international assignment employment agreement

International Assignment Agreement: Definition & Sample

Jump to section, what is an international assignment agreement.

An international assignment agreement is a contract between an employer and employee that formally assigns the latter to a position in a foreign country. Several pieces of important information are contained within this contract, such as where the assignment is, how travel and lodging costs will be paid, how much the compensation is, and how long the assignment will last. It also lays out specific terms and conditions surrounding how to shorten or lengthen the assignment and what will take place if unforeseen circumstances occur, such as random acts of nature.

Common Sections in International Assignment Agreements

Below is a list of common sections included in International Assignment Agreements. These sections are linked to the below sample agreement for you to explore.

International Assignment Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.10 25 dex1010.htm INTERNATIONAL ASSIGNMENT AGREEMENT - JOHN TOWNSEND , Viewed September 16, 2022, View Source on SEC .

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Small firm offering business consultation and contract review services.

Scott graduated from Cardozo Law School and also has an English degree from Penn. His practice focuses on business law and contracts, with an emphasis on commercial transactions and negotiations, document drafting and review, employment, business formation, e-commerce, technology, healthcare, privacy, data security and compliance. While he's worked with large, established companies, he particularly enjoys collaborating with startups. Prior to starting his own practice in 2011, Scott worked in-house for over 5 years with businesses large and small. He also handles real estate leases, website and app Terms of Service and privacy policies, and pre- and post-nup agreements.

I am a commercial contracts attorney with twenty years of experience. I have represented major corporate clients including Amazon, Marvel, and Viacom as well as independent entertainment professionals and technology startups.

Michelle F.

I provide comprehensive legal and business consulting services to entrepreneurs, startups and small businesses. My practice focuses on start-up foundations, business growth through contractual relationships and ventures, and business purchase and sales. Attorney with a demonstrated history of working in the corporate law industry and commercial litigation. Member of the Bar for the State of New York and United States Federal Courts for the Southern and Eastern Districts of New York, Southern and eastern District Bankruptcy Courts and the Second Circuit Court of Appeals. Skilled in business law, federal court commercial litigation, corporate governance and debt restructuring.

I am a corporate and business attorney in Orange County, CA. I advise start-ups, early-growth companies, investors, and entrepreneurs in various sectors and industries including technology, entertainment, digital media, healthcare, and biomedical.

Oscar is a St. Petersburg native. He is a graduate of the University of Florida and Stetson University, College of Law. A former US Army Judge Advocate, Oscar has more than 20 years of experience in Estate Planning, Real Estate, Small Business, Probate, and Asset Protection law. A native of St. Petersburg, Florida, and a second-generation Gator, he received a B.A. from the University of Florida and a J.D. from Stetson University’s College of Law. Oscar began working in real estate sales in 1994 prior to attending law school. He continued in real estate, small business law, and Asset Protection as an associate attorney with the firm on Bush, Ross, Gardner, Warren, & Rudy in 2002 before leaving to open his own practice. Oscar also held the position of Sales & Marketing Director for Ballast Point Homes separately from his law practice. He is also a licensed real estate broker and owner of a boutique real estate brokerage. As a captain in the US Army JAG Corps, he served as a Judge Advocate in the 3rd Infantry Division and then as Chief of Client Services, Schweinfurt, Germany, and Chief of Criminal Justice for the 200th MP Command, Ft. Meade, Maryland. He is a certified VA attorney representative and an active member of VARep, an organization of real estate and legal professionals dedicated to representing and educating veterans. Oscar focuses his practice on real small business and asset protection law.

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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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Delivering A Successful International Assignment

Anne morris.

• 9 October 2019

IN THIS SECTION

• 8 minute read
• Last updated: 9th October 2019

Organisations deploy personnel on international assignment for many reasons. Whether you are addressing an internal skills gaps, supporting leadership development or looking to improve working relations across borders, for any international assignment to be successful, there will be a multitude of legal, immigration, tax and pensions risks to manage when sending employees overseas.

This article covers:

International assignment objectives, international assignment structures, employment law.

• Immigration options 

Assignee remuneration

Professional support for international assignments.

Global mobility programmes have traditionally been developed with a uniform approach, driven largely by cost management and operational efficiencies. However, organisations are increasingly taking a more flexible and bespoke approach to overseas assignments in order to attain advantage in areas such as compliance and talent development and retention.

While a one-size-fits-all approach to the fundamentals of mobility management may be a commercial reality, overlaying this should be areas of specific consideration and capability that can be adapted to the specific needs and risks of each international assignment. This allows for greater focus on the assignment’s commercial objectives and the agility to respond to the organisation’s changing global mobility needs .

From the outset of any successful assignment project, there should be clarity of objectives. Why as an organisation is the decision being made to invest in sending an employee to perform services in a different country?

International assignments can offer value in many areas, many of which typically present in the longer-term.

Internal knowledge transfer is a common assignment objective to address talent or skills shortages within overseas regions. Deploying key talent with specialist knowledge and skills to train and upskill local team members can help to resolve local labour or skill supply issues. The cost/benefit analysis can explore potential missed opportunities or delays resulting from shortages in the local talent market.

International assignments are also highly effective in building relationships and improving intercultural working. This could be relationships within an organisation, with local clients and intermediaries or local authorities. Face to face interaction remains highly effective and valuable in building influence on the ground and can offer significant potential for advantage over competitors.

Beyond relationships, value is also created in the knowledge gained by assignees working overseas, from insight into local customs and culture, improved language capability and a general understanding of how business is ‘done’ within the region and helping to adapt organisational protocol to suit the local environment. Combined with the assignee’s existing market and organisational knowledge, they can offer a global perspective with local details, bringing considerable potential to build competitive differentiation.

With clarity of objective, you can then consider whether an international assignment is the most appropriate solution . Is it possible to hire or promote locally? Would multiple, shorter trips be as effective in performance terms but with lower cost implications? International assignments demand significant investment and it will be important to assess cost projections against expected return and value to the organisation.

As well as clarity of objectives, a successful international assignment also requires clarity of contractual terms, both to manage the expectations and understanding of the assignee, and also for the mobility team to identify support needs and potential risks. 

Now more than ever, organisations are developing portfolios of mobility programmes to enable an agile approach to global mobility that responds to the organisation’s changing needs for international personnel mobility. Assignments come in increasingly different shapes and sizes, from permanent relocations or temporary exchanges, secondments or transfers to a different region or to a different organisation.

While organisations demand greater flexibility and agility from their global mobility programmes, underpinning the activity should be an appropriate assignment structure with a supporting contractual agreement that enables compliance with regulatory and legal duties.

When considering which structure to adopt, organisations will need to consider a range of factors including the type of assignment and the relevant environmental context such as regulatory, immigration, employment law, tax, pension implications. 

For international assignments, where the employee is moving from the home country employer to a host country employer, the employer could consider a number of assignment structures, including:

• The employee continues to be employed solely by the home employer.
• The employment contract with the home employer is suspended for the duration of the assignment while the employee enters into a new employment contract with the host employer .
• The employment contract with the home employer is terminated with a promise of re-employment at the end of the assignment while the employee enters into a new employment contract with the host employer .
• The employment contract with the home employer is suspended and the employee enters into a contract with an international assignment company (IAC) within the employer group
• The employment contract with the home employer is suspended and the employee enters into a contract with both an IAC and the host country employer.
• The employee remains resident in the home country and works in a host country under a commuter assignment.  

Each type of assignment structure offers advantages and disadvantages which should be considered in light of the individual assignment. For example: 

• Do employment laws in the host country require the assignee to be employed by a local entity? 
• Would the assignee be agreeable to ending their home country contract and starting a new agreement with a new entity in the host country? 
• Are there terms in the home country contract that would need protecting in any new agreement, such as restrictive covenants? 
• Which jurisdiction would prevail, the host or home country? 
• How would local laws interpret a situation where there is no contract of employment with the employer in the host country? 
• Issues such as income and corporate tax, pension and employment rights and responsibilities will need to be identified and assessed against the specific assignment objectives and budget and the assignee profile and circumstances. 

Employment law implications come hand-in-hand with selecting an appropriate assignment structure.

Home-country employment contracts for employees on assignment from the UK to an overseas jurisdiction should generally be interpreted under the laws of England and Wales. If a host country contract is used, there should be specific provision in the agreement to determine which jurisdiction would prevail. However, neither position is guaranteed, for example where issues of domicile arise which may supersede any contractual provisions. Again the need is to assess on an individual assignment basis.

As well as explicit contractual considerations, employers should also be aware of any statutory rights or implied terms under UK law that may continue to apply even in the host country.

Specific provisions may also need to be made to ensure confidentiality and appropriate handling of commercial and sensitive information. While this may be standard or expected for senior employees, those on assignment should also be considered for such terms relevant to the type of assignment and the commercial objectives of the project.

Immigration options

Successful international assignments will invariably require careful consideration of the immigration requirements. Governments across the globe are adopting increasingly protectionist stances towards economic migrants, as policies seek to favour domestic workers. This means business travellers and visa holders are now facing greater scrutiny when applying for work visas and when trying to gain entry at the border. 

Visa options and criteria vary between countries and are subject to frequent change. Where permission is required for the assignee to work in the host country, it will be important to ensure the assignee applies for the most appropriate route to meet the assignment need, whether that is a work permit or a business visitor visa. The immigration requirements and options will be determined in most part by the rules of the home and host countries, the nationality of the assignee (and any of their dependants who will be joining them overseas) and the nature of the activities the assignee intends to perform during their time in the host country. 

For example, a British citizen may be eligible to travel to the US to attend sales meetings and work conferences for up to 90 days  without having to apply for a visa but to conduct ‘gainful employment’ they would need to look at a specific work visa, such as the L-1 visa for intracompany  transfers. 

A further factor will be the specific requirements of the visa or permit. Work visas, for example, may require sponsorship of the employee by a local entity with valid sponsor status. The application process for work visas are typically resource-intensive and in many cases will require the employer to provide compelling evidence as to why the role or work cannot be performed by a worker resident in the host country. 

Preparation will, therefore, be critical, ensuring there is sufficient time to consider the relevant immigration options in light of local rules, and to then make the required application. Complications may also arise where the employee does not meet certain requirements under the local rules, for example if they have a past criminal conviction or negative immigration record. This will require careful handling and, depending on the host country’s rules, may require submission of a visa waiver to explain the issue and provide assurances of the employee’s eligibility by requesting a discretionary decision on the application.

Relocation packages are typically the biggest expense associated with an international assignment. While cost control will remain a concern, it is important for employers to ensure they are offering packages that are competitive within the market and that the package will support both the commercial objective of the assignment and compliance with associated legal and tax risks.

Home-based packages remain common, including those which may be markedly above local market compensation levels, particularly in circumstanecs where the assignment need is business-critical.

It may be possible however to look at offering a lower package than the home-based option, by either localising the package to harmonise with host nation levels or to develop a ‘local-plus’ offering that maintains a degree of competition, but this can be challenging to apply consistently across all assignment types and locations.

Again, consideration should be given to the individual assignment and the assignee. Millennial workers for example are generally understood to value international experience and the remuneration package may not be their primary concern where the opportunity for overseas exposure is available.

For organisations with a substantial cohort of international assignees and travellers, it may be more appropriate to build a compensation scheme specifically for globally-mobile personnel.

Importantly, assignees who will remain under an employment contract in their home country may continue to be subject to home country payroll while on assignment. This will also enable pension and benefits to be offered in the same way through the home country. Taxation, however, raises more complex issues, for example where withholding rules apply in the host country. This will require specialist guidance to ensure tax liabilities in the home and host country are correctly managed and met withiin the appropriate timeframes.

International assignments are demanding on the employer and the employee, but have become critical given the business imperatives to meet talent and development needs and achieve competitive advantage . 

Employers should not lose sight of the need to understand the specific risks of each individual assignment, which increasingly demand bespoke solutions. While compliance , efficiencies and cost control should be underpinned by a solid global mobility infrastructure of policies, systems and procedures, the current shift is away from a uniform approach to assignment management, instead moving towards more agile management of each assignment, shaped by the specific assignment objectives, budget and risks in relation to immigration, tax, remuneration and employment law.

DavidsonMorris’ specialist global mobility consultants provide expert guidance to employers on all aspects of international assignments, from programme management and implementation to strategic consultancy to ensure value and return on the mobility investment. We understand the commercial drivers behind mobilising workers and the need to ensure compliance without impacting return on mobility investment.

We work with senior management teams, HR and mobility professionals to develop strategies that ensure effective compliance risk management while supporting delivery of the organisation’s global mobility objectives. For advice on making the most of international assignments, speak to us .

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator , and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

• Anne Morris https://www.davidsonmorris.com/author/anne/ Transitioning to an eVisa for UK BRP Holders
• Anne Morris https://www.davidsonmorris.com/author/anne/ New Fire & Rehire Code of Practice in Force
• Anne Morris https://www.davidsonmorris.com/author/anne/ King's Speech 2024: Employment Law Reforms
• Anne Morris https://www.davidsonmorris.com/author/anne/ Self Sponsorship Visa UK

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility .

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners , we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

Legal Disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct at the time of writing, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

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Guide to International Employment Contracts for Employers

Lorelei Trisca

May 13, 2022

Last Update

July 19, 2024

Table of Contents

What is an international employment contract?

