all parties.

Check plans throughout the assignment

It is also important to ensure processes are in place to check that those intentions remain the same during the life cycle of the assignment. If there are any fundamental changes to the plans during the assignment, appropriate communications will be required with the assignee.

Where the employee is on a home contract consider whether there is a role to return to

If an employee is seconded from his home contract, consider whether the employee will be entitled to return to his/her previous role or some other suitable position. If not, you may wish to document what will happen upon their return if no appropriate role is available (for example will they be subject to a normal redundancy process or entitled to redundancy pay).

Where the employee is on a host country contract consider whether you can fix the period

If the employee is being put on a host country contract consider, within the parameters of the host country law, whether you can fix the term of the contract to cover the period of the assignment. Local advice will be required about what rights the employee will have during and on the termination of employment. In EU countries, for example, workers on fixed term contracts have specific rights.

Consider tax and trailing reporting requirements

Assignment-related payments like a bonus or share incentives paid after the end of an assignment may attract a tax charge in the host location after the employees has left. There may be trailing reporting requirements for the employer and employee in the host location as well as the requirements in the home location.

Plan ahead to maximise employee retention

It is interesting to note that the employee retention rate upon returning from an international secondment is surprisingly low. A significant proportion of employees leave within the first year back in the home location, primarily because the new skills and experiences they acquired while on assignment are not being utilised now that they are home. Careful planning from six months prior to the secondment ending can ensure that the role the employee will return to is appropriate and acknowledges that they, and the company, may have evolved and moved forward during the assignment period.


The complex nature of global mobility together with the combined aspects of law, tax and HR that need to be considered when planning an international assignment can be daunting. As a global mobility strategy is a significant cost investment for the business and a great way to develop high potential employees, it is critical to get it right. Planning is absolutely key, not just pre-assignment, but throughout the period and prior to the employee’s repatriation to ensure they go on to stay with your business to implement and share their new knowledge and skills in their home location.

Contact us

With expertise in law and tax, strategic HR consulting and communications, Abbiss Cadres offers a fully integrated consulting and advisory service for your globally mobile people.

Abbiss Cadres LLP is authorised and regulated by the Solicitors Regulation Authority in respect of carrying out any legal activities which fall within section 12 of the Legal Services Act 2007. Our highly experienced team of lawyers, consultants, immigration and tax experts can help you in all areas of global mobility planning and compliance, from tax, social security and immigration compliance, to employment law and
international reward.

With our international coverage through the CELIA Alliance, and wider networking correspondent firms in six continents, we can help you ensure corporate and employee compliance in home or host countries around the world.

We specialise in helping companies who are establishing new global mobility programmes or are reviewing their arrangements. Contact us on +44 (0) 203 051 5711 or email us to discuss your needs and how we could help you deliver them.


Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

The author

Guy Abbiss
Employment Law
Compensation and Benefits
International Assignments
D: +44 (0) 203 051 5714
T: +44 (0) 203 051 5711
F: +44 (0) 203 051 5712

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