international assignments and expatriation

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Managing International Assignments: Compensation Approaches

A new international assignment landscape is challenging traditional compensation approaches

For many years, expatriate compensation has been focused on a dilemma: having assignees on expensive home-based expatriate package versus localization - which is about replacing expatriates with locals or at least transition expatriates from an expatriate package to a local salary. Many predicted that the traditional home-based balance sheet approach would gradually disappear. The predictions of the demise of the typical expatriate approach have been greatly exaggerated. We are witnessing the emergence of new compensation challenges instead, due to the complexity of having to manage multiple types of assignments and assignee categories.

The home-based approach still retains its utility for certain kinds of moves (e.g. business-critical assignments or moves to hardship locations). Local strategies are becoming more common but, due to the difficulty of applying them consistently in all transfer destinations, they are used only in some cases (moves between similar countries, developmental moves) and take multiple forms as “purely local” or local-plus approaches. Additional approaches like international compensation structures have emerged to address issues of global nomads.

The challenge for HR managers is, therefore, not so much to find the best approach applicable for all assignments as to deal with individual assignment complexity, envisage greater mobility policy segmentation and, if relevant for the company, map each compensation approach to a particular assignment in a consistent way.

The increasingly complex international assignment landscape: One size does not fit all anymore

Expatriates vs. Locals

One size fits all?

Let's localize assignees as soon as possible!

Expatriates

Rise of the third-country nationals

Need to add a cost efficient category for junior employees/developmental moves?

Traditional expatriates

Global nomads

Permanent transfers

Employee-initiated moves

Local or local plus?

Foreigners hired locally

Commuters (cross-border or regional

Multiple types of short-term/project/rotational assignments

Increasing number of home locations

Reviewing international assignment approaches in three steps:

Step 1: Understand the options available

Approaches linked to the host country (local or local-plus)

While these approaches sound logical and natural (when relocating assignees to a new country, they will be paid according to the local salary structure in that destination country) their practical implementation is often tricky. Few employees accept a salary decrease when moving to a low-paying country. It is often difficult to reintegrate assignees relocated to a high-paying country into their original salary structure due to their inflated base salary.

The host approach was historically not the most common for assignees on long-term assignments. However, we have witnessed a growing interest in recent years in host-based approaches – either a host approach or local-plus approach (host salary plus selected benefits or premiums) – as companies are trying to contain costs and as significant salary increases in many emerging markets make host strategies more attractive.

Approaches linked to the home country ("balance sheets")

Home-based approaches have been traditionally the most commonly used to compensate international assignees. Assignees on a home-based approach retain their home-country salary and receive a suite of allowances and premiums designed to cover the costs linked to expatriation. The equalization logic behind the balance sheet approach (no gain/no loss) encourages mobility by removing obstacles. Retaining the home-country salary facilitates repatriation. The balance sheet approach can, however, be costly. Many companies either look for alternatives or try to reduce the benefits and premiums included for less significant moves.

Other Solutions

Hybrid approaches attempt to combine the advantages of the home and host-based approaches. These often mean running a balance sheet calculation and comparing the results with the host market salary to determine what solution would make sense. A hybrid approach can work well for a small assignee population but it can generate inconsistencies when companies expand globally, and the assignee population grows significantly.

Finally, some companies rely on international compensation structures that do not use the host and the home structures at all. These might utilize the average salary in a selected group of high-paying countries where the companies operate. This approach facilitates mobility for global nomads and highly mobile employees. It is, however, often very expensive and doesn’t solve all assignment-related issues (e.g., currency issues, pension, taxation). It is typically used in specific industry sectors (e.g., energy and engineering) and for a few assignees (top level managers and global nomads.)

Step 2: Assessing assignment patterNs and business objectives

Assignment patterns

Are assignees moving between countries with similar salary levels, which would make the use of local or local plus easier or, on the contrary, are expatriates sent to host countries with different pay and benefits structures (low-paying to high-paying, or high-paying to low-paying country moves)? Are moves for a fixed duration – e.g., assignments lasting one to five years – or will the company rely on permanent transfers with no guarantee of repatriation?

Assignee Population

Are assignees coming mainly from the headquarter countries (typical for early stages of globalization) or is the number of third-country nationals already significant? A growing number of multinational companies report that the number of moves between emerging markets (“lateral moves”) is catching up with or exceeding the number from the headquarters, prompting a review of compensation approaches.

Are some assignees becoming true global nomads who move from country to country without returning home during their career? Employees, and especially the younger generations, are becoming much more mobile, but only a minority would be global nomads. These assignees are usually top-level managers, experts with unique skills, or globally mobile talent sourced from small or emerging countries where the absence of career opportunities perspective would preclude repatriation perspectives.

Company's philosophy and sector

Some industry sectors like services and finances relocate employees between major regional and financial hubs which facilitate the use of local approach, whereas energy and engineering companies transferred employees to hardship locations are a key feature of the business – and requires comprehensive expatriation packages often based on balance sheets and international salary structures.

Step 3: Assess segmentation needs

An increasing number of companies rely on expatriate policy segmentation to reconcile the cost control versus international expansion dilemma – how to have the same number of assignments or more without increasing the budget dedicated to international mobility. Segmentation means reallocating part of the budget to business critical assignees and limits the costs of non-essential moves.

Some of the commonly used assignment categories include strategic moves (business-critical), developmental moves (which benefit both the company and the employee), and self-requested move (requested by the employee but not essential to the business).

A consistent policy segmentation approach allows HR teams to present business cases or assignment options to management and provide a clearer understanding of the cost and business implications of relocation for different assignees.

It could also help manage exceptions into a well-defined framework based on a consistent talent management approach, as opposed to ad hoc deals.

Example of segmented compensation approach: the four-box model

Want to learn more about Expatriate Compensation Approaches?

Make sure to download our free guide to understanding compensation strategies

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Events and training Throughout the year, Mercer conducts a variety of free webinars and paid training sessions, online and in person, to help you keep pace with the evolution of international talent mobility and global workforce management.

Policy benchmarking Gain insights into your peers' international assignment programs and global mobility policies and practices. Participate in Mercer surveys to access unique benchmarking solutions.

Need help? Whether your organization is looking to create a global mobility program, enhance the one you currently have, or get answers to any issues or concern you're facing, we can help.

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The Right Way to Manage Expats

• J. Stewart Black
• Hal Gregersen

Sending executives abroad is expensive, but most companies don’t get much back for their money. Those that do follow three practices.

In today’s global economy, having a workforce that is fluent in the ways of the world isn’t a luxury. It’s a competitive necessity. No wonder nearly 80 % of midsize and large companies currently send professionals abroad—and 45 % plan to increase the number they have on assignment.

• JB J. Stewart Black is a professor of global leadership and strategy at INSEAD and a coauthor of Competing in and with China: Implications and Strategies for Western Business Executives (Thinkers50). Email: [email protected]
• Hal Gregersen is a Senior Lecturer in Leadership and Innovation at the MIT Sloan School of Management , a globally recognized expert in navigating rapid change, and a Thinkers50 ranked management thinker. He is the author of Questions Are the Answer: A Breakthrough Approach to Your Most Vexing Problems at Work and in Life and the coauthor of The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators .

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International Assignment Management: Expatriate Policy and Procedure

Our philosophy.

[Company Name] is a global company that operates over X offices worldwide. The transfer of employees between the various [Company Name] units, from headquarters to subsidiaries, between subsidiaries and from subsidiaries to headquarters, enables our company to better utilize its human resources, while offering efficient support to its business activity. In addition, it enables our executives and professionals to gain international business experience and opens up wider promotion paths.

The objective of this procedure is to define the processes, terms and conditions for transferring personnel from one [Company Name] unit to another and to provide guidelines for the benefit and relocation package for such employees. While differing laws in various countries may influence some aspects of the policy implementation, the basic guidelines are to be maintained in order to ensure a unified company policy.

The effective date of this policy is [Insert Date].

Definitions

Expatriate (Hereinafter “Ex-pat”) - An employee who is relocated from his/her home country to work at one of the subsidiaries of [Company Name] abroad or at Corporate Headquarters for a period exceeding one year.

Host country/ subsidiary - The receiving or destination country/subsidiary of the Ex-pat.

Home country/subsidiary - Originating country/subsidiary of the Ex-pat.

General Approval process for an Ex-pat assignment

The transfer of an employee from headquarters to a subsidiary, between subsidiaries or from a subsidiary to headquarters, is contingent upon joint discussions held between the divisions and the subsidiaries.

The Ex-pat position must be granted budgetary approval from the division and approved by the Corporate HR Forum. The host country has veto power over the corporate offer for all candidates except those in top management positions. In January of each year, the HR Forum will convene in order to discuss general Ex-pat recruitment needs for the upcoming year.

Contract approval process

Contracts of subsidiary management team are coordinated and approved in advance by the relevant Co-President and Corporate VP of HR. The rest of the Ex-pat’s contract is coordinated and approved in advance by the Corporate VP of HR.

The employment offer, including salary, benefits and job description, is generated on behalf of the subsidiary by the host country HR Manager and/or relevant VP.

When an Ex-pat relocates from one subsidiary to another, the receiving HR Manager will transfer the offer to the HR Manager in the Home Subsidiary and to the Corporate VP of HR.

As a rule, the entire process of transferring employees between the various company units (subsidiaries/headquarters) under Ex-pat terms is coordinated by Corporate VP of HR (as described above).

Standard Assignment Period

Ex-pat status is restricted to a period of up to 5 years. After this period, the employee is no longer employed under Ex-pat terms and conditions, but rather, under local terms. Exceptions are granted under very limited circumstances and require written explanations and approval of the subsidiary president and the Corporate VP of HR. Under no circumstances will the extension of Ex-pat status exceed an additional 3 years.

Transferring from one subsidiary to another is considered a new assignment in this context.

Terms of Assignment Termination

Completion of the Ex-pat assignment requires a ninety (90) day mutual notice period. If the Ex-pat assignment is termi­nated by the company for any reason other than a breach of the employment agreement on the part of the employee, s/he will be relocated to his/her home country in accordance with the company’s then-current relocation policy and will be exempt from repaying the standing relocation loan

Relocation Allowance

In the event that the employee resigns from the company or from the assignment, he is required to repay the relocation allowance on a pro-rata basis as well as take responsibility for household moving arrangement and expenses (excluding countries in which the law requires the Company to cover Ex-pat relocation expenses, even in case of employee resignation).