When do you need an international employment contract, why is it essential to have an international employment contract, 10 essential elements of an international employment contract, common issues and gaps in international employment contracts, international employment contracts faqs, generate compliant international employment contracts with deel, key takeaways.

• An international employment contract is a legally binding agreement between an employer from one country and an employee from another.
• These contracts are critical in a multinational employment arrangement since they help the company comply with nuanced labor laws, can serve as evidence in case of a dispute, and are a legal requirement in specific countries.
• The contract must comply with the local employment laws in the country where the employee is a tax resident.

Hiring employees from overseas has many benefits—it helps companies broaden their talent pool, build cultural diversity, and lower employer costs.

However, companies hiring internationally have to navigate a new host of employment laws. Specifically, they must create employment contracts that comply with each new hire’s local labor laws, tax requirements, statutory benefits, and other hard-to-manage compliance considerations . 

This article guides you through the essential elements of international employment contracts. You’ll also get the necessary steps to build a comprehensive and compliant contract that safeguards your company against legal and financial penalties.

Disclaimer : This post is provided for informational purposes and should not be considered legal advice. Seek advice from an employment law firm for more info.

An international contract is a legally binding agreement between an employer from one country and an employee from another, which must comply with the employee’s local employment laws. The employer’s local employment laws don’t apply when hiring abroad.

International employment contracts can’t follow a single template for every international hire since labor laws differ from country to country. Each contract will require different employee benefits such as minimum wage, overtime policy, termination clauses, and intellectual property rights depending on the employee’s country of tax residence. 

For instance, if you’re a US company hiring employees in Colombia, Italy, and the Philippines, you must explore each country’s local labor laws and tax regulations to create three unique contracts.

International employment contracts are necessary when you hire an employee who resides in a foreign country while working for you.

The increase in remote work and global hiring has brought many employees and businesses into this situation. The employer is based in one country, while the employee works from their home country or lives as a digital nomad and travels through multiple countries while working.

Some employers relocate their employees to the country where the company is based. In this scenario, you don’t require an international employment contract since the employee resides in the same country. Their income becomes locally sourced and subject to the country’s taxes.

Note: US residents who work abroad still have to pay US income tax, but they may obtain tax exemptions if their host country has a tax treaty with the US.

Global hiring brings more complexity to business relationships and exposes companies to legal risks. An international employment contract is critical for both employer and employee protection in a multinational employment arrangement.

It serves as a guide and evidence in case of a dispute

In case there’s a dispute between the employer and the employee, addressing the written contract serves as a point of reference to help resolve the matter. 

For example, suppose the contract includes a non-disclosure agreement (NDA), and the employee shares confidential company information with an unauthorized party. In that case, the company can refer back to the contract to inform the employee and use the contract as evidence should the issue escalate. 

It helps you comply with nuanced international employment laws

Labor laws vary by country—minimum wages, legal reasons for contract termination, and probation periods can be totally different in LATAM countries compared to the Balkans or Asia.

Employers must create a contract that provides employees with their country’s unique statutory employment rights to avoid legal and financial penalties. If a dispute is resolved by arbitration, the court will decide based on local laws.

Keeping up with the intricacies of international labor laws can become quite complicated when hiring from multiple countries, especially for small human resources teams. The risk of not having a proper contract is too severe. 

One solution that provides companies with legal protection could be to open a subsidiary company and operate locally. However, you may not have the time and resources to undergo this demanding process. Instead, you can rely on a global employer of record (EOR) to offer expert knowledge of local regulations.

An EOR is an organization that hires international employees on your behalf, assuming complete legal liability instead of you. EORs are typically in charge of drafting the necessary documentation and onboarding new hires, running your global payroll, administering employee benefits, filing taxes, and terminating contracts when the time comes.

EORs operate with teams of local experts with the necessary knowledge to ensure compliance with local employment laws when creating international employment contracts.

Local laws usually require it

Employers and employees sometimes need to sign an employment contract in some other countries, like Spain, Belgium, or Brazil. However, a written employment contract is mandatory in many countries, including the UK, China, and New Zealand, regardless of the employer’s location, especially for work permits.

Deel Employer of Record

Hire employees globally with the #1 employer of record.

You recruited the ideal foreign candidate . Now it’s time to define the employment relationship. When drafting the international employment contract, include these nine essential elements:

1. Basic details

The beginning of the contract should include the basic information about the employer, employee, and the job the employee will perform:

• Employee personal information (full legal name, address, tax identification number)
• Employer information (company name, address, employer identification number)
• Contract start and end date

When you create an international employment contract using Deel’s contract workflow, you’ll be prompted to enter the employee’s personal details, location of employment, and indicate any visa requirements.

2. Type of employment contract

Define the type of contract based on the number of hours the employee will work and the length of employment:

Full-time contract or part-time contract

Fixed-term contract or indefinite-term contract

Some countries may require an indefinite-term contract after a specific period, so you should define the reason for and length of fixed-term employment. For example, the employee may be a substitute for an employee on parental leave or a seasonal worker.

Additionally, if you haven’t at this point, spend time evaluating whether you should classify the new hire as an employee or an independent contractor . Failure to properly classify the employee may leave you guilty of worker misclassification and subject to fines.

Deel success stories

Discover how Project44 gets added peace of mind from misclassification and saves around $500,000 a year with Deel Shield .

Deel Shield gave us peace of mind when hiring people as contractors in any part of the world. I don’t have to worry anymore about compliance. It feels much safer.

— Chloe Riesenberg ,

People Specialist, Project44

3. Working hours and overtime policy

Define the working hours and your overtime policy if the employee’s position allows overtime work.

In most countries, the standard working hours range from 40 to 44 hours per week. Other countries may have different regulations. For instance, European Union (EU) states that workers:

• Can’t work longer than 48 hours per week
• Need to have at least uninterrupted 24 hours of rest every week
• Need to have at least 11 hours of rest every day

When you create an international employment contract using Deel’s contract workflow, the platform will prompt you with standard work hours per country norms. 

4. Employee compensation

Employee compensation, minimum wage , and payroll laws differ around the world. For example, some LATAM and Asian countries require a 13th-month pay for full-time employees, while in some countries, it’s only considered a good practice.

Global Hiring Toolkit

Global salary insights.

When creating an employment contract through Deel, the platform will provide market rate insights per country, job title, and seniority level and autofill the correct currency per local requirements.

5. Employee benefits 

Mandatory benefits also differ depending on the country . Mandatory benefits include statutory benefits such as social security, health insurance, workers’ compensation, and paid time off. They’re different for every country, so you must ensure that your international contract guarantees a foreign employee all of their statutory rights.

To understand the overall employment cost, use our employee cost calculator that factors in the cost of local employer benefits requirements.

Employee Cost Calculator

The Deel platform enables you to include mandatory government-provided healthcare and pension policies that apply depending on the employee’s location. You may have the option of adding a secondary, private healthcare plan if additional benefits are available. 

6. Probationary period

The law in the employee’s country may define how long a probationary period can last. After the probationary period ends, the employer must give the employee an employment agreement in most countries, as you cannot renew them.

In some countries, like Turkey, you can hold the employee on probation for up to two months. In Belgium, for example, a probation period is no longer allowed. On the other hand, the United Arab Emirates has probationary periods of up to six months.

When creating a contract through Deel, applicable fields will be auto-filled by default, using compliant language and standard practices for the local labor market.

7. Termination policy and notice period

In most countries, you must have a valid cause or mutual consent to end an employment contract. In an international employment contract, local regulations regarding termination apply.

Note that in most countries, there are certain restrictions or prohibitions regarding employee termination. Here are a few examples:

• You cannot fire an employee during maternity leave
• You cannot fire an employee because they filed a complaint against you
• You cannot fire an employee on sick leave without a just cause
• You cannot fire a pre-pensioner without a just cause

International employment contracts must also include a notice period clause, ranging from ten days to two months, depending on the country. The notice usually needs to be in writing.

Depending on the employee’s country, you may also be required to pay severance. For example, in Ireland, only employees dismissed for being redundant get severance pay if they worked for the employer for two years.

To reduce the risk of costly lawsuits and legal claims from the terminated employee, both parties should agree on a termination settlement that includes the following:

• Severance payment based on the country’s termination laws
• Additional severance payment based on local best practices, if any
• A full waiver and release from any potential further claims

The reason for terminating an employee doesn’t necessarily have any bearing on the termination method or amount of severance to which the employee is entitled. This depends on the country or territory of the employee.

Discover how switching to Deel saves Teamflow one week of admin per month by enabling voluntary terminations to process directly on the Deel platform in just three steps.

8. Intellectual property rights

Having an international employment contract is critical if you want to protect your intellectual property . Intellectual property, which may include designs, copyright, trade secrets, and company know-how, typically belongs to the employer as long as the employee created it under the employment contract. Anything created outside of this contract is considered the employee’s intellectual property.

Also, include the IP protection clause in the independent contractor agreement if you work with contractors. In some countries, independent contractors are entitled to their intellectual property unless the contract states otherwise.

When creating tailored employee contracts via the Deel platform, you can seamlessly transfer IP ownership to you. Similarly, hiring independent contractors through Deel has built-in IP clauses that assign all contractor-created work to the company.

9. Confidentiality requirements

International contracts should also include post-termination restrictive covenants preventing employees from sharing confidential information with unauthorized parties. These agreements are valid during the employment period as well and may include the following:

Non-compete agreements

Non-disclosure agreements (NDAs)

Customer non-solicits

Employee non-solicits

The length of the restriction period depends on the country. Some agreements may not be enforceable in some countries or only under specific circumstances. For example, post-termination customer non-solicits are not enforceable if you hire someone from Mexico.

Add compliant non-disclosure agreements to existing contracts using Deel’s pre-written standard NDA document or upload your own signed NDA. All new and existing employees and contractors can countersign the form right on the Deel platform. 

10. Additional country-specific clauses

If the country you hire from has any specific provisions commonly included in local contracts, you may also want or need to include them.

For example, Rome is an EU regulation determining the law governing contracts concluded within the EU from December 17, 2009. It applies to all contracts in EU countries except for Denmark. 

According to this regulation, the parties involved in a contract have freedom of choice of law and can choose which law they want to govern them. However, the provision still ensures that employees receive their local employment rights.

If the parties don’t choose a governing law, the law of the country where the employee performs most of their work applies. 

Even the most attentive international employment contracts can contain mistakes. Some of the most common payroll and compliance issues and gaps include the following: 

Incorrect CBAs (collective bargaining agreements)

A collective bargaining agreement is a written, legally binding agreement between an employer and a union representing the workers. Some countries (especially in the EU, like Sweden or Denmark) require you to sign a CBA as part of the employment contract. If you fail to do so, or if it does not follow the specific legislation set up for this type of agreement, you might find yourself in hot waters.

Solution: An EOR like Deel offers the most robust compliance in the industry and will ensure you comply with local employment laws, tax codes, and regulations, with in-house legal specialists to create and review international contracts. Deel’s Compliance Hub serves as a one-stop shop for all things compliance by automatically tracking the latest and upcoming regulatory changes and proactively monitoring your workforce and alerting you to possible compliance gaps.

Continuous Compliance™

Unlock continuous compliance™ with deel.

Global payroll issues

As the company expands internationally, your financial team needs to plan for new factors affecting the payroll process. These factors may include different bank charges for international money transfers, currency exchange, and payment method availability.

Solution: with Deel’s built-in global payroll solution, you can run accurate, on-time payroll in just a few clicks. Learn more about global payroll or watch the video below. 

Inaccurate salary increases 

Some countries clearly regulate when and how remuneration can increase. These regulations can range from setting a maximum number of times per year when salary rises are allowed to imposing a mandatory percentage by which salaries must be increased according to inflation, the number of years spent in a company, and so on.

For example, in Serbia, employees have a legal entitlement to a salary increase of 0.4% of their net salary for every year spent with the employer.

Solution: Local labor laws constantly change. Deel comprises the best legal experts in countries worldwide to keep every contract up-to-date quarterly.

Unused PTO and accrued time-off

When employees leave a company, they are often entitled to a payout for the leave time they have not used. Both country-specific legislation and internal company policies can regulate this. 

Solution: When you hire through Deel, mandatory paid leave regulations are automatically built into your employment contracts as needed.

You can effortlessly manage employee time off through our Slack plugin , ensuring a simple, automated process of requesting and approving PTO and easily seeing who’s off and when. 

Can an independent contractor have an international contract?

Yes, independent contractors can also have international contracts when working with foreign clients. These contracts define the relationship between the contractor and the client, outlining the scope of work, payment methods, deadlines, and other relevant aspects of the business arrangement.

Independent contractor agreements protect both the client and the contractor, clearly outlining that the client isn’t a legal employer and doesn’t need to provide the contractor with statutory employment benefits.

Do expatriates need an international employment contract?

Usually, if a US expat lives and works abroad and is on a foreign company’s payroll, they must have an international employment contract. If a US company still employs the expat, the answer will be determined case-by-case.

Are there verbal international employment contracts?

In many countries, verbal agreements are valid, but when you hire internationally , it’s recommended to have a written contract to avoid disputes and help solve them more easily.

What are the advantages of international employment?

