Category: Corporate relocation tips

5 Steps to a Successful Year-End Process

Post author By Tamara Molino | CRP, GMS
Post date November 23, 2016

Business coworkers working together at office

While most people are happily preparing for the holidays, you’re scrambling through the year-end reconciliation of all of your relocation expenses. Well, even though it’s only November, here is a gift that will help you not only navigate this year, but help you to have a successful year-end process for years to come.

Though many relocation managers might prefer battling crazed Black Friday crowds to year-end reporting, the process tends to go more smoothly when run by the relocation department. To maximize efficiency, be sure to utilize these five steps:

Create a year-end checklist. A detailed checklist will help identify all of the information you need to accurately report year-end compensation. Your checklist should include due dates, responsible individuals and departments. Establishing the responsibility for reporting all of the relevant compensation data is an important component, and can include wages, imputed income, benefits, equity, taxes, and more. This year-end checklist will help you identify all the resources you will need to create a complete and accurate report. Your itemized checklist needs to include items such as early cutoff dates and all employees who will receive the tax filing services (employees on the tax eligibility list), as well as provide for the time needed for verification, approval and processing. A well-developed checklist will also set firm deadlines for the reporting and tax filings.

Set up a year-end preparation call. When setting due dates, be cognizant of the vacation times made mandatory by some countries around the end of December. During the call, review your year-end checklist with all involved parties to ensure that they are aware of their role and due dates. Use this call as an opportunity to build understanding and develop relationships that will make year-end reporting easier in the future. If you have not already held a year-end preparation call, schedule one as soon as you finish reading the rest of this article!

Verify all of your data! Accuracy is vital, especially when it comes to compensation reporting. Data such as addresses and tax ID numbers/Social Security numbers should be confirmed, as well as wages, benefits, sick and vacation time. Double-checking data prevents backtracking and costly errors down the line.

Finalize your data. Make sure that the final payroll reports of the year have been included, plus any end-of-the-year benefits. Be sure to back up the program data again and be sure to save it in a secure location should it need to be referenced in the future.

Get ready to submit your report. Double-check the deadlines for all the countries on your list and be prepared to provide specific data for each. Tax providers may ask for data for different assignee/transferee populations. Be sure to adhere to your year-end deadlines and, whenever possible, send the data ahead of time. Some international locations may have very tight turnaround times to make that final tax payment of the year.

As with anything, practice makes perfect. The more you follow these five steps, the easier year-end reporting will become for you and you can be confident of a successful year-end process.

Learn more about how to save time and money while managing your corporate relocations.

Tags Relocation Costs, relocation expenses, Workforce Mobility, workforce mobility management, year-end reporting

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Making Global Tax Less Scary for International Relocation

Post author By Tamara Molino | CRP, GMS
Post date October 31, 2016

Modern Nairobi cityscape - capital city of Kenya, East Africa

Making Global Tax Less Scary for International Relocation: Relocating across international borders can be a little scary. However, the experts at Global Mobility Tax were kind enough to provide these treats to take the trickiness out of workforce mobility.

When sending employees on assignments, careful planning can minimize overall tax cost. Each country has its own set of laws that are subject to change. Employees should seek guidance from their tax advisors, making global tax their specialty.

Social security tax

If there is a totalization agreement in force between the home country and the host (assignment) country, a certificate of coverage should be obtained in order for the assignee to be exempt from social security tax contribution in the host country.

Physical presence

If an employee has regional responsibilities and is required to travel to countries like Singapore (60 days), Taiwan (90 days), Malaysia (60 days), China (90 days) and Hong Kong (60 days), he can arrange his visits in order that the physical presence stays below the de minimis day threshold and be exempt from income tax in these jurisdictions. In addition to physical presence, other requirements, such as no cross charge of costs, will also have to be met in order to be exempt from income tax.

Japan

Preferential tax treatment on employer provided housing can be achieved if the lease is signed by employer, the employer pays the rent to the landlord directly and the employee pays back “legal rent” to the employer with after-tax money. If all the conditions are met, the valuation of the taxable benefit is reduced.