Budget allocation

All Ex-pat benefits will be allocated to the host country budget.

Commitment to Hiring the Ex-pat When His/Her Assignment is Completed

[Company Name] makes no commitment to re-hire the employee in his/her home country after his/her Ex-pat assignment is completed.

However, should the employee work in his host country during the ninety (90) day notice period (see above), the employee will be granted the right to work for three (3) months at the company in the Home country on local terms as determined by the home country HR manager on a case-by-case basis.

Commitment to return to the company upon assignment completion

The employee makes no commitment to return to the company upon completion of his/her assignment. However, s/he may be eligible for repatriation benefits (see “Repatriation Policy & Benefits”) upon return to his/her home country.

Spouse Status/Domestic Partners

[Company Name] will extend spouse status to domestic partners. Ex-pat terms apply to the employee, his/her spouse or domestic partner and their children.

Salary Review

Salary review takes place in accordance with the host subsidiaries policy as approved by corporate policy.

The Ex-pat is responsible for paying any tax liability incurred from benefits and compensation received in both his/her host and home countries (excluding countries in which the employer is required to deduct the taxes from all paid benefits).

Option Plan

Options are granted, if applicable, in accordance with host country policy.

Retention of Home Country Social Benefits

The company will cease to fund payment to retirement plans for Ex-Pats for the period of employment in one of the Company subsidiaries. Following are details on the implementation of the decision:

Ex-Pats Recruited from within [Company Name]

Upon the termination of employee-employer relations with [Company Name] – prior to his relocation to the subsidiary, the Ex-Pat will sign an employment termination agreement with [Company Name]. The amounts accumulated by the employee in various funds, will be released

Ex-Pats Recruited from outside of the Company

In accordance with the above-mentioned policy, no amounts will be allocated to retirement and national insurance to Ex-pats recruited from outside the company as of January 2004.

Ex-Pats Currently in Office

Employees will be granted the option to choose between the termination of employer-employee relations and between the continued payments of funds, up to a ceiling of 5 years after their departure to the host subsidiary – a time in which, according to the procedure, the employees cease to carry Ex-Pat status.

The termination of employee-employer relations, in this context, is accompanied by the release of accumulated funds only, with no supplement. Any employee decision (continued payment of funds or termination of relations) will be backed by a document signed by the employee.

Health Insurance

The Employee and his immediate family are covered by local or international health insurance as per the host country’s policy.

Performance Appraisal

In accordance with host country policy (as per corporate policy).

Recruitment and Selection of Ex-pats

Ex-pat recruitment is conducted either internally (i.e. within the company) or externally.

Internal Recruitment

The recruitment process must include a professional recommendation from the division/unit/subsidiary and personality assessment of the employee and his/her spouse conducted by the HR manager (in Corporate, HR manager of the relevant Division or by the Recruitment manager) and/or by an external assessment agency.

Once a final decision is made in the home country, the internal candidate will be interviewed at the host country.

Should the host country HR manager decide to hire, s/he will issue a contract to the employee in cooperation with the HR manager in the home country.

The home country HR manager is charged with care of the administrative processes surrounding the relocation of the employee, including the signing of a non-paid-vacation/leave of absence agreement, which identifies preservation of rights benefits but otherwise confirms the lack of a contractual relationship between the home country company and the employee.

External Recruitment at Corporate

In cases where there is no suitable internal candidate the Corporate Recruitment manager in cooperation with the HR Manager of the relevant division, will manage the search.

The external candidate will be interviewed by corporate managers and by the HR department. Assuming the candidate makes a positive impression, an external personality and capabilities assessment process of both the candidate and his/her spouse will be performed by a specialized agency.

Once Corporate makes positive recommendation, the candidate will be interviewed by the host country.

An acceptance by the Subsidiary will result in either:

• The Subsidiary offering the position to the candidate and employing him/her from day one (the preferred option), or:
• The candidate signing a temporary agreement with Corporate until completion of the training period and/or residency visa procedures. In this case, a secondary employment agreement for the assignment will also be signed with the Subsidiary.

Engagement in an Ex-pat employment assignment is contingent on successful attainment of work authorization in the host country. The process for being granted a work visa differs with the country of destination. Company is responsible for supporting the application for a work visa for the employee and a residence visa for the family.

It is the responsibility of the host country HR manager in coordination with the home country HR manager to take care of the process.

Family Visas

[Company Name] is obliged to support the application of a residency visa only for the Ex-pat’s immediate family (for this matter, the term “immediate family” relates to the spouse and children of the Ex-pat).

The employee has the responsibility to monitor the accuracy and expiration dates of visa documentation for himself and his/her family in order to maintain a lawful working status in the host country.

Language studies

The allotment of English/local language lessons will be approved in accordance with each Subsidiary’s existing policy.

Cross-Cultural Orientation

Written material containing informative details relevant to the country of destination will be delivered to the employee by the HR Department. A complementary cross-cultural workshop will be also coordinated for the employee, his/her spouse and their adult children. The workshop will concentrate on the psychological/emotional stages that the employee and his/her family are likely to face during the transition to a foreign country.

The workshop will be coordinated by the HR Department in the home country once the contract is signed.

Preview Trip

The candidate who expresses a sincere intention to accept the Ex-pat assignment and his/her spouse/domestic partner (if they have school age children) are eligible for a preview trip.

The preview trip is approved for up to 5 working days. It is recommended that the preview trip be combined with a business trip.

The company will pay for round trip economy airfares to the host country and per-diem according to the home country’s per-diem travel policy.

The potential candidate should notify the host country’s HR manager re: his/her preview trip schedule so that proper arrangements can be made.

The potential candidate will meet with his/her direct manager and related business VP’s or managers to learn more about the scope of the job as well as the host country milieu.

House hunting should be done during the preview trip. If possible, it is recommended that an apartment be identified so paperwork can be processed and the apartment readied for when the Ex-pat’s arrival to start his/her assignment.

Visits to potential schools should also take place during the preview trip.

Temporary Housing (at home country)

Expats will be allowed to choose between using their 30 days of hotel and rented car right in their Home Country or at the Host Country, as long as they don't exceed the 30 days period limit.

Special Vacation Days for Arrangement

The Ex-pat is eligible for 5 days vacation leave, in addition to the annual leave, before going on the assignment, in order to arrange his personal matters.

Traveling and Settling-in Policy & Benefits

Cargo Shipment

The company pays for a 20-foot container, insured for up to $40K (US).

It is the responsibility of the host country HR manager to coordinate cargo shipment, except in the case of Ex-pats departing or repatriating from and to Corporate. In such cases, the Customer Department of the Operations Division coordinates the shipment.

For Ex-pats moving from one subsidiary to another, on a sequential assignment, the Repatriation Policy and Benefits re: cargo shipment, shall apply.

No payments will be allocated for the storage of freight for longer than the period required to release the container from Customs.

The company will provide the Ex-pat with a Relocation Allowance to assist with miscellaneous transition expenses. The amount of the allowance will be $3K (US) for singles and $4K (US) for couples with or without children.

The payment will be provided in the home country or upon arrival in the host country as per local procedures.

If the Ex-pat resigns before completing two years of his/her assignment, he/she will be required to pay back the Relocation Allowance to the company on a pro-rata basis.

Household Goods Loan- Company Inc.

Upon arrival at Company Inc., the Ex-pat is eligible to apply for an additional no interest loan of up to $2.5K (US) to assist with miscellaneous costs.

The loan is repaid as per subsidiary policy.

Temporary Housing and Rental Car

Upon arrival at the country of destination, the company will pay for car rental and hotel accommodations for a period of up to 30 days. During this time the employee is expected to make longer term automobile and housing arrangements.

Special Vacation Days for initial settling

Upon arrival to new country the Ex-pat is eligible for 5 days vacation leave, in addition to the annual leave, for arranging his personal matters.

At-Post Policy & Benefits

Annual Leave- as per host country policy.

Holidays and Leave - as per host country policy.

Housing- as per host country policy.

Car- as per host country policy.

Ex-pats are eligible for home leave after each year, as long as they have a balance of one-year service commitment in the host country upon return from home leave.

Home Leave Duration

The duration of the home leave will be up to 21 days, as listed below:

5 days – Training and meetings that will be regarded as working days at Corporate headquarters or at the Home Subsidiary headquarters. In case there is no need for the employee to attend any business meetings/training or if his home country is far from subsidiary headquarters, these 5 days, if taken, will be on the account of the employee’s annual vacation days allotment together with the other 10 days mentioned below.

6 days – Weekends

10 days – Annual vacation days

[Company Name] will cover the round-trip coach fare from and to the country of origin for up to a 21-day visit by the employee and his/her family. In the event that the employee’s family extends its visit beyond the 21-day period and in the event that this extension incurs additional costs to the tickets, these costs will be borne by the employee.

Home Leave Expenses

The Ex-pat is eligible for a special (taxable) allowance towards expenses during home leave:

Senior Subsidiary managers (Presidents/Vice Presidents) will be eligible for $2,000 (US). They are also eligible to a car for their use during the working days they are requested to work during their home leave period, up to a 5 days limit. Any other car expenses during the Home Leave period are covered by the $2,000 that Senior Subsidiary Managers are entitled to as Home Leave Expenses.

Other Ex-pats will be eligible for $1,300 (US).

Application for Home Leave

Ex-pats will fill the home leave application form and obtain direct manager’s, relevant VP’S and host country HR manager’s approvals prior to taking the leave. This process should take place 3 months prior to the starting date of the planned home leave.

Children’s Education

[Company Name] pays for children’s education from Kindergarten through Secondary School or High School Grade 12 equivalent or from age 2 to age 18, depending on local practice.

In countries where the local school system is inappropriate or in an unfamiliar language, International/ American/ British/ Canadian School may be an appropriate alternative.