International employment can bring many benefits to companies. For example, employers may hire from countries with a lower cost of living, which decreases their overall employer costs. Also, they can search for global talent when specific skills aren’t available locally.

Global talent also provides employers with different cultural perspectives, first-hand experiences from a new market, and coverage for multiple time zones, which may facilitate global expansion.

In what language does the international employment contract need to be?

In the majority of countries, the language of the international employment contract isn’t determined by the law. It can be in any language that both parties signing the contract understand.

International agreements are usually in English, although some countries like Indonesia or China require them in one of their national languages.

Writing an international employment contract on your own is possible. But it’s also exhausting, time-consuming, and full of risk. You also need to have it reviewed by legal experts familiar with the labor laws of the particular country you’re hiring from. It’s complex. But it shouldn’t stop you from international hiring.

Deel is a global hiring platform that enables companies worldwide to hire legally in 150+ different countries hassle-free . You can onboard new employees in minutes, have them sign fully compliant contracts , pay them in a single click, file taxes automatically, and offer employee benefits that may otherwise be unavailable. 

We act as an employer of record and take all legal responsibility for your global team while you manage their day-to-day activities. Today we are the largest EOR provider globally, with over 20,000 active employees under our 95+ entities.

Sounds like an ideal solution for your expansion plans? Book 30 minutes with a product expert to get your questions answered.

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Gareth Wadley

View articles

International assignments: Key issues to consider

What legal issues do you need to consider when it comes to sending employees overseas?

The number of employees working abroad is increasing. As it becomes more common, some assume this will lead to greater standardisation, with template assignment letters the norm.

However, the legal, tax, pension and other variables involved in international assignments require a more bespoke approach, leaving little room for standard documentation. We outline some key issues to address below.

What is an assignment?

Also referred to as a secondment or transfer, an assignment might be internal (to a different role abroad with the same employer) or to an external employer. A key characteristic of an international assignment is that an employee from one legal entity and country ('home' country) temporarily performs services in another country ('host' country).

Potential assignment structures

There are a number of different ways in which assignments can be structured and documented. Which approach is appropriate will depend on a range of issues including employment law, tax, pension, social security and regulatory implications as well as the expectations of employees. Five frequently used assignment structures are:

• the employee continues to be employed solely by the home employer;
• the contract with the home employer is suspended and the employee enters into a local employment contract with the host employer for the assignment;
• the contract with the home employer is terminated with a promise of re-employment at the end of the assignment. In the meantime, the employee enters into a local employment contract with the host employer;
• the contract with the home employer is suspended and the employee enters into a contract with an international assignment company (IAC) within the employer group; or
• the contract with the home employer is suspended and the employee enters into a contract with both an IAC and the host country employer.

Which is best?

When deciding on the best structure for the circumstances, some questions to consider are:

• Do the host country’s laws require employment by a local entity, ruling out sole employment by the home employer?
• Where there is no contract of employment in place with the host employer, could local laws presume that the host is the de facto employer?
• If the home contract is “suspended”, is the home employer prepared to accept the legal uncertainty, in employment law terms, that this status brings?
• In a dual contract structure, who will bear the greatest risk of being liable for employment claims – host, home (or the IAC)?
• Will the employee accept the termination of his/her home contract?
• What is the impact on pension and benefit schemes, social security and tax?

Are there key terms in the home contract that require special consideration and protection, for example, restrictive covenants and confidentiality?

Which national law applies, when and to what? Which courts would have jurisdiction in the event of a dispute?

Who pays for, and manages, the employee during the assignment and will the employee return to the home country?

Looking forward

It is inevitable that documenting assignments will become a smoother process as employers become more familiar with the issues involved. However, the range of significant personal, legal and financial implications will mean that a degree of tailoring will always be necessary, in order to avoid negative repercussions.

Gareth Wadley is principal associate at Eversheds

Further reading

Paying your way: International tax and benefits

Companies expect to increase international assignments

How HR can improve LGBT+ employees' access to international assignments

How territorial jurisdiction works

How to get the most out of global mobility

Hot topic: Key issues for the new government

Three-quarters of Europeans would consider international roles

Rise of 'global nomads' causes problems for employee benefits strategy, Mercer study shows

The Mercer Mobility Exchange website and its divisional websites may be translated for your convenience using translation software powered by Google Translate, a free online language translation service that can translate text and web pages into different languages. Reasonable efforts have been made to verify the reliability of the translation service, however, no automated translation is perfect nor is it intended to replace human translators. Mercer does not guarantee the accuracy of the translated text. Some pages may not be accurately translated due to the limitations of the translation software. Text in images, PDF files, Word documents or other document types cannot be translated. The official text is the English version of the website. Any discrepancies or differences created in the translation are not binding and have no legal effect for compliance or enforcement purposes. If any questions arise related to the accuracy of the information contained in the translated website, please refer to the English version of the website which is the official version

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

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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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International assignments: Five steps to seconding an employee overseas

With more organisations seeking business opportunities abroad, international assignments are proving to be a convenient way to ensure that employees with the relevant skills and knowledge are in the right place at the right time. There are many factors with which organisations considering an overseas assignment need to deal before the secondment. Below we set out some of the essential points:

1. Ensure employment documentation is in order

Where an employee will be seconded to another organisation (the “host” organisation) during the assignment, but will remain employed by the “home” organisation for the duration of the assignment, the home organisation should enter into a letter of assignment with the employee. This will set out the changes to the employee’s terms and conditions of employment while he or she is undertaking the assignment. Another document that global employers should consider putting in place is an international assignments policy , which should set out the organisation’s approach to international assignments.

2. Ensure employee is aware of changes to terms and conditions

Often there will be many changes to the employee’s terms and conditions while he or she is undertaking an international assignment , for example changes to salary and benefits. Some employees assume that they will be entitled to certain benefits or they may misunderstand the implications of the assignment. For example, the employee might assume that the employer will pay his or her children’s school fees and for private health insurance. To ensure there are no nasty surprises, it is important for the employee to be clear about the changes to his or her contract of employment, and the changes should be set out in the letter of assignment .

3. Consider immigration requirements early on

Obtaining immigration permission for an employee to live and undertake an assignment overseas can be a long process, and the success of the application may depend on various factors. The organisation should consider obtaining expert assistance with the immigration application. Making preparations early will help to ensure that the organisation can deal with any obstacles that arise and that the assignment can start as planned. Organisations may also need to help the employee with obtaining immigration permission for his or her family where they will be accompanying the employee on the assignment.

4. Consider tax implications

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The tax and social security implications of an overseas assignment for the employer and employee may be complex. Employers should seek specialist advice on these issues, so that they are not surprised about the cost implications. They could also arrange for the employee to receive expert advice.

5. Ensure the employee is prepared

Undertaking an international assignment can be a great professional and personal experience for an employee. However, the success of an assignment is likely to depend on the extent to which the employee is prepared for what lies ahead. Helping the employee to prepare for the assignment , for example by providing the employee, and perhaps their family, with language and culture classes, can help to ensure that the employee knows what to expect and settles in to his or her new role more quickly.

Bar Huberman

Bar Huberman is a principal employment law editor at XpertHR, working on a number of resources including the good practice guides, line manager briefings and webinars. Before joining XpertHR in 2009, Bar was a solicitor at a firm in Brighton. She specialised in dispute resolution, including workplace disputes, and non-litigious employment law.

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I am so very pleased to see that Point 5 has made it onto the list. I am a cultural trainer and executive coach who delivers trainings to individuals, couples, groups and children who are moving abroad and/or being repatriated. The training is an integral part of the move. It no only delivers information about the country, city/town but informs client(s) what to expect when they arrive, assisting in the adjustment process. Happy home life, happy work life balance.

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Short-term international assignments: How to achieve consistency

We previously discussed how in today's fast-paced business environment, the need to deploy employees to work outside of their home country can sometimes lead to many short-term assignees travelling on a business visa to avoid the expense and bureaucratic process of getting work authorisation. In addition, many managers may inadvertently create ‘stealth’ expats by asking short-term assignees to stay on for another month or two, thereby creating host country tax and social security withholding requirements, and possibly immigration infringements too. ECA has also observed more ‘floating employees’ sent to work in countries where the employer has no registered entity and this potentially could create a corporate tax presence for the non-resident employer. To account for these risks and to keep pace with an internationally mobile workforce, companies need to rethink how they structure employment arrangements, policies and processes accordingly.

Important issues to consider include:

Contractual arrangements

When an employee is sent on a short-term assignment, the individual is typically issued with an 'assignment letter', or 'assignment agreement'. This letter outlines the benefits (allowances, reimbursements, etc) that the employee is entitled to receive during the period of assignment to the host entity. However, it is important to consider how any underlying employment contract, with the home company, interplays with the separate assignment letter. In general, an employee on a short-term assignment remains an employee of their home company during the length of the assignment, but with certain rights and benefits suspended/hibernated and replaced by relevant terms and conditions contained within an assignment letter. Hibernating a home country contract can, however, complicate potential dismissals as the home country contract has not been terminated, but will ‘spring back to life’ at the natural end of an assignment or once an assignment has been terminated. 

The role of an assignment letter (agreement)

Short-term assignments are highly complex. Hence, it is crucial to have proper documentation in place to clarify and provide guidance. An effective assignment letter not only benefits the employee, but also the employer (HR, legal, tax and payroll, for instance). The assignment letter should clearly spell out the compensation and benefits (per diems, reimbursements, serviced accommodation costs etc) that the employee would receive during the short-term assignment, thus making all parties aware of assignment entitlements and mitigating any dispute or retroactive negotiations in the future. 

An appropriately drafted assignment letter can also minimise potential financial or reputational risk for non-compliance and help mitigate potentially adverse corporate tax implications. So, it is important that the assignment letter documents the responsibilities of the home and host country companies if the economic employer principles discussed below are to be avoided. Hence, it should address such issues as:

• The assignment start and intended end date;
• The employee’s specific duties while on assignment;
• The employing entity while on assignment;
• To whom does the employee report while on assignment?
• Who determines the holidays and work hours of the employee?
• Who will be responsible for any disciplinary issues during the assignment? 
• Who can terminate the contractual arrangements entered into with the employee? 

How long an assignment is anticipated to last has an important bearing on immigration and tax compliance regulations. For example, in the United States, it is possible to exclude certain travel, meals and accommodation expenses from federal tax if an assignment is expected to last less than 12 months. However, should the assignment length change from less than one year to greater than one year, the expenses previously considered non-taxable would be deemed taxable from the date of the change in ‘intent’. Consequently, the anticipated or intended assignment duration should be supported through appropriate language in the assignment letter. 

The choice of language used in an assignment letter can also have implications for the taxability of certain allowances and benefits. For example, there is a distinction between an employee sent to Japan for business travel and one sent under a secondment arrangement. An employee ‘seconded’ on a short-term assignment to Japan cannot exempt income from taxation under the 183-day rule, whereas a ‘business traveller’ or ‘visitor’ can potentially do so based on facts and circumstances. An assignment/secondment agreement for employees sent to Japan for short-term projects should therefore use consistent terminology to qualify for the preferential tax treatment. 

Cost allocation

Who picks up the costs of a short-term assignment can be a source of much debate in many organisations when an employee is temporarily assigned to work in another country. This is because costs need to be borne in the correct location to ensure that the appropriate tax deductions can be claimed by the group. 

Consider the potential tax risks when an employee is being assigned internationally to another company within a group. Certain tax authorities adopt an ‘economic employer’ approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article (economic employer is discussed further here ). One of the conditions of Article 15 states that if the assignee’s salary and costs are recharged to the host entity, then the host country tax authority will treat the host entity as being the ‘economic employer’ and therefore the employer for the purposes of interpreting Article 15. In this case, tax relief would be denied and the employee would be subject to tax in the host country even if the individual spends less than 183 days there. Short-term assignments can also create a corporate tax liability in the host jurisdiction if cost allocation is not carefully managed.

To help minimise any unexpected tax surprises, it is advisable to put an agreement in place, which specifies how costs will be managed during an assignment. An inter-entity agreement should be drawn up between the host company and the assignee’s home company. This agreement governs how costs associated with the assignment will be funded. An inter-entity agreement is in addition to the assignment letter (agreement) between the employee and the home company.

Short-term assignments now take all shapes and forms, with short-term projects, weekly commuters, and extended business trips becoming more common. A written short-term policy can be a cost-effective tool as it provides discipline and a framework that enables equity of treatment amongst assignees and reduces the number of employees negotiating their own packages. It can set out logically the steps to be taken in any relocation and the procedures to be followed.

It is advisable that each category of short-term assignment be housed in a separate policy document, as there is a possibility that employees will attempt to leverage off the best parts of other packages to suit their particular circumstances. Additionally, a short-term policy should be regularly evaluated against the current industry trends as well as the company’s business goals to make sure it is fit for purpose.

The short-term policy should address the following key issues:

• Should any host country tax liability arise, will the assignee receive any tax assistance?
• Will the assignee be on the host country payroll, home country payroll, an international assignee payroll, or multiple payrolls?
• Will the assignee’s pay be protected from exchange rate volatility?
• What happens when short-term assignments are extended and change from one assignment category to another? 