Individuals who are residents in Japan on Jan 1^st are required to pay local inhabitant tax assessed on income paid in the preceding year. If the assignment is expected to end in early January, the employee may consider repatriating before Jan 1^st so that local inhabitant tax does not apply in the final year of assignment.

China

In order for certain non-cash benefits such as housing, relocation, education, home leave, meals and laundry as well as language training to be treated as non-taxable compensation, the amounts have to be reasonable and have be paid by the employer directly or reimbursed by the employer upon presentation of official receipts (fapiao).

Learn more about global relocation programs and services

DISCLAIMER

Although the above information is presented in good faith, it is for general guidance on matters of interest only and is not intended as tax advice. The information presented herein may not be applicable to or suitable for the individuals’ specific facts and circumstances.

The information should not be used as a substitute for consultation before any actual transaction with a professional tax adviser who is familiar with all the relevant facts making global tax their specialty.

Global Mobility Tax, LLP assumes no obligation to inform any person of any changes in tax law or other factors that could affect the information contained above.

About Global Mobility Tax (www.glomotax.com)

Global Mobility Tax, LLC (GMT) is dedicated exclusively to the tax and HR issues impacted by global mobility. Our quality people and high-touch client service approach enable us to offer world-class service to global organizations.

Their core specialty is tax planning for international assignments and relocations. In concert with our global service partners, we can offer your organization global strategy, planning and compliance.

GMT clients include both public and private companies, ranging from Fortune 500 companies to industry start-ups, based in the US and abroad.

Tags corporate relocation, global relocation, Global Relocation Tax, Global Tax, global tax tips, International Tax Laws, Workforce Mobility

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The Price of Noncompliance

Post author By Tamara Molino | CRP, GMS
Post date June 21, 2016

Businessman holding digital tablet at airport using protective mask

The Price of Noncompliance – When it comes to relocating employees across international borders, not having the right paperwork can turn an exciting opportunity into a nightmare for not only the travelling employee, but for the sponsoring company, too. Besides just having transferees stuck in travel limbo, errors in work permits, visas, passports, and other work/travel/residency documents can result in heavy fines and penalties for companies.

Here is a short list of the punishments doled out by various countries when companies are in noncompliance, such as being caught with non-compliant employees.

Company may be refused permission to sponsor future foreign employees; existing 457 status workers and their dependents may have visas removed.

For hiring a foreign worker without authorization, the employer is subject to $50,000 fine and/or two years imprisonment. For misrepresentation or counseling of misrepresentation: $100,000 and/or five years imprisonment. Employee may be deported and/or barred from future entry to Canada.

Fine for company of up to €75,000 per noncompliant employee plus additional penalties including debarment from continuing the business for up to five years.

According to Law §17 “OWIG,” the employee may be fined up to €1000. According to Law §30 “OWIG,” the employer may be fined up to €500,000 for an offense of negligence, or up to €1 million for an offense with intent.

Fines for company of up to 60,000 HKD. The authorities can order the closure of the company for up to five years.

For employer, a fine of up to 3 million yen and/or incarceration for up to three years for illegal entry, overstaying and hiring foreign workers without authorization. For engaging in activities outside those authorized, an employee is subject to a fine of up to 2 million yen and/or incarceration for up to one year, plus barred from future entry to Japan.

Fines for company of up to 20 million won or two-year incarceration.

Fines for company of up to €60,000. The authorities can order the closure of the company for up to five years.

Fines for company of up to £10,000 per noncompliant employee.

The employer is subject to a fine of $110 to $1,100 per employee for technical paperwork violations. The employer may be fined from $375 to $3,200 per employee for an employer’s first intentional violation, and up to $16,000 per employee for repeat offenses, in addition to criminal charges and penalties.