Educational expenses supported by the company include the following:

• School registration fee
• Tuition fee
• School bus transportation fee
• The company does not pay for the following:
• Summer school
• Summer camp
• School field trip

Academic Studies

Ex-pats (who are not subsidiary management members) will have the option to apply for academic studies, with a subsidy of the company, according to the local subsidiary’s terms and procedures.

Ex-pats who are subsidiary management members (VP’s and Branch managers) will have the option to apply for academic studies, with a subsidy of the company (based on the subsidiary terms and procedure). The applications will be submitted with the subsidiary recommendations to Corporate HR VP for final approval

Family Member in Home Country

The company will provide a round trip economy air ticket for the shortest route to the host country as per the home leave policy of frequency of the Ex-pat, for family member/s who continue to reside in the home country. Family member/s in this case includes sons and/or daughters of the Ex-pat until age 18 or completion of mandatory military service.

Death in the Family

In the event there is a death in the Ex-pat’s family or the Ex-pat’s spouse’s family the company will pay for round trip economy air tickets to the Ex-pat’s home country for either the Ex-pat or his/her spouse. The Ex-pat is entitled to 7 working days paid leave under such circumstances. For the matter of this paragraph, “Family” is defined as: father, mother, spouse, son, daughter, brother or sister.

Tax Preparation Assistance

The Ex-pat is eligible for tax consultation reimbursement as per host country policy.

Repatriation Policy & Benefits

The benefits set forth below will be valid for a period of up to three months after the date of assignment completion and only in conjunction with a bona fide move of a permanent nature back to the employee’s country of origin or to a subsequent assignment in another subsidiary.

Upon assignment completion the company will arrange and pay for the Ex-pat’s cargo shipment. An Ex-pat with 3 or more children will be eligible for a 40-foot container insured for up to $40K (US). An Ex-pat with fewer than 3 children is eligible for a 20-foot container, insured for the amount of up to $40K (US).

It is the responsibility of the originating country HR manager to coordinate the shipment, except in the case of Ex-pats repatriating to Corporate. In this case, the Customer Department of the Operations Division coordinates the shipping.

No payments will be allocated for the storage of freight in the host or home country for a period exceeding that required to release the container from Customs.

Special Vacation Days for Arrangement (Host Country).

The Ex-pat is eligible for 5 days vacation leave, in addition to the annual leave for arranging his personal matters, before departing to his/her home country or before going on his/her next Ex-pat assignment.

Temporary Housing and Rental Car (Host Country)

The company will pay for car rental and hotel accommodations for a period of up to 12 days if needed, at the employee’s regular location, prior to the Ex-pat departure from the host country. The host country HR manager is responsible for the coordination of these arrangements.

Benefits for Employees Returning to Work at Company in Home Country

The employee is eligible for 5 days vacation leave, in addition to the annual leave, to assist with his/her settling-in arrangements.

Repatriation Grant

The company will reimburse the employee for up to $1,000 (US), as per receipts, to help with repatriation expenses. “Repatriation Expenses” include such expenses as temporary accommodations, rental cars and tutoring.

Responsibility

This procedure may be changed occasionally. All changes require the approval of the Corporate VP Human Resources.

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Expatriate Management (Best Practice Tips)

Anne morris.

• 11 April 2020

IN THIS SECTION

Managing expatriates is a multi-stage process, where each stage can be crucial to the overall success of an overseas assignment for your business, as well as the individual assignee, on both a personal and professional basis.

The following guide looks at best practice for employers when deploying individuals overseas, including some important practical tips for expatriate management, from preparation through to repatriation.

Preparing expatriates for an overseas assignment

The management of overseas assignments can be a complex process for employers and HR personnel to get right, especially when trying to balance the cost of an assignment within the shifting demands of the global business environment against the individual needs of the expatriate.

By thoroughly preparing in advance of the assignment, and by properly investing in the necessary processes from the outset, you can help to minimise wasted expenditure and unnecessary costs at a later date. This can also help to avoid any loss of revenue, and even the potential loss of top global talent from within your organisation, resulting from a failed assignment.

The level of preparation required in the expatriate management process can vary depending on the nature and length of the overseas assignment, the location of the assignment, the number of assignees involved and the individual personal circumstances of each assignee.

In broad terms, however, your pre-assignment expatriate management process should include the following.

A comprehensive assessment of the nature and length of the overseas assignment needed to meet your business objectives, having regard to the flexibility offered by various different types of assignment, from business trips to permanent relocation. This process should also be carried out in the context of any prospective candidates, their level of experience and their personal circumstances. For the novice expatriate, the option of commuter and short-term assignments may be a sensible starting point.

The provision of an adequate compensation package to adequately incentivise prospective overseas assignees, attracting the best available candidates. This should include a suitable salary that matches or exceeds the typical salary that an employee would get paid in their home country for doing the same job, together with relocation costs and a cost of living allowance to reflect any additional daily expenditure in the host location.

Implement a thorough selection and vetting procedure for prospective assignees, ensuring they are suitably qualified and capable of undertaking the assignment in question. Each assignment will present its own unique challenges and demands, so you will need to match the right person to the job, having regard to the individual needs of the assignee in the context of the specific assignment and host location. This could include formal and informal assessments of their capabilities, career aspirations, physical and mental wellbeing, and whether they are emotionally equipped to withstand any cultural adjustment.

A full assessment of any travel and legal risks prior to deployment tailored to the specific assignment, the host destination and the individual assignee(s), ensuring that you fully research the country and region in which the assignee will be working. You should also keep abreast of any imminent changes that may affect the assignment or assignee prior to their deployment.

A pre-deployment programme of training and education for overseas assignees and their families, where applicable, about the host destination. This could include cross-cultural training and language classes, as well practical information about the region or city in terms of transport, education, recreation, healthcare services, and any safety and security issues. For those travelling to high-risk destinations this should also include security briefings and training on hostile environment awareness.

Supporting expatriates during an overseas assignment

Even with thorough preparation prior to the start of an overseas assignment and through to deployment, the provision of ongoing support for an expatriate during the lifecycle of their assignment can be key to its’ overall success.

A human-centric approach should be taken to expatriate management, where absent the right personal and professional support for your overseas assignees and their families whilst abroad, this could seriously affect the outcome.

The level of support required can again vary depending on the nature and length of the overseas assignment, its’ location t, the number of assignees involved and the personal circumstances of each assignee.

In broad terms, however, your active-assignment expatriate management process should include the following:

The provision of an ongoing benefit and support program to help assignees and their families integrate into their host destination. This could include local support, where you could consider outsourcing this role to a specialist who can help novice expats to settle into their new surroundings and signpost them to different services. You should also provide key HR contacts back home to address any personal or professional problems, or in the event of an emergency.

Ensure a positive employee experience, where psychological wellbeing and happiness while on an overseas assignment is strongly linked to expatriate success. This could include the use of informal introductions, employee-centric activities and social networking events on the assignee’s arrival in the host destination to help them integrate with their new work colleagues and other ex-pat families within your organisation.

Maintaining regular contact with your overseas assignees, ensuring effective coordination between management and HR, as well as any local support team in the host destination. Through clear communication you can help to pre-empt any problems that may lead to job dissatisfaction or difficulties with cultural integration. This can also help assignees to keep abreast of any workplace changes and not feel disconnected or isolated.

The provision of quality healthcare for maintaining the physical and mental health of your employees and their families. You should ensure that you opt for an international health insurance plan that offers the assistance and protection your assignee’s may need, including access to a 24-hour helpline that can be used to answer any medical or security questions, or facilitate the provision of emergency assistance, at a time when an assignee’s usual points of contact would not be available.

Remain fully informed of any risk factors that may impact on the assignment, where even relatively safe destinations can quickly become high-risk regions due to health, safety, security, political or social reasons. You should also be able to effectively communicate any such changes and important information to assignees working remotely, especially in relation to health and safety.

The effective use of technology, including data and analytics tools to make informed management decisions in respect of overseas assignments, from cost control to key performance indicators. Further, by providing overseas assignees with the right equipment and devices to do their job can help to maximise productivity, monitor their progress and even measure the assignee experience. This should include the provision of secure wireless networks, good connectivity and up-to-date software.

Making provision for expatriates following an overseas assignment

Having successfully completed an overseas assignment, this is not the end of the process for either you or the expatriate. The repatriation process, even though this is the last step in the expatriation lifecycle, can be just as challenging as the deployment process. In many cases this will involve a process of practical, mental and emotional readjustment for the assignee, as well as their families.

The level of support required for expatriates following an overseas assignment can vary depending on how long an assignee has spent abroad, the extent of any family ties back home and the nature of any role that they will be returning to.

In broad terms, however, your post-assignment expatriate management process should include the following:

The provision of an adequate repatriation package to adequately incentivise overseas assignees to return home to work for your organisation. This should include the potential for career progression or a suitably senior role to return to home to, ensuring that you retain your top talent and benefit from their overseas experience.

The provision of other initiatives to alleviate the risk of losing key employees, including a suitable relocation package following a long-term overseas assignment to enable an employee to easily move back to the UK. The issue of costs must always be balanced against the need to retain talent to ensure the continuity and success of your business for the future. Given their international experience, expatriates are open to being headhunted by your competitors, so the cost of financial incentives must be weighed against the risk of losing them altogether.

The use of debriefing interviews to capture lessons learned from the overseas assignment, making the most of any invaluable insight and new industry knowledge the assignee has gained from their experience abroad. This will help you to develop your business back in the UK and stay ahead of your competitors. This will also give you the opportunity to explore any career aspirations and potential options available to your assignee, as well as the possibility of any future overseas assignments.

