Sending an Employee Overseas - American Express

Sending an Employee Overseas
There are a slew of issues to understand when your business sends someone
to another country to work. From visas, to pay issues, here are some of the
things you have to bear in mind.
By Charles Slack
In an ever more global economy, transferring U.S. employees overseas may seem as natural
a decision as sending them from one state to another. Yet overseas employment presents a
host of special financial, tax, and cultural questions that should be addressed early in order to
make the transition smooth and avoid hassles and expense to employer and employee alike.
“Too many employers make a mistake by saying, ʻletʼs open a branch abroad and deal with
problems as they arise,ʼ” says Giselle Carson, an attorney with the law firm Marks Gray in
Jacksonville, Florida, whose areas of specialty include overseas employment issues. “This is
definitely not the same thing as moving an employee from Jacksonville to Connecticut.”
One consideration involves tax planning and whether to pay employees in dollars or the local
currency. Because shifts in the exchange rate could significantly impact the employeeʼs
salary, this question should be settled in the contract, before the assignment begins, Carson
says.
As Americans, and because of the solidity of U.S. currency, employees often prefer to be
paid most of their salary in dollars, Carson says. At the same time, theyʼll need local currency
for everyday expenses, and constantly exchanging money at street rates can be an
expensive nuisance.
Managers with large numbers of overseas workers may find it convenient to establish special
employee checking accounts through a multinational financial firm, according to human

esources specialist Paul Brunell. These accounts allow employees to withdraw pay in either
currency.
While such arrangements may be impractical for small firms, employers may still be able to
negotiate guaranteed exchange rates through a foreign exchange company, says Brunell
who served as an international human resources executive for several major companies
before starting his own consultancy for small and mid-sized firms in Atlanta. Other tips:
Factor in all of the costs. Supplying benefits such as living quarters and security (if
needed), can drive costs up to several times the actual salary, says Brunell, so make sure
youʼve got the proper amount budgeted. Also, keep in mind that these perks may create local
tax obligations for your employee. “They can wind up getting hung out to dry with a tax bill,”
Brunell says. The employer should factor in enough extra salary to enable the employee to
cover the taxes on those perks.
You may also be subject to the employerʼs share of whatever local social security or other
entitlements apply. In many countries, these can be significantly higher than in the United
States.
Get local knowledge. Whenever possible, an employer should visit the country in question,
or send an advance team, to familiarize themselves with local laws and customs. Consider
consulting a U.S. lawyer familiar with international human resource issues. While the attorney
wonʼt know everything about every country, he or she may be able to advise and help you
with the process, the questions to ask, and perhaps provide a referral to a reliable local
lawyer. Especially important is to understand and abide by local visa rules, which of course
vary from country to country.
Whether the motivation is staying competitive in a global economy, or aggressively expanding
oneʼs customer base, sending employees overseas can have terrific rewards, Carson says.

But she adds: “Just remember that finding and hiring the right person for the job is only the
beginning of the process.”
Charles Slack is the author of several books and numerous business and financial articles. His
business books include The Communicators: Leadership in the Age of Crisis (co-author, 2010) and
Hetty: The Genius and Madness of Americaʼs First Female Tycoon.