Increasingly, companies are realizing that having the appropriate talent at the right place is essential to the success of a globally-focused enterprise. To that end, the movement of executives globally has accelerated in recent years, whether involving a short-term visit, a temporary assignment, or a long-term foreign transfer of employment. Careful analysis of the legal issues involved is a critical first step to successfully managing the executive’s employment transition. This series of posts will discuss the major issues involved with the development and coordination of a Global Executive Mobility Strategy, and suggests a Best Practice Approach to optimize the cohesiveness of a global workforce.
Generally, the major issues that a Global Executive Mobility Strategy needs to consider include structure of the employment relationship and other labor and employment issues, immigration, tax, and employee benefits and executive compensation. As a starting point, it may make sense to formalize the working arrangements of the assignment, whether by entering into a new or amended employment agreement or simply a Letter of Understanding, which sets out the terms and conditions of the expatriate assignment. Whatever the form chosen, this document should include a clarification of the employing entity (whether it would continue to be the home country employer, a local or host country affiliate, dual employers, or even an international holding affiliate), specific duties and responsibilities related to the assignment; title; compensation and benefit arrangements; any tax equalization arrangements; any negotiated or “special” agreements that are particular to the assignment for that executive (such as mobilty premiums, cost of living adjustments, housing allowances, and home Leave arrangements); relocation and repatriation arrangements; a clear beginning and ending of the term of foreign assignment; termination provisions; a dispute resolution process; and consideration of available confidentiality and intellectual property protections.
There are a multitude of issues that need to be considered in connection with the development of a Global Executive Mobility Strategy and a whole host of legal, tax, accounting and immigration law implications. This series of posts will highlight major issues to consider and suggests several potential Best Practices. However, it is by no means exhaustive, comprehensive, nor complete. I strongly urges anyone involved with these issues to consult with qualified legal and tax counsel before committing to any course of action.
In the next post in the series, we will discuss immigration issues. Please subscribe to the blog to get email notifications for future posts.
PART II. Going Global: A Review of Critical Issues of Executive Mobility – Immigration
PART III. Going Global: A Review of Critical Issues of Executive Mobility – Tax Issues
PART IV. Going Global: A Review of Critical Issues of Executive Mobility – Employee Benefits and Executive Compensation Issues