Practical tips for effective expatriate management

Although statistically there can be a high failure rate for overseas assignments, the risk of an unsuccessful assignment can be minimised by applying the following practical tips to the expatriate management process:

• Carefully consider the assignment in the context of your business goals, including the nature of the assignment and number of assignees needed Offer adequate compensation packages to attract the best available candidates, including relocation and costs of living allowances.
• Implement a thorough selection and vetting procedure for prospective assignees, ensuring they are suitably qualified and capable of undertaking the assignment in question in the host destination.
• Thoroughly research the host destination for any travel and security risks, keeping abreast of any imminent changes that may affect the assignment or assignee.
• Thoroughly prepare your assignee for deployment through a programme of pre-deployment training, including their families where applicable Invest in an ongoing benefit and support program to help assignees and their families integrate into their host destination.
• Encourage a positive employee experience through the use of informal introductions with ex-pat families, employee-centric activities and social networking events on the assignee’s arrival in the host destination.
• Maintain regular contact with your overseas assignee to help pre-empt any problems and avoid any feelings of isolation.
• Remain up-to-date with any changes in the host destination that may affect the assignment or assignee.
• Provide adequate healthcare, including access to a 24-hour helpline and the provision of emergency assistance where needed.
• Provide adequate equipment and up-to-date ways of increasing productivity, monitoring performance and staying connected.
• Provide adequate repatriation packages to incentivise assignees to return to work for you, including the potential for career progression or a suitably senior role, as well as any necessary relocation package.
• Utilise debriefing interviews to capture lessons learned from the overseas assignment and explore potential career options available to the expatriate, including the possibility of further overseas assignments.

Need assistance?

Seeking expert advice in expatriate management is often money well spent. The cost of sending employees abroad can already be significant, but the risk of losing that investment through either a failed assignment or loss of the assignee altogether from within your organisation should be weighed in the balance.

Getting it right can result in an increase in revenue, the retention of talent and the ability to repeat the process successfully time and time again.

DavidsonMorris are employer solutions lawyers with specialist experience in global mobility and supporting businesses with their international workforce needs. For advice and help with your expat management, speak to us .

Expatriate  management  FAQs

What is expatriate in hrm.

Expatriate in Human Resource Management (HRM), commonly shortened to expat, is someone living in a country different to their own for the purposes of undertaking a short or long-term overseas work assignment. This can include employees sent to manage a new office or set up a new location.

How do you manage an expatriate employee?

Managing an expatriate employee is a multi-stage process, where each stage can be crucial to the overall success of an overseas assignment for both your business and the individual assignee. Effective expatriate management should run throughout the lifecycle of an assignment, from pre-deployment preparation through to repatriation when the employee returns back home.

How do you manage expatriate failure?

In instances where an expatriate is inadequately prepared for a short or long-term overseas assignment, or where the language and cultural differences cannot be overcome, this can often lead to early repatriation. By providing support on a personal and professional level both prior to, during and after the assignment, the risk of expatriate failure can be minimised.

Last updated: 11 April 2020

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Compensation and Benefits: Essentials of International Assignment Management

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Internationalization became an essential strategic dimension for companies to ensure profitable growth. International assignments play an important role to implement this strategy. As a consequence the number of international assignees is growing year by year; they work as interface manager between headquarters and branch office, as cultural ambassador, or as technical specialist to transfer knowledge. For ambitious and open candidates, a position in a foreign country and in a different culture can be an interesting step to further develop their professional career. International assignment management first of all needs a policy framework, defining the compensation and benefit package, especially the typical assignment allowances depending on distance to the home country and hardship of the host country. The administration of international assignments secondly requires standardized processes for all phases of an assignment, from selection to reintegration and with clear allocation of roles and responsibilities between all human resources partners involved. Organizations exchanging bigger numbers of specialists and executives between several countries work with centralized assignment management teams, who cooperate with local HR in the host countries and often use external partners for relocation, social security, payroll, and taxation to manage this complex task.

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Czajor, J. (2016). Compensation and Benefits: Essentials of International Assignment Management. In: Zeuch, M. (eds) Handbook of Human Resources Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-44152-7_73

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Sustainable Expatriate Management: Rethinking International Assignments

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This article explores the concept of sustainable expatriate management, which incorporates environmental, social, and economic factors, and how it can be implemented in a corporate context. We argue that with increasing societal and environmental issues, it is crucial to revisit the overall global philosophy and policies, including the expatriate life cycle. We apply the UN Sustainable Development Goals (SDGs) framework to examine how businesses can remodel their practices to become more resilient. Furthermore, based on a systematic literature review, we identified gaps in research on the integration of environmental factors into sustainable expatriate management. Lastly, this article presents a model for understanding the three layers of sustainability in expatriate management, which can assist practitioners in identifying blind spots and material topics.

Introduction

According to Ghauri, Strange and Cooke (2021) , the global business environment has improved awareness of sustainability as a ‘new reality’. Furthermore, addressing the UN Sustainable Development Goals (SDGs) in a corporate context is becoming increasingly popular (Liou & Rao-Nicholson , 2021; Montiel , Cuervo-Cazurra , Park , Antolín-López , & Husted , 2021; van Tulder , Rodrigues , Mirza , & Sexsmith , 2021) . Although “sustainable” and “green” global mobility are widely discussed concepts, they have not yet been widely integrated into sustainable expatriate management.

However, due to its nature, expatriate management is exposed to various societal and environmental issues that are forcing the field to move towards more sustainability-oriented practices. This implies that decision- and policy-makers should revisit the overall global philosophy, including policies and practices. Therefore, stakeholders should reevaluate topics like business trip policies, health, and equality, as well as other facets of the international assignment cycle (Fan , Zhu , Huang , & Kumar , 2021) . Consequently, in this paper, we will outline how practitioners can rethink expatriate management using a sustainable development lens and how this shift in perspective provides fertile ground to redesign the expatriate life cycle.

Inspired by the “strong sustainability” or embedded systems view (Giddings , Hopwood , & O’Brien , 2002) , we define sustainable expatriate management as any employee-related cross-border (work) activity, which, by its design, considers planetary and societal boundaries and acknowledges the embeddedness of economic impacts within this larger framework (see Figure 1 for clarification).

Source: Own illustration based on Giddings et al. (2002) , p. 192.

Theoretical Framework: Sustainable Development Goals

According to Finaccord’s (2019) latest research, in 2017, there were 66.2 million expatriates working abroad globally, and forecasts for 2021 expect 87.5 million in total. Therefore, this topic affects a relatively large amount of people moving across borders. Nowadays, increasing environmental, social, and economic crises are challenging global business practices. According to the World Economic Forum Global Risks Report, the risks that are most likely and will have the most impact are predominantly environmental risks (e.g., climate action failure, human environmental damage, biodiversity loss, natural degradation, extreme weather, natural resources crises) (World Economic Forum , 2022) . These are expected to affect multinational enterprises’ (MNEs) activities on a global scale.

As the complex, or so-called wicked, problems of our time are interconnected, it is crucial to avoid a siloed perspective of these risk categories. Therefore, we provide a holistic, SDG-focused perspective that addresses the question of how MNEs’ business practices need to be remodeled to become more resilient. We view business sustainability in terms of environmental, social, and economic systems and consequently apply the UN Sustainable Development Goals “wedding cake” framework (Stockholm Resilience Centre , 2018) . This model implies that the environmental, social, and economic layers are interdependent, as well as their respective sublevel SDGs, as indicated in Figure 2 .

Source: Own illustration based on Stockholm Resilience Centre , 2018

Based on Figure 2 , the biosphere/environment represents the foundation of economies and societies and, therefore, the general context in which all other SDGs must be placed. Society cannot survive without the environment, which is why society must pay attention to resources and the preservation of habitats. Such a conceptualization adopts an integrated and interconnected view of social, economic, and ecological development to ensure the future viability of the planet and its living species.

Three Layers of Sustainability in Expatriate Management: Identifying Blind Spots

Based on a systematic literature review of 238 articles clustered according to the 17 Sustainable Development Goals and their respective layers, environment/biosphere, society, and economy, it is evident that research in this field has been increasing in recent years. Furthermore, it shows that the expatriate management literature is dominated by social issues (80%), followed by economic literature (19%), and work that focuses on the environment/biosphere (1%) (Ommen , Schmitz , & Karlshaus , 2022) . Considering that expatriate management is a part of international HRM literature, it is unsurprising that the social category dominates; however given the growing importance of the climate crisis discourse, it is surprising that this has not yet been addressed in research and practice.

This social literature is dominated by articles addressing SDG 5 “Gender Equality” and SDG 3 “Good Health and Well-being” as well as limited literature focused on SDG 16 “Peace, Justice, Strong Institutions”. In the economic category, the literature most often addresses SDG 10 “Reduced Inequalities” and SDG 8 “Decent Work and Economic Growth”, followed by SDG 17 “Partnership for the Goals” as an overarching category. Finally, the ecological category is only represented in one article addressing SDG 13 “Climate Action”, which has only recently been published (Ommen et al. , 2022) (see Table 1 for an overview).

Source: Own illustration; for a full list of references, see Ommen et al. , 2022 , and the Appendix to the article. *“–” indicates SDG cases for which blind spots were not identified in this study

What Is Material for Sustainability in Expatriate Management?

In the sustainability reporting discourse, understanding materiality (i.e., identifying elements of utmost importance to a company’s sustainability challenges) has become increasingly important as part of the international ESG factors: environment, society, and governance. Furthermore, organizations attribute different levels of importance to specific environmental or social factors based on the sectors they operate in.

Considering the essential or material topics, MNEs need to first reduce or avoid their negative impacts (e.g., CO 2 emissions etc.) and also increase their positive impacts (e.g., fostering intercultural ties). By doing so, MNEs can significantly reduce the respective risks to which they are exposed.

The emission of greenhouse gases (GHG) is among expatriate management’s negative material environmental impacts, due to flights, shipments, hotel stays, and local transportation (SDG 13). These also include water and land use due to construction activities (SDG 6, 15), and waste management that should be reconsidered from an environmental perspective.

From a social perspective, negative impacts on equal opportunities can be caused by disparities in pay and promotion opportunities (SDG 5), working conditions, and health issues related to increasing travel activities and continuous readjustment (SDG 3). Furthermore, expatriates working in hostile environments or dangerous locations need adequate protection mechanisms and respective codes of conduct (SDG 16). Finally, integration into local communities during long-term stays might become relevant for some expatriates and their families (SDG 11).

From an economic perspective, a positive impact could be generated by supporting the local economy (SDG 8). However, negative impacts can arise through unequal opportunities because of the different treatment of expatriates and locals (SDG 10). To reduce this, companies should ensure responsible local consumption and circular use of respective household appliances or furniture in apartments (SDG 12).