Managing exceptions

Exceptions to policy can be difficult to manage, requiring negotiations between the mobility team, the assignee and the business line for approval. They can also be costly, triggering unaccounted-for expenses and untracked ‘budget creep’, the impact of which is rarely calculated or consolidated across the business functions. 

Exceptions should only be granted under very limited circumstances and require written explanations and approval of the executive board or HR director. If carefully monitored, the number of exception requests can indicate that a particular process or policy component requires re-design or further instruction to a vendor. 

To ensure global equity and minimise budget creep, consider: 

• Creating a detailed policy governance process for identifying and capturing deviations to policy or process with a view to reducing or eliminating exceptions;
• Setting up a centralised system to manage and approve exceptions to help minimise expenses;
• Establishing a process owner for short-term assignments, someone with responsibility and authority to monitor and report on trends in exceptions;
• Creating a formal short-term assignment policy, as mentioned above, to minimise exceptions and foster consistency and clear communications.

Tracking potential risks

Tax and immigration irregularities are common for employees on short-term assignments. Accordingly, it is important to develop an education programme for employees and their managers to inform them about the risks of cross-border work and the consequences of non-compliance. 

Work permit and immigration infringements should not be underestimated as the penalties for individuals working outside their home country without the appropriate work authorisation can be harsh. Not all short-term assignees need immigration approval, but then again, some do. It is important to note that just because an employee may not trigger any host country tax liability it doesn’t follow that they are exempt from immigration requirements. Indeed, staying on the home payroll is one of the most common areas of risk for short-term assignees and it is not an indication that immigration approval is not required.  

For many companies, technology has become the key to achieving and maintaining compliance. Without proper monitoring, an employer may unwittingly be exposed to tax and social security risks. Diligent tracking of short-term assignees and a solid process to be able to identify risks up-front are key to ensuring compliance. 

Source: ECA’s Managing Variety in International Mobility survey

Once a company’s short-term population reaches a certain size, manual tracking of policy exceptions using Excel spreadsheets is unlikely to be sufficient to ensure compliance with now greater information sharing among tax and immigration authorities. So, if companies want to be ahead of the curve in managing short-term assignees, they need to start tracking them. This will require communications to be established between the business units, tax, HR, legal, payroll, etc early in the assignment planning process, as well as when any assignment extension is contemplated.

Coordination with payroll 

At the heart of the administration process is the payroll team and it is essential that the appropriate home and host country payroll personnel are involved in planning for short-term assignments. They are ultimately responsible for ensuring the accurate and timely delivery of the assignment package to employees, while managing the local jurisdiction compliance requirements with regard to tax and social security withholding. 

The home country payroll must be informed of the intended assignment duration and assignment package to be paid to the employee. The home payroll will need to understand whether the allowances and benefits will or will not be considered taxable to the employee. 

Assignment income, such as a short-term allowance or per diems, is often paid through the home country payroll to comply with standard tax treaty rules. Typically, if income is to be exempt of host taxes, the payroll costs should not be borne by a permanent establishment in the host country. 

If an employee triggers a tax liability, many host countries will require withholding of income taxes through a local payroll. Consequently, the host country payroll will need to be informed of the assignment package the employee is receiving to understand if these may be considered taxable in the host country, even if they are not taxable in the home country. The host payroll will also need the relevant social security applications to be made to ensure that contributions are paid to the appropriate tax authorities. 

Our three-part series of articles on short-term assignments has highlighted some of the complexities in structuring short-term assignments, and some of the challenges concerning immigration, payroll reporting and tax compliance. With proper planning and administration, short-term assignments can be an effective and efficient means of increasing the pool of potential employees for the international assignment programme.

Our Consultancy & Advisory team can help you manage your short-term international assignees as effectively as possible, whether you are looking for assistance with the  design or review of existing policies , the creation of  assignment letters ,  assignment cost projections or other support.

ECA's Short-term Allowance Calculator provides a choice of regional bases on which to create consistent allowances in the host location, whatever the nationality of the assignee. Find out more about the Short-term Allowance Calculator here  or request a demo .

If you haven't already done so, read the first two articles of this three-part series on short-term international assignments:

• Key considerations when structuring short-term packages
• Compliance challenges involved with short-term assignments

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FAQ’s: Structuring of International Assignments

Faq’s: structuring of international assignments.

There are many ways of structuring an international assignment. Many companies develop a special policy in which the structures of international assignments are described, and the applicable labour conditions are defined. Although a wide variety can be recognised, there are five different ways: 1. The “home closing” setup. In this situation, the initial employment in the home country will be terminated and replaced by an employment agreement in the host country. 2. The “Secondment” setup. In this situation, the initial employment agreement in the home country remains in place. But the employee will be temporary seconded to an employer in the host country. Usually, but not necessary, this is a company that belongs to the same group of companies the home company also belongs. 3. The “suspend” setup. In this setup there are two different approaches:To the initial employment agreement in the home country, an agreement between the employee and the employer of the host country is added, by which the authority and control of the home company is temporarily transferred to the host company; – The initial employment agreement is temporarily put aside and replaced by a local employment agreement or assignment agreement. – The “split employer” setup. In this case, the employee will work at home as well as the home country for two different formal employers. 4. The employer-employee relationship is defined in two various employment agreements. This setup is also known as the “split salary” setup. Which setup is chosen depends on the company policies, day to day practices of the company and possibilities the legislation in home and host countries allows.

There is no general legislation on which elements should be part of any assignment agreement. In the day to day practice, the following subjects can be distinguished. These subjects can be, but are not limited to: – Arrangements regarding the necessary visa; – Arrangements regarding assignment salary and allowances and benefits (company car etc.); – Arrangements on salary raise, bonuses, stock options and other benefits; – Arrangements regarding applicable labour legislation; – Arrangements regarding maintaining home country social security and pension; – Arrangements on (additional) insurances; – Arrangement regarding taxes on income payments and tax filing obligations and support; – Arrangements on return to home country guarantees; – All kind of practicalities, like move costs, house and school search housing costs, schooling costs for accompanying children, home visit costs.

There are three different situations: 1. The home and host country both belong to the EU (and Switzerland, Liechtenstein and Norway). In these countries, the EU a treaty on social security is applicable. This treaty determines which system of social security in which case is appropriate and consequently where contributions will have to be paid. Normally, the home country system can be maintained in case the assignment does not last longer than 24 months (which can be extended to 60 months); the employee is not replacing a former seconded employee, and the employee was part of the system of social security in the home country for at least one month. In such cases, the employer can file an application to the social security authorities for the so-called A1 statement. Please, note that under this agreement, it is not possible to maintain the home country system of social security for accompanying family members! It neither applies to the costs for medical expenses! Contributions and premiums will have to be paid in the home country. 2. The home and host country have agreed on a bi-lateral agreement on social security. It works the same as the EU method. However, every bi-lateral treaty has its own articles on applicable legislation, accompanying family members, duration and application procedures. The approval that the home system remains applicable is laid down in a Certificate of Coverage. Contributions and premiums will have to be paid in the home country. 3. The home and host country do not belong to the EU (and Switzerland, Liechtenstein and Norway) and do not have a bi-lateral agreement. In such cases, it might be possible to enter home country voluntary social security insurances. It usually offers a comparable home country level of social security. Premiums for these insurances will have to be paid in the home country, but it does not touch the obligation also to pay contributions to social security in the home country. It leads to double premiums and higher costs.

It depends. In some countries pension is part of the system of social security. In others, like The Netherlands, it is not. Focusing on the Netherlands, the company pension is part of the labour conditions and the state pension (“AOW”) is part of the social security system. The state pension part, therefore, is arranged in the EU treaty or bi-lateral agreements. The company pension is not. It is crucial to check the existing company pension agreement of the employer with the pension company. And if it is possible to maintain the accrual of pension entitlements during an international assignment of any nature.

In most cases, the answer is “yes” because most home country insurances only reimburse these costs up to the home country level. In other countries, these costs can be much higher, and limiting conditions are applicable. Professional advice is necessary to avoid unpleasant surprises.

The experts of EMG have extensive knowledge of international social security situations and legislation and have access to a database with existing EU and bi-lateral agreements on social security. Next to that, EMG has an extensive network of specialists in all countries where professional advice can be taken on these matters, including insurances on medical expenses.

Want to know more about the unique advantages of partnering with EMG?  Contact us or let us contact you!

• International assignment management
• Compensation & Benefits

International assignment guidelines & employment contracts

• Tax consulting
• Social security and pension plans
• Outsourcing
• Audit & Riskmanagement
• Business Visa
• Work/residence permits in Switzerland
• Overseas work/residence permits
• Social security
• Audit Riskmanagement
• Business Traveller
• Permanent establishment
• Payroll Switzerland
• Personnel management
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Our expertise includes international assignment guidelines and international assignment contracts. We are highly familiar with the Swiss market with regard to competitive international assignment guidelines and are able to come up with tailored, attractive, and cost-conscious international assignment policies for your company as well.

Thanks to our long-standing and highly extensive industry expertise, we can compile the above for you individually and in a manner tailored to your company’s industry, as well as “benchmark” your company against leading companies from your field.

We regularly work with our clients to compile new international assignment regulations and/or revise existing ones. When doing so, it is understood that existing guidelines, regulations, and contracts are adapted in a company-specific manner, and that the needs of your company are taken into account.

We would also be glad to examine only individual contractual components of existing contract templates, or guide you through the process of contract design and agreeing on the individual regulations (international assignments policy, local employment contract, international assignment contract, additional agreements, foreign and Swiss labor law).

Contact us with your questions on international assignment guidelines and contracts. We will work with you to find an optimal solution.

Cost sharing agreements & transfer prices In the case of international assignments for employees, the accompanying costs also need to be taken into account, and in many cases offset against the company of deployment. In order to be able to offset the costs in a manner usual for the external company, the first step involves clarifying the interest in the international assignment (specialist, trainee, job rotation etc.), and then deciding which unit will bear which cost component. Depending on the specific case, this may vary between 0% and 100%.

Companies should be aware that medium-sized companies are increasingly becoming the focus of company audits, as the fiscal authorities now possess the necessary resources and auditors are now increasingly retained to transfer pricing aspects.

The risk of transfer pricing often needs to be clarified with domestic and foreign tax authorities and the country-specific requirements taken into account. Due to the rapid developments in the field of transfer pricing, this requires the specific expertise of the tax experts involved.

Furthermore, all cross-border aspects also need to be represented in the transfer pricing documentation. Our transfer pricing specialists would be glad to assist you in this area with their interdisciplinary know-how.

Our key consulting services:

• Creating and revising international assignment guidelines and policies
• Reviewing templates for international assignment contracts or creating them while taking into account existing policies
• Providing, reviewing, and/or adapting local employment contracts
• Drafting suspension agreements in compliance with the selected contractual construct
• Working out special contractual clauses for taxes, social security, and labor law aspects
• Dissolution agreements and terminations in the case of overseas employment
• Cost transfer agreements and cost sharing agreements incl. breakdown of costs and statement of costs for further cost processing
• Advice on appropriate transfer pricing and compiling of internal transfer pricing guidelines
• Analysis and adaptation of existing systems for avoiding double taxation

Review of an international assignment contract

An employee with the position of CEO has been posted from Germany to Saudi Arabia. We reviewed the international assignment contract with our partners in Germany and Saudi Arabia, in particular with regard to the topics of severance and termination.

BEST PRACTICES - A small selection of cases from our day-to-day work:

• Benchmarking of European posting guidelines and creation of a custom policy for a Swiss company that is active across Europe
• Employment contract for an employee of a Swiss company working in India that takes into consideration Indian labor laws
• Review of international assignment contracts from Japan
• Drafting of dissolution agreements for internationally active CEOs and employees for contract termination during an international assignment
• Drafting of sample contracts for the passing on of costs for trainees from Switzerland on international assignments in the USA
• Drafting a cost sharing agreement for the assignment of the CFO of a German company as an interim CFO in Switzerland
• Pro rata passing on of costs for employees who are simultaneously working for multiple associated companies

• International assignments
• Visas & work permits
• Taxes & Social Security
• HR & Payroll

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Global Immigration and Mobility Handbook

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• Employment assignments
• LMIA-based work permits
• LMIA-exempt work permits
• Entry based on international agreements

In most cases, employers should consider work permits for international assignments. The general rule is that any foreign national doing "work" must obtain a work permit, unless there is an available exemption (i.e., business visitors). There are two types of work permits applicable to international assignments: work permits based on a Labour  Market Impact Assessment (LMIA) and LMIA-exempt work permits.

Work permits are divided into two programs: the TFWP and the IMP. The TFWP usually requires an employer to conduct extensive recruitment activities to try to identify a qualified, willing and able Canadian in the labor market for the position in Canada. If the employer is unable to identify a Canadian after the recruitment and screening activities, it can submit an application for an LMIA. Overall, the processing time for LMIAs and LMIA-based work permits is longer than the IMP process. As such, if a prospective candidate is eligible to apply for an LMIA-exempt work permit under the IMP, this is generally the route that Canadian employers would prefer for hiring foreign talent in Canada.

The LMIA-based work permits fall under the TFWP. The regular LMIA-based work permit process is unpredictable and costly, so it should be used as a last resort. The TFWP also includes an expedited LMIA program called the Global Talent Stream (GTS). GTS LMIA applications do not require the employer to advertise and conduct recruitment activities before applying for the LMIA. There are currently two GTS streams available (Category A and Category B). GTS LMIA applications are processed in approximately two weeks .