In sum, MNEs should consider the following Sustainable Development Goals to reduce their negative impact and increase their positive impact:

Environmental : SDG 13 Climate Action

Social : SDG 3 Good Health and Well-being, SDG 5 Gender Equality, SDG 16 Peace, Justice and Strong Institutions, SDG 11 Sustainable Cities and Communities

Economic : SDG 8 Decent Work and Economic Growth, SDG 10 Reduced Inequalities, SDG 12 Responsible Consumption and Production

Sustainable Expatriate Management: Actionable Recommendations

The above discussion suggests that companies can derive a specific prioritized agenda. Inspired by the SDG Compass (Global Reporting Initiative , United Nations Global Compact , & WBCSD , 2015) , we advance these considerations by sharing how MNEs can best address the SDGs in sustainable expatriate management. For an overview of selected ideas for each of the SDGs, please also see Table 2 .

Source: Own illustration; based on selected measures of the SDG Compass Business Indicators; Note: Not all themes will apply to all types of MNEs or all sectors equally. As expatriates are usually relatively privileged, we suggest that they should use their privileged status to support disadvantaged groups and individuals to meet SDGs.

Defining Priorities

First, each of the material topics needs to be evaluated for each company. Certain topics may be more or less relevant in a corporate context, depending on the respective sector. Taking the example of GHG emissions (SDG 13), most emissions come from consultants on regular short-term assignments or business commuting trips if the company is in the service delivery sector. Therefore, these emissions play a more significant role for the company.

In terms of gender equality (SDG 5), a company should first investigate the share of women in their overall assignee population, including management positions. Based on a materiality matrix approach, respective stakeholders should evaluate their priorities alongside considering the judgment of material topics to attain a holistic perspective. By taking this approach for all topics associated with each SDG, MNEs can prioritize different materiality topics.

Setting Strategic Goals

To transform international assignments at the company level, MNEs need strategic concepts, including tools, to impact the defined materiality topics discussed above. There are different levers available to create change, including international assignment policy, processes, and culture. A policy can be designed so that assignees are nudged to not take air shipments, which cause significant GHG emissions (SDG 13). Further, by working with stakeholders across the supply chain, MNEs should implement key performance indicators (KPIs) to reduce negative impacts. To be effective, these should align with scientific facts and goals, such as the Paris Agreement’s target of limiting warming to 1.5°C.

Integrating the Goals

After defining their strategy and goals, MNEs should next address their implementation needs. This should particularly consider the sustainable consumption of mobility-related benefits (SDG 12), where there may need to be a mindset shift. Therefore, in the preparation phase, assignees need to be made aware of their choices. To do this effectively, departments taking care of international assignments may need to be trained on related topics while they consult assignees. Besides policy changes, MNEs should also implement profound changes, for example in terms of gender equality (SDG 5). Managers should be aware of equal selection principles and provide women with support mechanisms to ensure equity if they become the main caregiver for their children.

Measuring and Evaluating

Finally, MNEs need to track whether the implemented measures have been effective. This means measuring an international assignment program’s GHG emissions (SDG 13), environmental impact, gender share (SDG 5), and other measures. If the result does not meet the initial targets, the previous phases (strategy development, implementation) should be analyzed to see if adjustments are necessary. To better integrate the respective measurement indicators with those already existing in the corporate context, the SDG Compass website provides respective input categorized by SDG: https://sdgcompass.org/business-indicators/ .

Although there is awareness of pressing contemporary challenges in the field of expatriate management, action is still needed to decrease the negative impact on society, the economy, and the environment. Many concepts aim to address sustainability across borders. However, research has not yet produced a hands-on and integrated SDG framework for expatriate management. In this work, we aim to inspire and motivate practitioners to take action and further their sustainability ambitions. Although our paper is labeled rethinking expatriate management, the challenges outlined equally apply to inpatriates, repatriates, and other forms of cross-border assignments.

Companies need to be more aware of the environmental and social impacts of their programs and need to monitor processes to increase transparency across their vast service portfolios and associated supply chains. This is not only necessary because of sustainability but also to comply with legislative requirements (e.g., EU Taxonomy). However, corporate departments dealing with international assignments are not facing these challenges alone. They need to form partnerships (SDG 17) and collaborate with their vendors and internal stakeholders (enabling functions, corporate sustainability, procurements, etc.) to drive the much-needed change toward sustainable development.

About the Authors

Marina A. Schmitz serves as a Researcher and Lecturer at the Coca-Cola Chair of Sustainable Development at IEDC-Bled School of Management in Bled, Slovenia as well as CSR Expert/Senior Consultant at Polymundo AG in Heilbronn, Germany. She has worked as a Lecturer, Research Associate, and Project Manager at the Center for Advanced Sustainable Management (CASM) at the CBS International Business School in Cologne and the Chair of HRM and Asian Business at University of Goettingen. Enno Ommen is working in Bayer AG’s Sustainability Excellence Office at CropScience Division. He had previously worked in the area of Global Mobility for about 10 years, which equipped him with profound knowledge in the field of expatriate management. He studied International Business (BA) at CBS International Business School and International Human Resource Management (MSc) at Manchester Business School. Further, as one of Bayer AG’s Sustainability Champions, Enno is supporting the sustainable transformation of the company. Anja Karlshaus studied at the University of Cologne, Santa Clara University (USA), and the European Business School. In 2009, she took over the HRM professorship at CBS International Business School, later assumed the role of dean of the Business Administration faculty, before being appointed president. Moreover, she was previously employed at Dresdner Bank, Allianz and Commerzbank – being now member of various committees (Chamber of Industry and Commerce, City of Cologne, State of NRW). She researches sustainability, diversity, and agile HR.

Submitted : September 30, 2022 EDT

Accepted : April 06, 2023 EDT

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Looking for global talent in all the right places: a critical literature review of non-traditional expatriates. The International Journal of Human Resource Management , 27(7): 699–728. McPhail, R., & McNulty, Y. 2015. 'Oh, the places you won’t go as an LGBT expat!'A study of HRM’s duty of care to lesbian, gay, bisexual and transgender expatriates in dangerous locations. European Journal of International Management , 9(6): 737–765. McPhail, R., McNulty, Y., & Hutchings, K. 2016. Lesbian and gay expatriation: Opportunities, barriers and challenges for global mobility. The International Journal of Human Resource Management , 27(3): 382–406. Ng, E. S., & Sears, G. J. 2017. The glass ceiling in context: the influence of CEO gender, recruitment practices and firm internationalisation on the representation of women in management. Human Resource Management Journal , 27(1): 133–151. Pinto, L. H. F., Bader, B., & Schuster, T. 2017. Dangerous settings and risky international assignments. Journal of Global Mobility , 5(4): 342–347. Posthuma, R. A., Ramsey, J. R., Flores, G. L., Maertz, C., & Ahmed, R. O. 2019. A risk management model for research on expatriates in hostile work environments. The International Journal of Human Resource Management , 30(11): 1822–1838. Stoermer, S., Davies, S. E., Bahrisch, O., & Portniagin, F. 2017. For sensation’s sake: differences in female and male expatriates’ relocation willingness to dangerous countries based on sensation seeking. Journal of Global Mobility , 5(4): 374–390. Toh, S. M., & Denisi, A. S. 2005. A local perspective to expatriate success. Academy of Management Perspectives , 19(1): 132–146. van Bakel, M. 2019. It takes two to tango: a review of the empirical research on expatriate-local interactions. The International Journal of Human Resource Management , 30(21): 2993–3025. Walsh, P. R., Dodds, R., Priskin, J., Day, J., & Belozerova, O. 2021. The Corporate Responsibility Paradox: A Multi-National Investigation of Business Traveller Attitudes and Their Sustainable Travel Behaviour. Sustainability , 13(8): 4343. Wilkinson, A., Knoll, M., Mowbray, P. K., & Dundon, T. 2021. New Trajectories in Worker Voice: Integrating and Applying Contemporary Challenges in the Organization of Work. British Journal of Management , 32(3): 693–707. Wu, T.-Y., Liu, Y.-F., Hua, C.-Y., Lo, H.-C., & Yeh, Y.-J. 2020. Too unsafe to voice? Authoritarian leadership and employee voice in Chinese organizations. Asia Pacific Journal of Human Resources , 58(4): 527–554.

International Assignments: Managing Benefits and Taxes for Expatriate Employees

Written on February 28, 2019

Given the complexity of the U.S. tax code and the myriad regulations related to ERISA plans, managing benefits for domestic employees is a complicated undertaking. But managing benefits for employees who your U.S. company sends to work overseas—known as expatriates, or expats—adds several layers of complexity.

As globalization continues to be a defining characteristic of the economy, many U.S. companies are finding opportunities to grow abroad. But before their employees ever step on foreign soil, employers need to learn about the various taxes other governments may impose on benefits and compensation and think through the various questions that go into developing a sound policy for managing benefits for expatriate employees. Employers also need to help their employees understand what the foreign assignment means to them with respect to taxes and benefits.

Understand the Basics of Expatriate Taxation

For purposes of this article, an expatriate is a U.S. citizen or green card holder who is sent by their U.S. employer to work at a branch or other linked organization in a foreign country. Assignment duration may vary anywhere from six months to several years. Employees must obtain a work visa, and—depending upon the host country—may be eligible for certain benefits offered by that country while working abroad.

U.S. citizens, green card holders, and their employers need to understand that expatriates will still have an income tax liability and income tax return filing obligation at home regardless of where they work globally. The United States is unusual in this regard with respect to taxing their citizens and permanent residents (green card holders) who are living and working abroad; many foreign governments allow their citizens to fall under the host country’s tax code when working abroad and home country taxation is often suspended until the individual returns to their home country.

The United States’ unusual approach, however, doesn’t mean that U.S. expatriates will always face double taxation. The U.S. tax code looks to offset this, at least partially, by allowing certain foreign tax credits and/or the foreign earned income exclusion. Employers take these credits, the foreign earned income exclusion, and the foreign country’s tax policies into consideration when developing the compensation package for the employee.

In addition to understanding how the U.S. will tax the expatriate’s foreign compensation and benefits, employers also need to understand how the host country will tax this income. Almost every country requires some kind of tax to be paid by foreign workers. While taxation of salary and bonuses may be relatively straightforward, things can get quite complicated when it comes to how benefits—such as retirement matching contributions or profit sharing—are taxed.

Consider Your Options for Making Expatriates Whole

Employers need to study foreign countries’ tax laws and be aware of each country’s nuances so a fair, balanced and competitive compensation package is developed. The good news is that employers have flexibility in navigating these issues and developing their policies.

The first option is to do nothing. Sometimes, in this scenario, the expatriate is responsible for the taxes and other costs incurred while working in the host country. A more common strategy is to equalize the tax burden on the employee. This is a tax-neutral policy, often referred to as tax equalization, where the employee is no worse or better off while working abroad. In this case, the goal of the compensation package is to keep employees whole—which means maintaining roughly the same financial standards they would have experienced at home.

Beware Double Taxation of Retirement Benefits

Expatriates are allowed to participate in U.S.-based retirement plans while working abroad. They can contribute pre-tax dollars to their traditional 401(k) plans, and employers can offer a match to the employee deferral. Unfortunately, many foreign countries consider the deferral to be taxable income.

What’s more, the employer contribution may be considered regular income subject to foreign taxes as well. In this case, the employee is double taxed: first by the host country for the “income” sent to the retirement plan, and then by the United States when it’s time for the participant to withdraw assets. (Double taxation may also happen in a Roth situation, where participants pay taxes up front when making the deferral.)

In these situations, employers will need to decide whether expatriates should be excluded from the plan and possibly compensated outside of the benefit to avoid the double taxation—or utilize a tax equalization policy where the expatriate is made whole. The latter approach would be in keeping with the U.S. system, in which qualified retirement plan contributions are only taxed once when the employee takes a distribution from the plan at or after retirement.

Insight: Take a “No Surprises” Approach to Your Expatriate Benefit Policy  The goal of any expatriate compensation package should be to ensure that neither the employee nor the company encounter any surprises. To achieve this, employers need to think through many issues well before sending an employee abroad.

The first issue is to decide whether or how to make employees whole. After that major issue is resolved, employers need to focus on finer points such as evaluating foreign tax policies, reviewing plan documents to determine eligibility and analyzing foreign tax credit structures to maximize value.

It’s also important to have strong communication strategies and resources for employees. A solid two-way communication plan aids expatriates in clearly understanding what they will be receiving and responsible for, and offering them access to experts who can help them feel that they are not alone in navigating the oftentimes complex tax structures in host countries.

Employees working at different companies often compare notes about their employer’s compensation policy for expatriates with other expatriates they meet abroad, so understand that there are competitive reasons for developing a fair, robust approach.

When sending employees abroad, employers have a lot to manage from a benefits perspective, between adequately rewarding employees, understanding individual countries’ tax rules, filing the appropriate forms in the foreign jurisdictions and keeping costs under control.

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8 Tips for Preparing Expatriates for Foreign Assignments

Preparing expatriates for foreign assignments is a crucial undertaking for either expansion processes or short-term business travel. The challenge here is to ensure that the employees chosen to go work abroad do so successfully. Much of that effort will be produced by them, but even more important is for the wider company to provide support.

When moving and managing assets - in this case, your talented employees - you want to make sure that all that time and effort isn’t for nothing. You want to make sure the move is compliant and that workflows shared by your team and the expatriate employee are streamlined. 

So what do you need to focus on? Here are eight tips for preparing expatriates for foreign assignments in a successful mobility project. 

• Pre-Move Training
• Sourcing Immigration Support
• Ensure Continued Communication
• Provide Support On The Ground
• Undertake Project Alignment Meetings
• Invest in Knowledge Management
• Provide Home and Host Sponsorship
• Take Into Account Domestic Duties

1. Pre-Move Training

Preparation for expatriation is of utmost importance. This training needs to be well-researched, taking into consideration the potential challenges that employees and mobility teams might face. For example, identify:

Your potential challenges : For example, a specific country could require a specific tax set up for expatriates or business travelers. You’ll have to research the requirements that apply to your expatriation.

Strategies that help you deal with these issues: Some global organizations work with Professional Employer Organizations (PEO) in order to maintain compliance and work in line with cultural requirements. This is one potential solution that you might find appealing.

Areas for cultural training : Cultural expectations can be radically different in one country compared to another - while this may seem like the last thing to focus on, it’s worth spending time looking into cultural differences, just so no accidental faux pas are made.

The overarching goals of the assignment : An expatriation depends on all stakeholders having visibility and an understanding of the reasons for it. 

Local language training : Even if the host country has a good rate of use for your language, it’s worth helping your employee get to grips with the basics.

2. Sourcing Immigration Support

Immigration and the requirements therein are obviously crucial. Border controls, regulatory environments and immigration law are therefore all things to contend with. Now, these can be daunting and confusing, but it’s imperative to fully prepare for them, as they’re some of the first barriers to overcoming when expatriating an employee for foreign assignments. 

You need to make sure that you’re expatriation is in line with national and international immigration policy for both your home and host country. Similarly, visas and short-term or permanent residency applications need to be sent off for. Without these, alongside a considered approach towards global immigration , your overseas assignment won’t be able to continue. 

3. Ensure Continued Communication

Without communication, there’s no expansion. Home and host teams need to be on top of carrying out frequent communications, so that data is acted upon and problems can be solved collaboratively.

Assignees need to be proactive in this and so too do home teams. Communication allows organizations to leverage what’s being learned and respond actively to specific events. On top of that, communication needs to be structured so the learnings and updates shared are easily tracked. Monthly meetings and weekly check-ins are good places to start. 

4. Provide Support On The Ground

Alongside frequent communication, on-ground support also needs to be offered. This is a job for HR teams, who can help expats and their families (if applicable) adapt to their new surroundings. This kind of support covers:

• Finding accommodation.
• Creating bank accounts and setting up payroll in line with host-country regulations ( This is another obligation that a PEO can support you with ).
• Providing health insurance.
• Enrolling children in school (if applicable).
• Preparing accurate taxation processes.

Taxation is one thing to be aware of, as getting the process wrong can result in legal ramifications. Again, this is something a PEO can help support , as they can act as local Employers of Record, managing and deducting taxation at source - making sure your expatriate assignment is compliant in terms of taxation. 

5. Undertake Project Alignment Meetings

Once the critical information regarding the expatriate employee’s assignment, residency, taxation and other requirements has been exchanged with the relevant stakeholders and/or authorities, it’s time for a project alignment meeting.

This meeting should be held between the employee, a host manager or host team and home team. In it, you should identify the potential causes of friction for the assignment and work to strategize mitigation techniques. Similarly, go over mutual expectations held by the home and host team so that visibility and transparency are also captured. 

Overall, you’ll want to firmly pin down issues that may affect:

• Data collection.
• Reporting strategies.

6. Invest in Knowledge Management

Any assignment knowledge generated needs to be properly disseminated to the relevant parties, quickly and efficiently. These lessons are not only worthwhile for future expatriates, but for the wider company itself and how it approaches global marketplaces. 

When we ensure that learning is absorbed and spread across the whole enterprise, we help to reduce mistakes and delays in the future.

7. Provide Home and Host Sponsorship

As we’ve briefly discussed, having home and host teams managing the expatriate are important, but let’s cover that more in-depth. 

Communication via email isn’t the best way to manage a remote employee. To make sure the expat doesn’t feel cut off from home office processes, create teams or ‘sponsors’ that oversee the experience and work of the employee. 

Whether they be points of contact or mentors, these individuals (or wider teams) help to anchor an expat employee to the work in the home country, keeping them updated on any new developments. Both sides help to co-manage and resolve problems when they arise.

Sponsor individuals within the home country are best suited if they too have had experiences with expatriation, because a lot of this management is about empathy - not just looking for hitting the next performance goal. Expatriation is a difficult process, especially if the host country is a radically different place.

8. Take Into Account Domestic Duties

Another tip for preparing expatriates for overseas assignments is to make sure their family is supported.

Some expatriate employees have children and spouses, which sometimes do make an overseas assignment a lot more complex. These difficulties are usually hard to spot, as many employees will be reluctant to share them with employees, due to the size of the project and the personal nature of these difficulties.

It can be the case that the people most likely to be able to help are the last to know, so this is another thing that good communication can help with. From the home country team’s point-of-view, they need to inquire regularly about how the domestic side of the project is going. 

It needs to be made clear that any issues in regards to this need to be made known, but also that no judgment will arise from those issues being aired. Expatriation is a tough process for a family and businesses need to be supportive. This kind of transparency will dramatically help the overseas assignment. 

To discover more about overseas assignments and expansion, we’ve created a fantastic foundational guide that will help you when strategizing your next moves, be they domestic or international. 

The Guide to Global Expansion

There’s a lot of different info out there on the web about taking your business abroad - or even just sending an employee overseas. To help cut through the noise, our detailed guide will help your business’ journey to expansion.

Inside, you’ll discover more on expansion methods, the crucial considerations and further information on PEO. Just click the link below to get your copy.

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Pros and Cons of International Expat Assignment 

Are you trying to work out if a short-term international assignment is for you you may be considering applying for an opportunity or you may have an offer of an overseas role on the table, either way there’s a lot to think about. making the decision to work overseas, even in the short-term, has the potential to have long-term repercussions for your life and career., what is a short-term international assignment [sia].

A short-term international assignment is the deployment of an employee overseas to complete a task usually within a period of three months to a year.

Short-term international assignments became popular early in the millennium as a means of addressing recruitment gaps, talent shortages and focusing on strategic global projects. Their popularity grew during the financial crises as a less expensive form of global mobility.

In the post-Covid world, SIAs are a means of offering increased flexibility to employees who want to gain some international experience without committing to the traditional three to five years overseas.

Like every decision in life, there are positives and potentially some challenges when it comes to moving abroad for work.

What are the pros of a short-term  international assignment?

Opportunity to work overseas, increased experience of global marketplace, leadership potential, improved network.

Working overseas will enable you to broaden your network. While completing a short-term expat assignment you are likely to work with:

·         Global mobility team

·         Human Resources/People Department

·         Senior Management

·         Colleagues at all levels in your new office

·         A new range of stakeholders

·         Customers in a different market

Opportunity to travel 

Opportunity to learn a new language.