Category A is designed for high-growth companies that are looking to hire unique and specialized talent and that have been referred to the GTS program by a designated referral partner organization. Category B targets employers seeking to hire highly skilled foreign workers in specific occupations found on the global talent occupations list. The predetermined list reflects in-demand occupations and may be updated from time to time.

Employers applying for a GTS LMIA must develop a Labour  Market Benefits Plan (LMBP) as part of the application process. This LMBP is a summary of activities that the employer has agreed to complete in exchange for, or as a result of, hiring foreign workers. Each year, the government will review the LMBP commitments to measure and track the employer's progress. 

The IMP includes a variety of LMIA-exempt work permit categories, including many employer-sponsored work permit strategies. The most commonly used categories are outlined below.

Intracompany transfers

Multinational companies seeking to assign foreign nationals to Canadian positions often use one of the intracompany transfer work permit categories. Many of Canada's international agreements include intracompany transfer work permit provisions with slight variations with respect to eligibility requirements and work permit durations.

Generally, an initial work permit can be valid for up to three years and can be extended at least once.

Executive and managerial-level staff must supervise other managers or professional employees, although managing crucial company functions or processes may also qualify under some international agreements. Employment in a specialized knowledge capacity requires proof that the employee holds advanced knowledge of the organization's proprietary products, services, research, equipment and techniques. Some international agreements also require applicants with specialized knowledge to have advanced and unique industry-specific knowledge related to the position, at a level that is not ordinarily held by others within the industry. Under the General Agreement on Trade-in Services (GATS), a prevailing wage requirement for intracompany transferees in the specialized knowledge category is introduced. Under some other international agreements, such as the Canada-United States-Mexico Agreement (CUSMA) and the Canada-European Comprehensive Economic and Trade Agreement (CETA), intracompany transferees are not required to meet any wage requirement.

At the time of the work permit application, the employee must be employed with the foreign entity in a position similar to the proposed role in Canada, and must have at least one year of full-time, continuous work experience in the position within the three years preceding the date of the application. The foreign and Canadian entities must have a qualifying relationship, such as a parent-subsidiary, branch or affiliate relationship.

Reciprocal employment

This category can be used for international exchanges or assignments, both in public and private sector contexts. There must be a bilateral flow of talent between the foreign and Canadian entities that is related to the policy behind this category, which fosters complementary opportunities for international work experience and cultural interchange.

Businesses that use this exemption category should have a global mobility policy in place that creates equivalent opportunities for Canadians abroad. For companies to benefit from this work permit category, they should be able to produce evidence of reciprocity.

Employer portal

Many international agreements other than CUSMA, CETA and GATS allow international assignees of certain nationalities to obtain work permits without an LMIA, as long as they have arranged employment opportunities in Canada and meet program-specific eligibility criteria. These agreements include the following:

• Canada-Chile Free Trade Agreement
• Canada-Peru Free Trade Agreement
• Canada-Colombia Free Trade Agreement
• Canada-Korea Free Trade Agreement
• Canada-Panama Free Trade Agreement
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland (CUKTCA)

Three of the more commonly used agreements for international employment transfers are CUSMA, CETA and GATS, which allow certain professionals and skilled workers to come to work in Canada for periods of up to three years (90 days in the case of GATS), subject to extensions. Where applicable, CETA is increasingly being used for transferring senior personnel, and specialist workers coming to work in Canada.

CUSMA provides expanded mobility and foreign workers rights for citizens of the US and Mexico. There are provisions under CUSMA for business visitor entry and work permit categories for intracompany transferees, investors and traders.

CUSMA Professional is another work permit category included in the international agreement, which contains a list of over 60 occupations that have been identified as occupations for which there is a labor market demand in Canada. Citizens of the US and Mexico who have the requisite licenses, education requirements and/or work experience to qualify for these occupations, and have prearranged employment with a Canadian employer, may apply for a work permit based on their proposed occupation in Canada.

CETA provides entry to Canada for citizens of an EU member state. Within CETA, the two most commonly used categories are intra-corporate   transfers for senior personnel and specialists, which mirror CUSMA's intracompany transfer executive/senior managerial and specialized knowledge work permit categories, respectively.

Employees applying under either the senior personnel or specialists category must have one year of continuous work experience within the past three years , be currently employed by an enterprise of an EU member state and be temporarily transferred to a related enterprise (subsidiary, affiliate or branch) in Canada.

CETA also facilitates entry for business visitors and foreign workers under the independent professionals, investors and contractual service suppliers categories.

Since 30 December 2018, when the CPTPP was implemented, additional avenues for Canadian immigration were offered to individuals from 10 countries in the Asia Pacific region, including Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam . The CPTPP facilitates temporary entry for business visitors, investors, intra-corporate   transferees, professionals and technicians.

Certain countries have access to more application categories within the CPTPP than others. Australia and Mexico are the only countries that have access to all of the available categories at the time of this publication.

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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Expatriate Management/International Assignment Policy

Individual Offshoring: An Emerging Trend for Global Careers

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• Assignment Abroad

Considerations when Assigning Employees to Work Abroad

There are a number of considerations for employers who wish to assign their employees to work abroad. These will include meeting the immigration requirements of the country of posting and any employment laws which are in place in that country. Often employers will develop a relocation policy or similar document to deal with all of the conditions and practices applicable to the posting.

It is usual for a number of issues to be agreed prior to the posting which will include:

1.  Remuneration  including any incentive payments, any additional benefits relating to relocation and the currency of the remuneration.

2.  The tax position  – the length of the posting may affect the employer’s tax status within the UK and this should be clarified if necessary.

3.  National insurance contributions and benefits  – the regulations in relation to this aspect of a posting are constantly changing and therefore both parties should ensure that the situation is clarified to ensure that any social security contributions to be made are paid in order that any state benefits can be preserved.

4.  The law applicable to the posting  should be clarified. The parties to a contract may choose which law will determine their respective rights and obligations. However, even if the parties agree that the law of the country outside the UK is to govern the contract a UK employee cannot be deprived of any UK statutory employment rights that may apply. Where employees carry out duties in more than one country, the place where the employee habitually carries out their work will be decided by the length of time the employee spends in each location and where they have worked the longest.

In relation to the enforceability of the employee’s UK statutory rights, it is generally necessary to look at the territorial jurisdiction from which the UK statutory employment right is derived to ascertain whether the employee can bring a claim to protect or enforce their rights within the Employment Tribunals in this country.

Whilst employees and employers are free to agree to enhance these conditions, they may not reduce or exclude them. Therefore the right of an employee not to be unfairly dismissed under UK employment law cannot be avoided by the parties agreeing that another country’s law will govern the employment contract.

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Amended and Restated International Assignment Agreement - Cisco

Cisco Systems, Inc

170 West Tasman Drive

San Jose, CA 95134-1706

Phone: 408 526 4000

Fax: 408 526 1400

http://www.cisco.com

September 16, 2011

Wim Elfrink

I am pleased to confirm the amendment and restatement of your international assignment to San Jose, California, United States. This letter of agreement outlines the terms and conditions of the amendment and restatement of your international assignment. Your international assignment is also subject to the terms of Cisco153s Long Term International Assignment Policy (the "International Assignment Policy") and the Tax Equalization Policy as they apply to international assignees generally. However, where an express term of this Agreement and the International Assignment Policy conflict, this Agreement will govern.

Your point of origin is the Netherlands (the "home country") and your country of reference during your assignment is the United States (the "host country"). We understand you are a resident of the United States for tax purposes.

This Agreement supersedes and replaces, in its entirety, your previous Amended and Restated International Assignment Agreement dated February 15, 2010 and your previous Agreement of International Assignment from the Netherlands to the United States dated November 9, 2001 and any prior employment agreement except to the extent set forth in Exhibit A or as otherwise required by the laws of the Netherlands.

Your international assignment began on July 31, 2011.

Your job title is Executive Vice President, Emerging Solutions and Chief Globalization Officer. In this capacity, you report to John Chambers, or his successor(s) and/or designee(s). As the Executive Vice President, Emerging Solutions and Chief Globalization Officer, you are

responsible for such duties and responsibilities as Mr. Chambers or his successor or designee assign. You are required to travel internationally during your international assignment.

Although neither this assignment nor this letter alters your status as an at-will employee, it is anticipated that your international assignment will last for up to two years from July 31, 2011. Your international assignment may be extended if expressly agreed upon in writing by you and Cisco.

Salary and Bonus

You will remain an employee of the home country and be paid on its payroll. Your annual base salary will continue to be EUR 592,772 (USD 853,651 as of July 31, 2011) as approved by the Compensation and Management Development Committee effective as of August 1, 2010. You will also continue to be eligible to participate in Cisco153s Executive Incentive Plan ("EIP"). Your continued participation in the EIP will be subject to the terms and conditions of the EIP. Your target bonus percentage under the EIP for fiscal year 2012 will continue to be 125 percent (125%) of your annual base salary.

Your salary and bonuses will be paid to you in Euro from your home country less applicable deductions and withholdings; however, pursuant to the Tax Equalization Policy, you will receive a Host Country Tax Payment to off-set any additional amounts you are required to pay in taxes due to your international assignment on the same basis as other international assignees.

Life insurance, business travel accident insurance, retirement plans, and disability coverage will be provided from the home country while on assignment. Your health benefits will be provided by Cigna International while on assignment. For additional information about benefits coverage, please refer to the Benefits section on Cisco153s intranet and access the link to Worldwide Plans. Your vacation entitlements will continue to be governed by the policies in effect for the home country and your PTO accrual will remain unchanged. However, working hours, public holidays and sick leave will follow policies in effect for the host country, the United States.

Please be aware that in the case of a medical or security emergency, Cisco has contracted with International SOS ("ISOS") to provide employees working abroad with access to a full range of medical information and emergency services, including medical assistance, international healthcare, security services and outsourced customer care. Additional information about ISOS, is available on Cisco153s intranet at wwwin.cisco.com/employee/benefits/isos.shtml.

On-Going Allowances and Reimbursements

Cisco has adopted a "Balance Sheet Approach" in compensating employees on international assignments, to ensure that assignees can maintain purchasing power similar to that which they would have enjoyed in their home country, assuming the same salary, grade level and family size. Therefore, during your international assignment, you will continue to be entitled to the following allowances or reimbursements to cover additional costs incurred as a result of your

international assignment. In addition, any amount of allowance/reimbursement that is not used by you in any given month shall be carried over to the next month(s) and made available to you (in addition to the maximum allowance specified) in the subsequent month(s). Notwithstanding the foregoing, with respect to any allowance/reimbursement that would otherwise be treated as a deferred compensation arrangement under Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A") if the amount were carried over into a subsequent taxable year, any portion of such allowance/reimbursement that is unused as of each December 31 (including amounts carried over from a prior month in the same calendar year) shall not be carried-over into the next calendar year and made available to you. Cisco will reimburse you for business expenses in accordance with Cisco153s applicable reimbursement policies; however, if you incur any business related travel expenses that are not reimbursed by Cisco under such policies, any of the allowances below may be used to cover such expenses.

Housing Assistance:

Cisco will provide housing and utilities assistance in the United States. This housing and utilities assistance will be paid from the Netherlands payroll in the monthly amount not to exceed EUR 13,020 (USD 18,750 as of July 31, 2011) beginning July 31, 2011 (or whenever you occupy your long term housing).

Goods and Services:

Cisco will pay you a goods and services differential of USD 1,035 per month beginning in August 2011. The goods and services differential will be increased to USD 3,333 per month beginning in August 2012 and throughout your international assignment.

Property Management:

If you elect not to sell or rent your home country residence, Cisco will reimburse you for the costs for property management of that residence in accordance with the International Assignment Policy.

Dependent Education Reimbursement:

Cisco will pay direct bill costs of annual tuition for each of your dependent children attending elementary or secondary school at the host location with a cost not to exceed USD 50,000 in the aggregate per school year.

Annual Dependent Visit:

Cisco will pay you a USD 10,000 annual allowance for your dependents to visit you and the family in the United States.

Home Leave Travel Allowance:

Cisco will pay you a USD 50,000 annual allowance for you, your spouse, and your children to return to your home in the Netherlands. As a guideline, this allowance typically covers three trips per year.

Automobile Assistance:

The costs for the rent or purchase of two family-style automobiles, for you and your spouse will be paid on your behalf by Cisco. The annual cost is not to exceed USD 36,000.

Relocation Misc Expense Allowance:

Cisco will provide you a lump sum relocation allowance equal to EUR 34,720 (USD 50,000 as of July 31, 2011) beginning July 31, 2012 per year paid through payroll in the Netherlands for relocation, adjustment and transition assistance. Payment shall continue to be made on or about each anniversary of the commencement of your international assignment. This payment shall be in lieu of the Miscellaneous Relocation Payment set forth in the International Assignment Policy.