Depending on where your short-term assignment is based it may provide an opportunity to learn a new language. You do not necessarily need to be fluent in a language for it to have positive benefits for your career.

Attempting to speak another language allows you to engage with colleagues in your short-term home in a more meaningful and immediate way. It has also been shown to have cognitive benefits too. People who speak more than one language have improved:

·         Critical thinking skills

·         Problem solving skills   

·         Memory

Spouse can retain their career

Children can stay in their current school, what are the cons of a short-term international assignment.

Of course, any kind of change has potential negative side effects to be aware of too. What these are will depend on your circumstances, but some potential downsides may include:

1. Potential for interrupted career progression

Moving overseas may mean you are ‘out of sight, out of mind’. Depending on your company, not being around every day and difference in time zones may mean the good work you are doing is not as visible to centralised management. This isn’t always a difficulty, but it might be something to be aware of depending on your business. 

2. Pressure to deliver 

As a short-term assignee, you are likely to be under pressure to hit the ground running and achieve a lot in a short period of time. You are unlikely to have the luxury of spending the first few months settling in. There may be pressure on you to make changes quickly before you have had a chance to build relationships or get colleagues at a local level on board.

3. Culture shock

The risk of culture shock is even higher with short-term assignees because you may not have the same time to adjust as your long-term counterparts. Comprehensive pre-departure training is important, so you have as much information as possible about life in your temporary home. 

4. Expat loneliness

If you decide leaving family in your home country is the best option then there is a chance you may suffer from expat loneliness while you are away. Building new and maintaining existing relationships while overseas is really important. If you feel lonely , check whether your international health insurance has an expat assistance programme that provides you with access to a trained professional for assistance. 

5. Maintaining relationships at home

Your relationships with friends and family at home are important. Leaving may prove difficult but technology makes it easier than ever to stay in touch. 

6. Relationship issues

If you decide to take the assignment, your partner may have to remain at home for work or family commitments. This can impact your relationship . While you struggle with a new role in a new country, they are left carrying the emotional load at home and often completing all the tasks you used to help with. 

7. Repatriation

Do not underestimate the challenge of returning home once your assignment is complete . Particularly if you settled well and enjoyed the work. Changes may have happened in your home office that mean:

• You are not returning to the same role you left

• Goals and objectives may have changed since

• You may have to readjust your ways of working once again 

Agreeing to an international assignment is a big decision for a range of professional and personal reasons. We hope this will help you to work out what yours are so you can make the right decision for your circumstances. 

If you do decide to accept an assignment, don’t forget you will need international health insurance to access private healthcare should you need it while you are away.

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Study explores effects of overseas business activity through experiences of expatriates

by Kyoto University

In international business, companies frequently dispatch their employees overseas as expatriates. They are crucial for linking the headquarters with foreign branches and their subsidiaries and bridging cultural, language, and business practice gaps.

Traditionally, the focus has been on these positive effects of expatriates engaging in boundary-spanning activities. These include formal and informal communication, coordination across diverse cultures and organizational practices, and building business networks and trust within and outside the companies. However, the risk of excessive workload and stress, for example, has often been ignored.

Now, a study by Kyoto University and Hunan University, analyzing data from expatriates and local employees at Chinese multinational subsidiaries, has revealed that expatriates' boundary-spanning activities could also have adverse effects. The work is published in the Journal of International Business Studies .

"Our findings suggest that while boundary-spanning is beneficial to the company for building valuable social capital, such as fostering trust and a sense of belonging and loyalty among expatriates and local employees, it can also lead to role stress," says leading author Ting Liu of KyotoU's Graduate School of Management.

This stress may cause emotional exhaustion for expatriates, leading to local employees viewing them as outsiders. The study highlights the risks of boundary-spanning and calls to action the need for careful management.

This research included three datasets collected in 2022, with the initial two datasets used to develop a scale to measure expatriates' boundary-spanning activities. The third dataset—the main focus—consisted of 177 pairs of expatriates and local coworkers from the energy engineering sector in various Asian countries.

"Our study sparks an essential dialogue about the trade-offs between the gains for organizations and the costs borne by individuals," adds co-author Tomoki Sekiguchi, also of KyotoU's Graduate School of Management.

It highlights the contrast between the benefits organizations receive from expatriates, such as creating international networks, and the personal toll these roles take, including stress and exhaustion.

"Therefore, it is crucial for multinational companies and global managers overseeing overseas subsidiaries to grasp not only the positive outcomes but also the potential drawbacks of expatriate boundary-spanning activities," says co-author Jiayin Qin of KyotoU's Graduate School of Economics.

"By understanding these dynamics, the companies can strive to amplify the benefits while mitigating the negative impacts , ensuring a healthier balance for all involved," concludes co-author Yaxi Shen of Hunan University's School of Business.

Provided by Kyoto University

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Will it boost or harm your career?

• February 1, 2021

There is no suspicion that working abroad is romantic. Living in a culture with different languages, habits, and working styles is an exciting and once-in-a-lifetime experience. It can not only much promote your career development, but also broaden your horizons. However, what many companies now call “global” assignments has some disadvantages. Some parts of the world are indeed dangerous for some visitors, but in most postings worldwide, the challenges are related to different cultures and ways of doing business. Here are some pros and cons of an international assignment to help you decide if it is a smart career move.

Table of Contents

Pros of international assignment, international work experience.

Indeed, the world is growing and becoming more and more mobile and accessible. This is the main driving force. Business leaders today are not geographically constrained. Work experience in an international corporate environment and culture is often described as a prerequisite for most senior positions at major international companies. Instantly add diverse and multicultural elements to your portfolio and experiences to make them more appealing to your position on a global scale.

Global companies are paying more and more attention to international diversity, and there is no sign that this trend stops. Therefore, the overseas experience gained by international mission professionals will help those seeking senior management positions. If you are one of these ambitious professionals, the question should be whether you can afford not to participate in the international assignment?

The company devotes substantial resources to expats international assignments. Allocation itself is usually performed for a specific purpose, and ROI is an important goal. For example, you can transfer assignees with specific skills to a new location to lead a project that is considered essential. Therefore, being selected for a job is usually a compliment, but it is also an opportunity. A successful project overview allows you to prove that you are the assignee and develop your career from the benefits of success. If you can withstand the pressure, then your international assignment can prove beneficial. Are you ready to move forward and succeed?

Experience Different Ways of Doing Business

Learning a particular field and working in that field in the same country means a fairly fixed set of expectations and assumptions. Overall, understanding how other countries treat your industry and business can be an excellent way to open yourself to new ways of doing things. The best part? Wherever you are, you will get these learning outcomes.

Diversify Your Income

When it is difficult to predict what will happen politically, earning income in different currencies is an excellent way to diversify risks and protect the financial future. For example, in the past two years, the pound sterling value has changed 30% from the value of the euro. If you are particularly interested in the domestic economy, relocation is still a way to obtain better salaries and employment opportunities in a more stable business environment.

Explore the world

If you are passionate about traveling, nothing is better than working abroad. Not only you experience the country more deeply, but you can also get rewarded for it. You do not need to spend two weeks to get to know the country’s culture and personality directly. This is also an excellent opportunity to explore neighboring countries. If you are learning a language, immersion in the countryside is also an excellent way to quickly improve your skills.

Cross-Cultural Communication

Cons of an international assignment, emotional problems.

Life as an expat is a rewarding experience. However, it can be challenging. Loneliness, culture shock, and nostalgia usually overwhelm foreigners, and not all migrants are ready to face this strong, perhaps new emotion. The combination of pain and diligence described above has reportedly resulted in high burnout among professional immigrants.

Less Job Flexibility

You love your new country, but do you hate work? Unlike going home, if your position is not suitable for you, you can shop here. Working abroad may mean that your job is linked to your visa. Even if you are not restricted by a visa, your lack of language skills and local experience may limit your escape options.

Interrupted Career Progression

For outsiders, “Out of sight, out of mind” can be a very familiar word. Even if you live in the same company, you do not go out every day or work in different time zones. This means that good impressions are slowly disappearing and are no longer the number one promotion. In the country of visit, it may be necessary to take a junior position due to a lack of local experience or limited language skills, which can feel like a step back professionally.

Cultural and Language Barriers

Among foreigners who cannot establish the necessary business relationships or live daily lives, posting emails in places where there is a tremendous cultural difference or where communication in a new language is required can cause trouble. Non-traditional families, such as gay couples, may face cultural resistance and pressure, making assignment management difficult in the long run

Legal risks

Domestic work laws and regulations regarding wages, taxes, and pensions usually differ between residents and foreigners. As with immigration requirements, compliance with legal requirements must be ensured.

Technological change

Your country’s technology can lag foreign countries for several years. After returning home, it may take several months to digest all the changes.

As global mobility increases, many employees want foreign stamps on their passports to support their personal growth and career development. They are increasingly looking for commuters, rotational, expatriate, or other alternative jobs to build resumes. International assignments are an essential tool for international career development. In this case, employees with international experience are the greater wealth for the organization.

Some potential business traveling international career in which global travel is usually necessary like international accountant, marketing and sales International missions help improve cultural literacy, promote foreign language learning, expand professionals’ network, and broaden their horizons. But of course there are always pros and cons of an international assignment.

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Employers Adopt Remote Work Policies, Lag in Addressing Risks

By Jamie Rathjen

Increasing numbers of employers have policies about remote work assignments while also lagging behind in addressing the risks that come with them, two consultants said May 7.

Patrick Landers and Abbas Mirza, a partner and senior manager at EY, respectively, spoke about compliance risks associated with remote work while also presenting some results from EY’s 2024 Mobility Reimagined survey , which was released April 19. The pair spoke at PayrollOrg’s 42nd Payroll Congress in Nashville.

Mirza broke down remote assignments into business travel, where an employee travels for company-approved business needs and does not change their tax residency; remote work, where an employee works outside their tax residence or normal workplace for an undefined period; and a hybrid approach where an employee alternately works outside their normal workplace and returns on a set schedule.