Maximum Benefits

The maximum value of benefits pursuant to the On-Going Allowances and Reimbursements section of this Agreement and including the value of any payments for fees associated with tax services provided by EY and other tax consulting services and the value of any benefits pursuant to Cisco153s Tax Equalization Policy, but excluding the value of any benefits under the Repatriation section of this Agreement upon completion of your international assignment, is not to exceed USD 508,420 with respect to benefits for fiscal year 2012 and USD 536,000 with respect to benefits for fiscal year 2013, based on the currency exchange rate of 1 EUR to 1.4401 USD in effect as of July 31, 2011.

Repatriation

Upon completion of your international assignment, Cisco will provide you with relocation assistance related to your move back to the Netherlands. This will include one-way business class travel for you and your qualifying dependents; shipment of household goods and personal effects and temporary living in your home country.

Assuming your international assignment is successful, upon its termination Cisco will attempt to employ you in a position comparable to your then current position and which utilizes the skills and experience you gained during your international assignment. If Cisco is unable to provide you with a position comparable to your then current position, Cisco will attempt to provide you with a position comparable to your position immediately prior to the commencement of your international assignment. Your base salary and target bonuses, in either case, will be at a level commensurate with the position offered. If Cisco is unable to offer you a position, your employment will terminate and Cisco will pay you an amount equal to 225 percent (225%) of your then current annual salary (the "Severance"). Cisco153s obligation to pay the Severance will be contingent upon your execution and the effectiveness of a release agreement in a form provided by Cisco within 30 days of your "separation from service" from Cisco as that term is defined in Section 409A. This Severance would be in lieu of any entitlement you may have to notice of termination, to pay in lieu of notice of termination, or to any other severance payment from any source. This section supersedes any termination of employment provision of the International Assignment Policy.

Your international assignment will be covered by Cisco153s Tax Equalization Policy and you hereby acknowledge that you have accepted all the terms and conditions set forth in Exhibit B. Your pay will be subject to annual hypothetical tax deductions in amounts determined by Ernst & Young ("EY"). Cisco153s philosophy regarding tax equalization is that as an international assignee, you will neither materially gain nor lose from the differences in income and social tax costs between your home and host country, within certain parameters. Tax equalization applies to Cisco equity awards as described in the Tax Equalization Policy. Cisco has retained EY, an independent tax accounting firm, to provide assistance with the preparation of both your home and local country tax filing obligations and to prepare annual tax equalization calculations. Please contact [ ] in EY153s Tax Department [ ] for any questions.

Fees associated with tax services provided by EY and other tax consulting services, including any services provided by your tax advisor in the Netherlands, shall be paid on your behalf by Cisco not to exceed USD 75,000 per year.

Notwithstanding the foregoing, if this Agreement or any benefit payable to you hereunder is subject to Section 409A and you are a "specified employee" (within the meaning of Section 409A) as of the date you separate from service from Cisco, then any payments scheduled to be made to you pursuant to this Agreement during the first six months following your separation from service shall be delayed and shall accrue interest at the applicable federal rate for such six month period. The delayed payments (and including any accrued interest) shall be paid immediately following the end of the six month delay. In no event shall Cisco be liable for any taxes or penalties imposed under Section 409A with respect to any benefit(s) paid to you pursuant to this Agreement. All reimbursements under this Agreement that are subject to Section 409A shall be made no later than the end of the calendar year next following the calendar year in which the applicable expenses are incurred and the Severance, if any, shall be paid no later than the 15th day of the third month following the year in which your international assignment terminates. Any tax equalization payments shall be paid within the time periods described in Section 1.409A-1(b)(8)(iii) of the Treasury Regulations under Section 409A.

Dispute Resolution

You and Cisco acknowledge and agree that any and all disputes or claims arising from or relating to your recruitment to or employment with Cisco (including but not limited to disputes or claims arising from or relating to this Agreement), or the termination of your employment, will be resolved solely and exclusively pursuant to final and binding arbitration in lieu of any evidentiary hearing before a government agency and/or a court trial before a judge or jury, pursuant to the terms of Cisco153s Arbitration Agreement and Policy, a copy of which can be found at http://wwwin.cisco.com/HR/employee/proprietary_info/agreement2arbitrate.shtm l. The agreement to arbitrate means that both you and Cisco have expressly waived any and all rights to a trial before a court or a jury.

Cisco153s personnel policies and standards of business apply to your assignment, unless a written exception is provided by a company representative authorized to make that exception or is otherwise set forth in this Agreement.

This Agreement sets forth the entire agreement between you and Cisco regarding your international assignment except that existing agreements with Cisco such as your agreement to arbitrate, your proprietary information and inventions agreement and agreement(s) establishing at-will employment are not superseded by this agreement, unless expressly provided to the contrary herein.

This Agreement can only be modified by a written document signed in writing by Randy Pond or his successor(s) or designee(s) and approved by the Compensation and Management Development Committee of the Board of Directors. Please note that Cisco reserves the right to unilaterally modify the provisions of this Agreement and/or the documents incorporated herein as legal requirements may dictate, new practices may require or for other reasons at the discretion of Cisco. In the event such modifications are made, notification will be provided to you.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of California (except its choice-of-law provisions).

We are excited to have you join our operations in the United States. If you are in agreement with the terms and conditions of your assignment as outlined in this letter and in the attached policies, please sign the two originals and return one to the person listed below.

In principle, accrued holidays must be taken in the calendar year in which they accrue. Excess holidays (i.e., holidays accrued during a certain year which have not been taken during the calendar year in which they accrued) must be taken between 1 January and 1 April of the subsequent calendar year in consultation with the Employer. If, after consultation, the holidays are not taken during the said period, the Employer shall designate the period during which the holidays must be taken. If, in spite of this, the designated holiday period is not taken, the claim to the excess holidays shall lapse.

Upon termination of the employment relationship, the Employee shall not be entitled to any salary over holidays and/or hours which have been taken but which have not yet accrued. The Employee shall be obliged to repay the Employer any salary already received over such holidays and/or hours at the end of the employment relationship.

If the Employee is unable to perform his work as a result of illness, he shall remain entitled to 100% of his last earned salary for a period of 52 weeks, unless the illness was caused intentionally by him or ensued from an infirmity in respect of which he intentionally gave the Employer false information when he entered into the employment agreement, in the event he causes an obstruction of or delay in the recovery process, or if the Employee:despite being able to do so:refuses to perform other suitable work for his own Employer or:with the prior approval of the Industrial Insurance Board:for another employer.

The wages will be reduced by:

- the amount of any financial benefit which the Employee receives under any statutorily prescribed insurance or under any insurance or from many fund which was agreed upon in or results from the employment agreement;

- the amount of income earned by the Employee, whether in or outside the employer-employee relationship, from work which he has performed in the period during which the

contractually agreed work could have been performed if he had not been prevented from doing so.

If the Employee153s incapacity for work was caused by a third party, the Employer shall not be obliged to pay the Employee153s salary or a supplement to his social security benefits. If, in that case, the Employee can hold a third party liable for loss of income in connection with his incapacity for work, he shall assign his claim against the third party to the Employer, for which he will receive an amount equal to the amount which he would have received if the third party had not been involved in the incapacity for work. The Employer will pay the amount to which the Employee is in that case entitled in monthly installments, the amount of which shall be determined by the Employer.

The Employer will not invoke the provisions contained above, if and insofar as the Employee cannot hold the third party liable.

The Employer has taken out accident insurance, i.e. "Cisco153s Worldwide Business Travel Accident Insurance (BTA)", for the benefit of the Employee.

Any violation of the obligation to maintain confidentiality as set forth in the preceding paragraph shall carry a penalty of NLG 10,000, immediately payable by the Employee to the Employer and without prejudice to any other claims which the Employer may have, including the right to full damages.

CISCO SYSTEMS, INC.

INTERNATIONAL ASSIGNMENT TAX EQUALIZATION POLICY AGREEMENT

I acknowledge having read the Tax Equalization Policy of Cisco Systems, Inc. ("Cisco"), located at http://wwwin.cisco.com/FinAdm/Tax/StockOptions/stock_faq.shtml , and understand the personal impact of the Policy. Any questions concerning this Policy with Cisco have been fully explained to my satisfaction. I accept that all interpretations under this agreement shall be controlled by the Policy of Cisco, which is included as part of this agreement. Cisco shall have the right and privilege at any time it deems necessary and proper to amend, add, or delete provisions to and from this Policy without prior notice.

I understand and agree that all tax positions affecting income, deductions and credits outside the scope of the Policy (i.e., amounts not covered by the Policy) are the responsibility of the employee. Cisco is not liable for any taxes, penalties, or interest resulting from a successful challenge by any tax authority of any item not covered by the Policy.

In addition, I understand the employee is fully responsible for all penalties and interest charges assessed by any tax authority due to the employee153s failure to (1) provide information to Ernst & Young on a timely basis, (2) notify Ernst & Young of any significant personal income or investment transactions, or (3) cooperate with Cisco with respect to the tax equalization process.

I understand and agree that Cisco will reduce my compensation by an estimated hypothetical tax. The estimated hypothetical tax is an amount which approximates my periodic estimated tax deductions calculated with reference to compensation, benefits, deductions and credits otherwise available to me had I remained in my home country, except as otherwise provided in this Policy. In return, Cisco will advance wages that I have not yet earned to assist with the payment of my actual home and host country tax liabilities within the limits prescribed by the Policy.

I understand that these wage advances provided by Cisco for payment of taxes constitutes an obligation by me to Cisco, which will be reconciled with the final liabilities that are Cisco153s responsibility through the annual tax equalization settlement calculation. After completion of the tax equalization settlement statement for each taxable year, I agree to repay any obligation for each taxable year within thirty (30) days. If I fail to repay any obligation to Cisco within thirty (30) days after completion of the tax equalization settlement statement, then, unless Cisco and I have agreed otherwise in writing, Cisco shall have the right to:

The total obligation will become immediately due and payable if my employment with Cisco or any of its affiliate corporations is terminated, whether voluntarily or involuntarily.

If I fail to furnish tax records in response to a request by Cisco pursuant to the Policy, or cease employment with Cisco or any of its subsidiaries for any reason before the tax records needed to complete the year-end tax equalization settlement statement under the Policy are available, then Cisco shall have the right to calculate such amounts by making reasonable assumptions of probable taxes. If an amount is owed to Cisco, Cisco shall also have the right to require immediate payment of such amount, including the right to reduce future amounts paid to me whether as wages, salary or other compensation for services performed in light of my having received wage advances that I have not yet earned, unless Cisco and I have agreed otherwise in writing.

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International Assignments

An international assignment is in question when an employee is assigned to work temporarily abroad. An international assignment can be carried out in the following ways:

the employee’s current Finnish employment contract is supplemented by a separate fixed-term assignment contract;

the sending and receiving companies act jointly as employers in which case they are both jointly liable for the employee’s employment benefits; or

the employee enters into an employment contract directly with the foreign employer.

In the first two cases, the employment relationship with the Finnish employer typically remains resting during the assignment. In the third case the employment relationship with the Finnish employer is usually terminated and the employee is employed by the foreign employer in accordance with the terms and conditions of the destination country.

If the employment contract has connections to more than one country’s legislation, the applicable law shall be determined in accordance with the Rome Convention. The employer and employee may, however, agree upon the applicable law by taking a reference of the applicable law in the employment contract. A reference to applicable law shall not, however, diminish such rights of the employee which she/he would have based on the mandatory laws applicable without such reference.

A Finnish collective agreement is applicable abroad if the collective agreement includes a mention of working abroad. The parties can also agree on the applicability of a collective agreement in the assignment agreement.

All in all, an international assignment requires thorough preparation, including clarification of various tax and social security questions. As regards international assignments lasting for more than one month, the Employment Contracts Act requires the employer to provide to the employee clarification of the main terms of employment in good time before the employee travels to the working destination.

It is recommendable to include at least the following clauses in an international assignment agreement:

place of work (host country, location, office)

work duties and working hours

applicable law and possible collective agreement

term of contract

salary and payment of salary (incl. the currency of salary) as well as remuneration and fringe benefits

annual holiday

travel documents (passport, visa, working permit) and reimbursement of travel costs

accommodation and residential costs

terms and conditions regarding the repatriation of the employee and reimbursement of travel costs to and from destination (incl. possible family members)

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Letter of Assignment - Long Term International Agreement between Align Technology, Inc. and Zelko Relic dated December 9, 2019

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Social Security

International programs, u.s. international social security agreements.

Introduction

Since the late 1970's, the United States has established a network of bilateral Social Security agreements that coordinate the U.S. Social Security program with the comparable programs of other countries. This article gives a brief overview of the agreements and should be of particular interest to multinational companies and to people who work abroad during their careers.

International Social Security agreements, often called "Totalization agreements," have two main purposes. First, they eliminate dual Social Security taxation, the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings. Second, the agreements help fill gaps in benefit protection for workers who have divided their careers between the United States and another country.

Agreements to coordinate Social Security protection across national boundaries have been common in Western Europe for decades. Following is a list of the agreements the United States has concluded and the date of the entry into force of each. Some of these agreements were subsequently revised; the date shown is the date the original agreement entered into force.

The Problem of Dual Coverage

Salary = $50,000 Employer Social Security Tax = $8,000 Employee Social Security Tax = $7,000 Income tax = $18,000 TOTAL $83,000

Effective tax rate = $33,000 (total tax) divided by $50,000 (salary) = 66%

Exacerbating the cost concern is the fact that workers who are subject to dual Social Security taxation usually receive no additional benefit protection for the contributions paid to the foreign country. Even if the worker resides abroad for several years, the duration of employment may not be sufficient for the individual to become insured for benefits under the host country's Social Security program. For all practical purposes, the contributions are lost.