Landers said he had an expatriate assignment that turned into a hybrid system, moving to Bangalore, India, in 2017, returning to the US during the Covid-19 pandemic, and then commuting between the US and India for a few weeks at a time.

The Covid-19 pandemic saw a 54% decrease in global business travel spending that is expected to recover to prepandemic levels, Landers said citing the EY survey. He added that employers are having difficulty recruiting employees with the skills they require, citing declining birthrates in the Western world.

Further survey findings on remote work and global mobility were that 87% of knowledge workers think they should be able to work from home at least twice per week, while 82% of employers said they had “developed a policy/approach for hybrid mobility,” Landers said.

The survey found that 98% of employers used some method of tracking employees’ locations, either through employee disclosure, tracking, or software tools, Landers said. Travel data was the most common method, used by 43% of employers, and next most common were employee self-reporting, expense reports, or email or social media monitoring, he said.

Areas of Risk

Basic areas of focus for US remote work compliance include state tax and employment laws, Mirza said, while internationally tax residency, work permits, and tax treaties are also included. Employees working remotely somewhere where they do not have the right to work can lead to civil or criminal penalties for both the employee and employer, he said.

“Any one of these areas can create a potential issue for your organization,” Landers said, referring to immigration, employment taxes, individual income tax, social security, and any other regulations.

The survey found that employers acknowledged risks in the areas of data privacy, cybersecurity, tax compliance, and immigration or legal compliance much more often than they had formal policies in those areas, Landers said.

The percentage of responding employers that acknowledged those risks ranged from 78% to 84%, but the percentage that had policies about each category of risk ranged from 32% to 55%, Landers said.

Landers turned to tax compliance when providing examples of unintended consequences of remote work, such as sourcing of deferred compensation when an employee moves or that employees can cause their employers to become liable for state business or franchise taxes. In response to a question about whether countries tracked employee presence as well, Landers said it depends on the jurisdiction but “there’s definitely visibility to this in a way that there wasn’t a few years ago.”

International jurisdictions that the presenters cited as high-risk regarding employment taxes included Australia, Brazil, Colombia, the Netherlands, and Switzerland. Landers mentioned that Australia in particular has automated much of its entry processes, which he characterized as positive because of less human interaction but also potentially negative because automated algorithms can trigger follow-ups from officials.

In the US, the presenters cited New York and Connecticut as high-risk states for employment taxes, followed by California, Minnesota, and Ohio as “medium-high risk.”

To contact the reporter on this story: Jamie Rathjen in Washington at [email protected]

To contact the editor on this story: William Dunn at [email protected]

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'A Dangerous Assignment:' Meet a journalist covering corruption in Venezuela

Jeremy Siegel: This is GBH's Morning Edition. In 2016, Venezuela was in economic turmoil. President Nicolás Maduro had recently taken office after the death of Hugo Chávez, and amid a mounting crisis, his government announced a new initiative billed as providing high-quality and essential food to people at risk of starvation. But a new documentary produced by Frontline sheds light on a shadowy corruption scandal spanning from Venezuela to the United States, revealing that this program in Venezuela was not at all what the government claimed it would be, and how the reporters covering it became targets of Maduro. Joining me now is journalist Roberto Deniz of the Venezuelan independent news site Armando.Info. He's the subject of the new film called "A Dangerous Assignment: Uncovering Corruption in Maduro's Venezuela." Roberto, good morning. Thanks for joining us.

Roberto Deniz: Thank you. Thank you so much for having me.

Siegel: So take me back to 2016.

Deniz: Venezuela was leaving a tremendous economic and social crisis, and the government at that moment decided to create a kind of social program to help poor people in Venezuela and to provide food for people in Venezuela. But the problem that we have uncovered with our investigation that now is in our documentary is that this was not a social aid from the Venezuelan government to the people. The real thing behind all of this was a business, a business belonging to a Colombian entrepreneur very close to Nicolás Maduro, the Venezuelan president. And not only that, also the main problem that was behind the social program was that they decided to import, to buy food in different countries, especially in Mexico, and send those products to Venezuela. But it was very poor quality food for the poor people in Venezuela.

Siegel: This program was billed as providing high-quality food, but it was not high-quality food; and it was benefiting people living in other countries. Tell me more about what you learned in your reporting and your investigation.

Deniz: We saw that the Venezuelan government decided to send money to different entrepreneurs very close to the Venezuelan government. But these entrepreneurs, like Alex Saab, that maybe was the main entrepreneur behind the program, they bought food that was not the quality that they said. Even worse: We demonstrate that in the case of the powdered milk that we were selling in these boxes to the poor people in Venezuela. We saw that it was a very, very bad quality product because the product was very high in carbohydrates, very high in salt, but very low in calcium and very low in protein.

Siegel: This film, "A Dangerous Assignment," doesn't just illustrate your reporting surrounding the scandal, but also tracks the story of how you and your colleagues were attacked by Maduro's government as a result of your reporting. What was your experience in the aftermath of your investigation?

Deniz: I started to investigate this case and all of the story in 2016, and just a year after it, at the end of 2017, I was sued this Colombian guy, beef entrepreneur, that was benefiting off this social program of Nicolas Maduro. And in 2018, I had to flee Venezuela, I had to get out of Venezuela. And I continued the investigation, living abroad, living in Bogotá, in Colombia. And right now I can't go back to Venezuela because of this investigation, this and other investigations related to our job in Armando.info. And so as you said, this is the cost, this is the risk that we have to face when we decide to do this kind of job in a country like Venezuela right now.

Siegel: Do you have any confidence that things will change in your country and you'll ever be able to go back home?

Deniz: I hope that Venezuela can change, and Venezuela maybe, you know, can fix all the problem that they have. If that happens, I hope to come back in Venezuela. But right now, I'm not sure that that is going to happen.

Siegel: Roberto Deniz is a reporter for the Venezuelan independent news site Armando.Info. He's featured in the new FRONTLINE documentary, "A Dangerous Assignment," which airs tonight on GBH. This is GBH News.

In 2016, Venezuela was in economic turmoil.

President Nicolás Maduro had recently taken office after the death of Hugo Chávez, and amid a mounting crisis, his government announced a new initiative billed as providing high-quality and essential food to people at risk of starvation.

A new documentary produced by FRONTLINE “A Dangerous Assignment: Uncovering Corruption in Maduro's Venezuela,” sheds light on a shadowy corruption scandal spanning from Venezuela to the United States, revealing that this program in Venezuela was not at all what the government claimed it would be, and how the reporters covering it became targets of Maduro.

“Venezuela was leaving a tremendous economic and social crisis, and the government at that moment decided to create a kind of social program to help poor people in Venezuela and to provide food for people in Venezuela,” journalist Roberto Deniz of the Venezuelan independent news site Armando.Info, told GBH’s Morning Edition co-host Jeremy Siegel. “But the problem that we have uncovered with our investigation that now is in our documentary is that this was not a social aid from the Venezuelan government to the people.”

The program, Deniz said, was a way to funnel business to entrepreneurs close to the president. And the food was often of poor quality and low nutritional value, he said.

“We saw that the Venezuelan government decided to send money to different entrepreneurs very close to the Venezuelan government,” he said, like entrepreneurs Alex Saab. “Even worse: We demonstrate that in the case of the powdered milk that we were selling in these boxes to the poor people in Venezuela. We saw that it was a very, very bad quality product because the product was very high in carbohydrates, very high in salt, but very low in calcium and very low in protein.”

Deniz himself had to face investigations and ultimately fled Venezuela because of backlash from the powerful people he reported on, he said.

“In 2018, I had to flee Venezuela,” he said. “And I continued the investigation, living abroad, living in Bogota, in Colombia. … And so as you said, this is the cost, this is the risk that we have to face when we decide to do this kind of job in a country like Venezuela right now.”

He hopes to one day be able to return.

“I hope that Venezuela can change,” he said. “If that happens, I hope to come back in Venezuela. But right now, I'm not sure that that is going to happen.”

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IRS Tax Tip 2024-48, May 14, 2024

It’s important that U.S. citizens and resident aliens living abroad understand their tax obligations.

Their worldwide income -- including wages, unearned income and tips -- is subject to U.S. income tax, regardless of where they live or where they earn their income. They also have the same income tax filing requirements as U.S. citizens or resident aliens living in the United States.

An income tax filing requirement applies even if a taxpayer qualifies for tax benefits such as the Foreign earned income exclusion or the Foreign tax credit , which reduce or eliminate U.S. tax liability. These tax benefits are available only if the eligible taxpayer files a U.S. income tax return.

Taxpayers living outside of the U.S. and Puerto Rico have an automatic extension to file – but not to pay

A taxpayer has an automatic two-month extension to June 17, 2024, if both their tax home and abode are outside the United States and Puerto Rico. Even with an extension, a taxpayer will have to pay interest on any tax that wasn’t paid by the regular April due date.

Those serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return also qualify for the extension to June 17, 2024. Taxpayers should attach a statement to their tax return if one of these two situations applies. More information is in the instructions for Form 1040 and Form 1040-SR, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad , and Publication 519, U.S. Tax Guide for Aliens .

Reporting requirement for foreign accounts and assets

Federal law requires U.S. citizens and resident aliens to report their worldwide income, including income from foreign trusts and foreign bank and other financial accounts.

• Schedule B (Form 1040), Interest and Ordinary Dividends – In most cases, affected taxpayers attach Schedule B to their federal return to report foreign assets. Part III of Schedule B asks about the existence of foreign accounts such as bank and securities accounts and usually requires U.S. citizens and resident aliens to report the country in which each account is located.
• Form 8938, Statement of Foreign Financial Assets – Some taxpayers may also need to attach Form 8938 to their return to report specified foreign financial assets if the total value of those assets exceeds certain thresholds. The instructions for this form have the details.

People must also report foreign assets of $10,000 or more to the Treasury Department

U.S. persons with an interest in or signature or other authority over foreign financial accounts where the total value exceeded $10,000 at any time during 2023 must also file a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts with the Treasury Department.

The form is available only through the BSA E-filing System website.

The deadline for filing the annual Report of Foreign Bank and Financial Accounts was April 15, 2024. U.S. persons who missed the April deadline have an automatic extension until Oct. 15, 2024, to file the FBAR.

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