The aim of all U.S. totalization agreements is to eliminate dual Social Security coverage and taxation while maintaining the coverage of as many workers as possible under the system of the country where they are likely to have the greatest attachment, both while working and after retirement. Each agreement seeks to achieve this goal through a set of objective rules.

A general misconception about U.S. agreements is that they allow dually covered workers or their employers to elect the system to which they will contribute. This is not the case. The agreements, moreover, do not change the basic coverage provisions of the participating countries' Social Security laws--such as those that define covered earnings or work. They simply exempt workers from coverage under the system of one country or the other when their work would otherwise be covered under both systems.

The provisions for eliminating dual coverage with respect to employed persons are similar in all U.S. agreements. Each one establishes a basic rule that looks to the location of a worker's employment. Under this basic "territoriality" rule, an employee who would otherwise be covered by both the U.S. and a foreign system remains subject exclusively to the coverage laws of the country in which he or she is working.

Each agreement (except the one with Italy) includes an exception to the territoriality rule designed to minimize disruptions in the coverage careers of workers whose employers send them abroad on temporary assignment. Under this "detached-worker" exception, a person who is temporarily transferred to work for the same employer in another country remains covered only by the country from which he or she has been sent. A U.S. citizen or resident, for example, who is temporarily transferred by an American employer to work in an agreement country continues to be covered under the U.S. program and is exempt from coverage under the system of the host country. The worker and employer pay contributions only to the U.S. program.

The detached-worker rule in U.S. agreements generally applies to employees whose assignments in the host country are expected to last 5 years or less. The 5-year limit on exemptions for detached workers is substantially longer than the limit normally provided in the agreements of other countries.

The detached-worker rule can apply whether the American employer transfers an employee to work in a branch office in the foreign country or in one of its foreign affiliates. However, for U.S. coverage to continue when a transferred employee works for a foreign affiliate, the American employer must have entered into a section 3121(l) agreement with the U.S. Treasury Department with respect to the foreign affiliate.

Under certain conditions, a worker may be exempted from coverage in an agreement country even if he or she was not assigned there directly from the United States. If, for example, a U.S. company sends an employee from its New York office to work for 4 years in its Hong Kong office and then reassigns the employee to work for 4 additional years in its London office, the employee can be exempted from U.K. Social Security coverage under the U.S.-U.K. agreement. The detached worker rule applies in cases like this provided the worker was originally sent from the United States and remained covered under U.S. Social Security for the entire period preceding the assignment in the agreement country.

The agreement with Italy represents a departure from other U.S. agreements in that it does not include a detached-worker rule. As in other agreements, its basic coverage criterion is the territoriality rule. Coverage for expatriate workers, however, is based principally on the worker's nationality. If a U.S. citizen who is employed or self-employed in Italy would be covered by U.S. Social Security absent the agreement, he or she will remain covered under the U.S. program and be exempt from Italian coverage and contributions.

U.S. Social Security coverage extends to self-employed U.S. citizens and residents whether their work is performed in the United States or another country. As a result, when they work outside the United States, citizens and residents are almost always dually covered since the host country will normally cover them also.

Some U.S. agreements eliminate dual coverage of self-employment by assigning coverage to the worker's country of residence, while others permit a self-employed worker to transfer his or her self-employment activity from one country to the other for a temporary period. For more information on country-specific rules, please review the individual country information linked above.

Despite the fact that the agreements are designed to assign Social Security coverage to the country where the worker has the greatest attachment, unusual situations occasionally arise in which strict application of the agreement rules would yield anomalous or inequitable results. For this reason, each agreement includes a provision that permits the authorities in both countries to grant exceptions to the normal rules if both sides agree. An exception might be granted, for example, if the overseas assignment of a U.S. citizen were unexpectedly extended for a few months beyond the 5-year limit under the detached-worker rule. In this case, the worker could be granted continued U.S. coverage for the additional period.

As a cautionary note, it should be pointed out that the exception provision is invoked fairly infrequently and only in compelling cases. It is not intended to give workers or employers the freedom to routinely elect coverage in conflict with normal agreement rules.

Workers who are exempt from U.S. or foreign Social Security taxes under an agreement must document their exemption by obtaining a certificate of coverage from the country that will continue to cover them. For example, a U.S. worker sent on temporary assignment to the United Kingdom would need a certificate of coverage issued by SSA to prove his or her exemption from U.K. Social Security contributions. Conversely, a U.K.-based employee working temporarily in the United States would need a certificate from the U.K. authorities as evidence of the exemption from U.S. Social Security tax.

When SSA issues a certificate certifying U.S. coverage, a copy of the certificate usually must be presented to the appropriate foreign authorities as proof of entitlement to the foreign exemption for the U.S. employee and the employer. When the other country issues a certificate certifying that the employee is covered by the foreign system, the employer can immediately stop withholding and paying U.S. Social Security taxes on the employee's earnings. The certificate should just be retained in the employer's files so it can be produced in the event the Internal Revenue Service ever questions why no taxes are being paid for the employee. A self-employed U.S. citizen or resident must attach a photocopy of the foreign certificate to his U.S. tax return each year as proof of the U.S. exemption from self-employment taxes. In accordance with Revenue Procedure 84-54, the foreign certificate serves as proof of the exemption from U.S. Social Security taxes for the period shown on the certificate.

Employers generally are required to request certificates on behalf of employees they have transferred abroad; self-employed persons request their own certificate. Certificates of U.S. coverage may be requested by writing to the address at the end of this article.

Requests should include the employer's name and address in the United States and the other country, the worker's full name, place and date of birth, citizenship, U.S. and foreign Social Security numbers, place and date of hiring, and the beginning and ending dates of the assignment in the foreign country. (If the employee will be working for a foreign affiliate of the U.S. company, the request should also indicate whether U.S. Social Security coverage has been arranged for the employees of the affiliate under section 3121(l) of the Internal Revenue Code.) Self-employed persons should indicate their country of residence and the nature of their self-employment activity. When requesting certificates under the agreements with France and Japan, the employer (or self-employed person) must also indicate whether the worker and any accompanying family members are covered by health insurance.

(N.B. The provisions for eliminating dual coverage apply to coverage and contributions under the U.S. retirement, survivors, disability and hospital (Medicare) insurance programs, and the retirement, survivors and disability insurance programs in the foreign countries. Some agreements may also apply to coverage and contributions under additional programs in the foreign country, such as insurance for short-term sickness, work accident and unemployment. As a result, workers exempted from foreign coverage by one of these agreements pay no Social Security taxes for these additional programs and generally may not receive benefits from them. In this case, the worker and employer may wish to arrange for alternative benefit protection.)

The Problem of Gaps in Benefit Protection

In addition to providing better Social Security coverage for active workers, international Social Security agreements help assure continuity of benefit protection for persons who have acquired Social Security credits under the system of the United States and the system of another country.

Workers who have divided their careers between the United States and a foreign country sometimes fail to qualify for retirement, survivors or disability insurance benefits (pensions) from one or both countries because they have not worked long enough or recently enough to meet minimum eligibility requirements. Under an agreement, such workers may qualify for partial U.S. or foreign benefits based on combined, or "totalized," coverage credits from both countries.

To qualify for benefits under the U.S. Social Security program, a worker must have earned enough work credits, called quarters of coverage, to meet specified "insured status requirements." For example, a worker who attains age 62 in 1991 or later generally needs 40 calendar quarters of coverage to be insured for retirement benefits. Under a Totalization agreement, if a worker has some U.S. coverage but not enough to qualify for benefits, SSA will count periods of coverage that the worker has earned under the Social Security program of an agreement country. In the same way, a country party to an agreement with the United States will take into account a worker's coverage under the U.S. program if it is needed to qualify for that country's Social Security benefits. If the combined credits in the two countries enable the worker to meet the eligibility requirements, a partial benefit can then be paid, which is based on the proportion of the worker's total career completed in the paying country.

The agreements allow SSA to totalize U.S. and foreign coverage credits only if the worker has at least six quarters of U.S. coverage. Similarly, a person may need a minimum amount of coverage under the foreign system in order to have U.S. coverage counted toward meeting the foreign benefit eligibility requirements.

People generally do not need to take action concerning Totalization benefits under an agreement until they are ready to file a claim for retirement, survivors or disability benefits. A person who wishes to file a claim for benefits under a Totalization agreement may do so at any Social Security office in the United States or the foreign country.

International Social Security agreements are advantageous both for persons who are working now and for those whose working careers are over. For current workers, the agreements eliminate the dual contributions they might otherwise be paying to the Social Security systems of both the United States and another country. For persons who have worked both in the United States and abroad, and who are now retired, disabled, or deceased, the agreements often result in the payment of benefits to which the worker or the worker's family members would not otherwise have become entitled.

The agreements also favorably affect the profitability and competitive position of companies with foreign operations by reducing their cost of doing business abroad. Companies with personnel stationed abroad are encouraged to take advantage of these agreements to reduce their tax burden.

Anyone who would like more information about the United States' Social Security Totalization agreements program--including details about specific agreements that are in force--should write to:

SOCIAL SECURITY ADMINISTRATION ATTN: International Agreements Office of Data Exchange, Policy Publications, and International Negotiations 4700 Annex Building 6401 Security Blvd. Baltimore, MD 21235

You can also write to this address if you would like to suggest the negotiation of new agreements with specific countries. In developing its negotiating plans, SSA gives considerable weight to the interest expressed by the workers and employers who will be affected by potential agreements.

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A U.S. Employer’s Guide to Paying International Employees

July 15, 2024, overseas talent is a valuable asset for your business, but paying them can be a legal and logistical minefield. let’s examine everything a u.s. employer needs to know about paying international employees..

Table of Contents

How to pay international employees, u.s. tax obligations when paying foreign employees, challenges and risks of paying international employees, need an easy way to pay international employees paylocity’s global payroll is the answer.

Big or small, U.S. companies today can easily tap into overseas talent with modern technology that enables remote work. But despite the sleek tech and cultural considerations, one basic thing remains: They need to get paid.

And paying international workers is undoubtedly more complicated than domestic payroll. You’ll face challenges like language barriers, cultural differences, currency fluctuations, varying salary expectations, and local labor and tax laws.

In this guide, we'll explore options for making overseas payments while staying compliant and competitive.

Before you start cutting checks, understand that there are legal and logistical prerequisites for paying employees beyond U.S. borders. The specific requirements vary based on how you establish your operations abroad.

Let's explore a few options for paying overseas employees and the scenarios they best suit.

Key Takeaways

• Options for paying international employees include using a global payroll provider, paying through your home country’s payroll, setting up a local legal entity, or outsourcing through a PEO or EOR.
• Local labor laws, tax regulations, and employment standards can be complex and present the biggest obstacles to hiring overseas — and there are steep consequences for non-compliance.
• Employers must consider the unique cultural differences in payment practices, local legal requirements, and the impact of currency exchange rates.

Pay the Employee on Your Home Country’s Payroll

There are a few situations that allow you to pay overseas staff via your domestic payroll. This can apply if you send a normally U.S.-based employee to a foreign country to work for an extended period of time.

• Foreign employer exception: If your employee is working in the U.K, you may be able to bypass local withholdings under this exception . Instead, your employee functions as “self-employed” and is obligated to pay local tax and social security filings.
• Payroll only registration: Some countries offer employers to register as “payroll only” and issue local payroll without registering as a local employer.
• Foreign payrolled: Some countries allow persons employed by a foreign organization without an in-country presence to self-declare as “foreign payrolled” for tax purposes.

While these are workarounds, generally, if you hire someone who lives permanently in another country, you’ll need to set up a separate payroll in that country.

Use Secondment or Leased Employment

Another option is to place allow your U.S.-based employee to temporarily work for another company registered in another country, also known as secondment. They’re still employed and paid by you, but they do their job at the other entity.

Leased employment is a form of secondment where you create “floating employees” by suspending their official employment. While overseas, they’re paid by an agent who then sends their services back to your company.

Set Up a Legal Entity Abroad

It’s possible to set up a new legal entity in the country where you want to employ workers, but this takes time and resources (and local employment expertise). It’s only really a viable option if you plan to establish a long-term presence in that country.

If you do plan on expanding overseas, there are three types of local entities:

• Representative office: A foreign organization’s local presence that engages in non-commercial activities such as market research and customer support but doesn't directly conduct business or generate revenue.
• Branch office: An extension of a parent company established in a foreign country to conduct business activities, including sales and contracts, while remaining legally part of the parent organization.
• Foreign subsidiary: A separate legal entity owned by a parent company, established in a different country, that operates independently and conducts full business activities. These types of entities may be eligible for local tax rebates.

Outsource With an Employer of Record (EOR) or Professional Employer Organization (PEO)

Rather take a more hands-off approach? Some businesses choose to pass of responsibility to local entities via an EOR or PEO.

• Employer of Record: An EOR is an entity that legally takes responsibility for your employees in a particular country. It signs a service agreement with your business, agreeing to pay the workers’ wages and perform hiring, onboarding, and other HR tasks.
• Professional Employer Organization: A PEO functions similarly, but serves as a co-employer , while your U.S.-based organization remains the legal employer and controls the daily operations.

Both of these approaches provide local expertise and the resources to manage employees in more than one overseas country. In this setup, international staff are normally entitled to benefits such as health insurance and social security.

Use a Global Payroll Provider

For a simpler way of managing international salaries, use a global payroll provider. There’s no need to set up local payroll vendors or multiple systems, and the provider will ensure you stay compliant with local regulations.

Global payroll providers can handle payroll operations in multiple countries and currencies, as well as pay your regular employees. They consolidate all your employment data into a single platform and usually include other HR features like time tracking and employee self-service .

Take an Alternative Approach: Pay Independent Contractors

Another option is to hire overseas independent contractors rather than employees. This means contracting on a short-term basis for a specific project and paying them per project or hour with a written agreement. Companies often do this when they need specialist roles, such as consultants.

The advantage is that contractors pay their own taxes, contributions, and insurance, and you don’t have to onboard them as you would with a regular employee. It’s simpler and more affordable for the employer, but countries have differing definitions of what constitutes a contractor, which may limit how you use them.

Taxes are one of the biggest headaches of paying wages to overseas employees. Every country has different tax laws, and reporting deadlines vary. Compliance is critical, and it’s best to get help from an expert.

One thorny issue is double taxation. U.S. companies must file taxes with the IRS, but your international employees are likely subject to taxes in their own country. So, you may be making double payments for benefits, social security, and health insurance. However, some U.S. expats can use income exclusions and foreign tax credits to avoid this.

If you employ U.S. citizens (or green card holders) to work abroad, they’ll still be subject to U.S. payroll taxes and Form W-2 income reporting. But pension contributions may change, as pensions such as IRAs and 401(K)s have specific contribution limits and rules when the individual is working overseas.

If hiring overseas contractors, you’ll need to navigate IRS form W-8BEN . Foreign individuals or entities who receive income from a U.S. business need to provide this form to the firm that’s paying them. It certifies that the contractor isn't a U.S. citizen and not subject to U.S. withholding tax.

Whatever your status, you must keep accurate records of your taxes. Tax authorities in the country where you operate may decide to conduct an audit at any time.

Learn More: How to Hire Remote Employees

The more international employees you hire, and the more countries you operate in, the more complex your payroll becomes. Here are a few of the main challenges and risks.

When making payments in different currencies, you’ll need to be aware of fluctuating exchange rates and fees. Rate fluctuations can significantly impact the actual amount employees receive, potentially causing financial instability and dissatisfaction.

Legal requirements in many countries mandate payments in the local currency, and failing to comply can lead to penalties and legal complications. Additionally, paying in a foreign currency might incur higher banking and transaction fees for both the employer and the employee, increasing costs and administrative burdens.

Cultural Differences

Foreign employees may have different expectations about when they’ll be paid, extra bonuses, and benefits offered.

For example, many workers in India may expect to receive a celebratory Diwali bonus during the festival season. And while many U.S. companies pay employees on a bi-weekly schedule, workers in Japan are usually only paid once a month.

Compliance with global regulations is one of the biggest challenges. There are serious penalties for misclassifying employees as contractors, even unintentionally (some countries count people as employees if they’re contracted for a long period of time).

Also, look out for laws on minimum terms of employment, maximum hours, and overtime limits. There’s also international data privacy laws such as GDPR in Europe.

Business Entities

Setting up a business entity in another country is fraught with bureaucratic and financial risks, including being exposed to higher taxes. 

If the local tax authorities classify your business as a permanent establishment (and each country has its own definition of this), new taxes will apply. This may include double taxation on the same income in your own country and the country that hosts your entity.

Paying international employees is complicated, but you don’t have to bear the burden alone. With Paylocity’s global payroll solution through Blue Marble Payroll, it’s easy to manage overseas (and domestic) employees in one place.

The global expansion and consulting services team will help you:

• Launch business entities and set up in-country bank accounts
• Navigate local laws and requirements in 100+ countries
• Create competitive compensation and benefits packages for each market
• Hire and onboard local talent.

Request a demo to learn more about Paylocity’s global solutions.

Save Time with Stress-Free Payroll Solutions

Payroll doesn’t have to be complicated, but it does have to be right. Stay compliant, collect employee data, and streamline tax filing – all while putting time back in your day with our automated payroll software. With the assurance of an error-free workflow, you can get back to what matters most – your people. Learn how our modern solutions get you out of the tactical and back to focusing on the bigger picture.

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The procedure for receiving the work visa for foreign citizens

Obtaining a work visa for the foreign citizen is a multistage and long process. For example, it will take on the average 100 days and 15900 ₽ (only to pay the state fee) for the Company-employer registered in Moscow to hire a foreign worker. Since a work permit is valid maximum for 1 year, it is necessary to start processing a new work visa 6 months after receiving the current work visa.

Citizens of the CIS do not need a visa to enter Russia, and Work permit is issued for them in the simplified order for 10 working days and 4000 ₽ approximately.

Company – member of AmCham can process the documents in Moscow in “one window” mode for its foreign colleagues working not only in Moscow, but also in any other region of Russia.

Steps of the work visa getting procedure:

• Annual electronic application for foreign manpower need submitted to the Migration quotas automated information system.
• Placement of vacancy in the administration of Civil service of the employment of population.
• Permission to involve the foreign labor force in the Migration police.
• Work permit for foreigner (Plastic Card) in the Migration police.
• Accreditation at the local department of the Migration police.
• Work visa Invitation for foreigner.
• Receiving a single-entry work visa for 90 days at the Russian Consulate.
• Visa registration with the local department of the Migration police.
• Notification of the beginning of work of a foreigner submitted to the Migration Police.
• Re-issue of a single-entry work visa into a multiple-entry visa with the extension of its validity period.

Samples of documents

Detailed description of stages for the Company registered in Moscow and hiring foreign citizen to work in Moscow:

• Every year a Company is obliged to submit the application for foreign manpower need for the next year, so that the needs of the concrete company would be taken into account while the formation of quotas for the Russian Federation subjects and of all-Russian quota. Application includes a compulsory registration with the quick information center “Migration quota” at www.migrakvota.gov.ru . This rule does not apply to non-quota positions which list is renewed every year.

Required documents:

• Application form (PDF file, 48 KB) about the assignment to the employer of the state service of assistance in the selection of the required workers (1 copy);
• Information about the need of workers (PDF file, 50 KB), the presence of the unfilled vacancies (2 copies);
• Certificate from the Russian Federal Tax Service of “State registration of legal entities” and the introduction of record into the United state list of legal entities (1 notarized copy);
• Certificate from the Russian Federal Tax Service of “Registration of the legal entity with the Tax Authorities” (1 notarized copy);
• Codes of statistics (1 notarized copy);
• License to carry out activities (if needed) (1 notarized copy);
• Power of attorney (PDF file, 52 KB) to the authorized representative to submit and obtain statements of the Administration of civil service of the employment of population (UGSZN) of Moscow (1 copy).
• Conclusion of the Administration of civil service of the employment of population (UGSZN) of Moscow (copy with the assignment of the original);
• Request to the Administration of civil service of the employment of population (UGSZN) (PDF file, 73 KB) (2 copies);
• Application (PDF file, 44 KB) to the Migration police of Russia (3 copies);
• Application form of the organization (PDF file, 37 KB) (1 copy);
• Application (PDF file, 42 KB) to the Russian Migration police of Moscow (2 copies);
• Project of a labour contract or other documents confirming the preliminary agreement with foreign citizens or foreign partners about intention and conditions of employment of foreign workers (1 copy, signed and stamped by the employer);
• Certificate from the Russian Federal Tax Service of “The introduction of a record into the United state list of legal entities on the state registration of changes into the constitutive documents of a legal entity” (if changes were occurred) (2 notarized copies);
• Certificate from the Russian Federal Tax Service of “The introduction of a record into the United state list of legal entities on the state registration of changes which are not connected with constitutive documents of legal entity” (if changes were occurred) (2 notarized copies);
• Original of a billing document (stamped by bank) proving the payment of the state fee of 10000 ₽ for giving the company a “Permit to involve foreign labour force” for each foreign worker (properties).
• Copy of a “Permit to involve foreign labour force” (with the presentation of the original);
• Application (file PDF, 42 KB) to the Russian Migration police of Moscow (2 copies);
• Warrant to the authorized representative (file PDF, 52 KB) for the right to supply and obtain a work permit (plastic card) (2 copies);
• Application (file PDF, 102 KB) about issuing to foreign citizen or person without citizenship of work permit (1 copy);
• Letter of guarantee (file PDF, 55 KB) for the return of foreign worker (1 copy);
• Examination certificate for knowledge of Russian language;
• Form A30 – about absence of disease of Hansen (leprosy);
• Form A15-A19 – about absence of tuberculosis;
• Form A50-A53.9, A55, A57 – about absence of sexually transmitted infections (syphilis, lymphogranuloma (venereal), chancre);
• Form 086 – for the workers connected with physical labor;
• about absence of addiction;
• Notarized translation of passport of foreign citizen (1 copy);
• Colored photo of foreign citizen on the mat paper – 2 pieces;
• Copy of document with apostille about the vocational education with the translation into Russian (1 notarized copy); or a certificate of equivalency of such document to the Russian school certificate or diploma of professional education;
• Original of billing document (stamped by bank) about the payment of the state duty of 3500 ₽ for obtaining a “work permit for a foreign citizen or a person without citizenship” (properties).
• Application form (PDF file, 75 KB);
• Extract from the “United state list of legal entities” (remoteness of an extract should not exceed one month; 1 notarized copy);
• If the head (Director-General) is not Russian citizen, copies of Permit to involve foreign labour force and Work permit for foreign citizen (both notarized copies) are also required;
• Non-residential Lease Agreement (in case of sublease, copies of sublease agreement and non-residential lease agreement should be presented; 1 notarized copy);
• Certificate of “State registration of the property rights” of the non-residential premises (at owner of premises) occupied by organization (1 notarized copy);
• Letter of guarantee (file PDF, 41 КB).
• Organization Registration card in the Russian Migration police of Moscow;
• Application letter for invitation (file PDF, 116 KB) for Russian visa (1 copy);
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• Copy of “permit to employ foreign workers” (Permission) (1 copy);
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• Copy of the page of passport of foreign citizen, which contains photo and specifications (1 copy);
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• Receipt for state fee payment.
• Application of foreign citizen to the Russian consulate with purpose of obtaining single work visa for 90 days.
• Notification of the beginning of work of the foreign national in the organization. After obtaining a work permit and a work visa, signing a labor contract with a foreign worker (or extending the existing labor contract for the new period), the Company- employer is obligated to send the notification of conclusion of the employment agreement with a foreign worker to the Migration police of Moscow in 3 days. Similar notification should be sent in case of cancellation of an employment agreement with a foreign worker.
• Registration of the work visa with the local department of the Migration police.
• Notification of arrival (Visa registration) (file XLSX, 130 KB) of foreign citizen to the place of stay (1 copy);
• Letter of guarantee (file PDF, 52 KB) from the inviting organization with the request to obtain a multiple entree work visa for foreign citizen (1 copy);
• Application with request to obtain a multiple entree work visa (file PDF, 55 KB) from a foreign citizen (1 copy);
• Passport copies of foreign citizen with the visa and migratory card, with the presentation of originals;
• Two photos (colored, mat paper, size of 3×4);
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• Copy of “work permit of foreign citizen” (Plastic card), with presentation of original.
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Evan Gershkovich Sentenced to 16 Years in Russian Prison on Fabricated Charges

The Wall Street Journal reporter’s trial on espionage charges was widely viewed as a sham outside Russia. But the verdict could set the stage for a prisoner exchange.

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By Ivan Nechepurenko

A court in Russia on Friday sentenced Evan Gershkovich, a reporter for The Wall Street Journal, to 16 years in a high-security penal colony, ending his espionage trial on what were widely viewed outside Russia as fabricated charges. The verdict opens the way for a potential prisoner swap between the United States and Russia.

The harsh sentence represented the first espionage conviction of a Western reporter in modern Russia. But the expedited nature of the case suggested that Moscow might be ready to trade Mr. Gershkovich. The proceedings were recently moved up by more than three weeks, and the court concluded the case, a process that usually takes months, in a matter of weeks, with only three hearings.

The court said in a statement that Mr. Gershkovich did not admit guilt, but said “the totality of the evidence presented to the court was sufficient to render a guilty verdict.” Judge Andrei N. Mineev, who presided over the case, sentenced Mr. Gershkovich to two years less than prosecutors were asking.

At no time during the case, however, did prosecutors publicly provide any evidence to back up the charge, and the trial was held behind closed doors. The Russian judicial system for years has served as a tool of President Vladimir V. Putin’s domestic repression, handing down convictions and long sentences in cases with clear political motivations.

In Russia, once a person is charged with a crime, it is virtually impossible to get an acquittal in court. Only one in about 385 criminal court trials ended with an acquittal in 2023, according to court statistics.

Dow Jones, the parent company of The Journal, called the conviction “disgraceful” and a “sham.” The company added in a statement that, “We will continue to do everything possible to press for Evan’s release and to support his family.”

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