Global Mobility Solutions (GMS) will provide organization and collaboration of client documentation and manage the entire visa and immigration process. Upon request, we can track and obtain visa renewals, extensions, and cancellations, as well as assist the employee and family members in obtaining and/or canceling work permits, residency cards, visas, and registrations at appropriate consulates, to ensure there are no issues with noncompliance.

Learn more about the myriad of GMS programs designed to ensure that your global relocation efforts go smoothly, with as little stress and costs as possible. Talk with a relocation expert at Global Mobility solutions now: 1-800-617-1904.

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5 Reasons to Outsource Global Mobility Management

Post author By Sam Hoey | CRP, GMS
Post date April 30, 2016

Business meeting at table — Group of young modern people in smart casual wear discussing business while working in the creative office

Outsource global mobility management – As companies continue to focus on ways to reduce assignment costs, examining operational effectiveness for improved quality and costs savings has become more relevant, particularly with programs managed in-house and/or partially outsourced.

Cost Management: often times, in house programs do not consider or do not have the processes for tracking and reporting mobility costs, which often results in misrepresentation of mobility costs and government fines.
Cost Savings: Outsourcing mobility will generate cost savings from a variety of sources, including policy recommendations, fees vs. in-house operational costs and direct costs e.g. home sale, shipments, etc.
Courtesy Enhancements: In-house programs typically do not offer “no costs” solutions such as pre-decision, expatriate auto lease programs, expatriate home purchase programs and other value add services companies gain from fully outsourcing.
Core Responsibilities: Outsourcing non-core competencies, allows human resources, compensation and benefits and/or recruiting professionals to focus on their core business duties by eliminating the administrative burden of managing the relocation process.
Compliance: Mobility programs offer significant tax and compliance advantages.

These are the top 5 reasons to outsource global mobility management.

Corporate Relocation Corporate relocation tips Domestic Relocation Relocation Challenges

Family Matters and Career Support for the Trailing Spouse

Post author By Sam Hoey | CRP, GMS
Post date November 19, 2015

family in living room looking at laptop — Three young Indian businesspeople working together and having fun while doing it.

Relocating employees often face serious concerns regarding their children’s education, family healthcare, eldercare, and the job market for their accompanying partner or fiancé. Understanding your employee’s needs and concerns can help them make the right decision with regard to relocating. While some candidates may appear perfect for a job opportunity on paper there may be a plethora of unseen obstacles that could result in a candidate declining an assignment, or worse, failing to relocate midway through their move.

Impact Stats:

In Worldwide ERC’s latest 2015 U.S. Transfer Volume and Cost Survey there are 3 statistics that will likely cause considerable stress to any human resources professional:

The number 1 reason for an employee’s reluctance to relocate is family resistance to the move. (60% of all relocating employees!)
The average cost to relocate a home owning employee comes in at around $72,000.
Career concerns for the trailing spouse is a top 10 issue in addition to family resistance to the move.

That’s a lot of risk, and highlights the absolute necessity for comprehensive pre-decision planning and quality family support solutions. Understanding your employee’s concerns can help them make the right mobility decision. The right decision means better return on investment for your organization’s mobility program and a smoother transition for the employee and their family.[divider line_type=”No Line” custom_height=”20″]

Put a plan into place:

Organizational planning before the move is crucial to your program’s success. If you can’t remember the last time your organization revisited your relocation policy and process, it may be time for a quick dust off. Start with the family support essentials:

Look into your career and family assistance offerings. Every organization and industry has its own idiosyncrasies. How do you determine how much assistance an employee needs? What level of support is too little? How much is too much? There are a lot of moving parts and given the amount of risk involved, reaching out to relocation management experts should be a part of any comprehensive plan.
Provide a single point of contact. According to HRO Today’s 2015 provider report, a single point of contact is a hallmark of quality service at relocation management companies. A relocation manager or “coach” is the employee’s confidant and adviser if concerns arise before or during their relocation. Depending on the organization, policies can be complex and difficult for an employee to navigate. A relocation manager can help explain and coordinate career and family assistance benefits for the employee and their family. Without a single point of contact that understands the big picture some needs may inevitably fall through the cracks.
Ensure your organization offers core services. Every relocation program should include a family pre-decision evaluation, career assistance, lifestyle and family support programs. Do your employees fully understand the impact the move will have on their partner’s career or their family’s lifestyle? Is a suburban family moving to a big city? What does the job market at destination look like for the employee’s spouse? Quality pre-decision screening and family support benefits help uncover underlying issues, and address them before they become problematic.
Pre-decision screening should be proactive. The core elements of any pre-decision program includes: needs assessments to identify top concerns and potential red flags, general overview of the local job market and community, general information about companies that may fit the partner’s career goals, cost of living assessment and general salary information, and an in depth career assessment such as the Hiring Edge DISC.
Be Better Than A Google Search. Some programs have website portals that simply list online resources for job searches. While sending an employee’s spouse to job boards like Career Builder or Jobing is a good start, but such services hardly offer anything more than a simple Google Search would. Comprehensive career assistance should review a candidate’s experience, identify personality type, discuss the importance of corporate culture, develop an application schedule and goals, offer resumé critique, provide networking and interview preparation and assist candidates in navigating the sea of job listings and online resources available today.
Leverage your recruiting network. Possibly one of the best resources a company can offer up is their network of recruiters. Most organizations employ 3rd party recruiting companies to meet the demands of their own staffing needs. Providing a warm hand-off to these networks can make a world of difference. This is where some relocation management companies have an edge over in house relocation programs, as well as a key differentiator when comparing RMC’s.
Support for the entrepreneur. Some spouses may have a small business and will have unique needs and guidance when relocating their business. Guidance and resources for spouses looking to start a new business or relocating an existing business may include market analysis, networking assistance, and introductions to the startup community in the new area.
Understand the stressors of the relocating family. When employees and families relocate they undergo a massive amount of change. The biggest tasks such as finding living accommodations or working with moving companies, require a great deal of attention and leave little time to deal with other needs. This time crunch plus the stress that accompanies relocation can make it difficult for the employee and the family to adjust to the new location, emotionally and physically.
Culture shock can happen anywhere. While traditionally thought of as an issue exclusively impacting employee on global assignment, domestic culture shock is a common occurrence. Any drastic change in lifestyle can have an unnerving effect such as: suburban life vs. inner city bustle, west coast laissez-faire style work environments vs. hard nosed New York hustle, even climate and geography play a significant role in a families ability to settle into a new location. Due to these factors, benefit packages should include services that assist the family after the move is completed. (These are sometimes called settling-in or acclimation services.)
Get connected to the community. Moving to a new location often means employees and families must recreate their lifestyle without the help of the support network they traditionally relied on. An organization’s relocation program should fill in the gaps of a families support network during the transition with services that identify relevant community networks, activities, medical specialists, secondary and higher educational resources as well as licensed preschools and/or day cares.

While there are a lot of moving parts and face value costs to providing a comprehensive family support plan, the benefits pay dividends. With over 60% of employees confirming that family issues presented major challenges to their relocation, family support services deserve healthy attention. Given a price tag of 72,000 per relocation, organizations can’t likely afford policy missteps. While this article provides a quality overview of the topic, organizational needs are unique and may depend on program type, industry, company size, and geographic location. If you have questions on how your program’s family support benefits measure up, reach out to a family support consultant at Global Mobility Solutions today for a free comprehensive program review.

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CFPB rule changes may affect relocating employees

Post author By Global Mobility Solutions
Post date October 15, 2014

Pensive businessman signs a document at the office

CFPB Rule Changes – New regulations set forth by the Consumer Finance Protection Bureau are scheduled to take effect next year, which will likely impact the corporate relocation process going forward. The financial information that relocating employees have to provide to lenders is changing.

Employee relocation is a complex process, which is why an expert relocation management company proves to be beneficial in moving talent. A major aspect of an employee relocation is the sale or purchase of a home, and up until this point, the real estate aspect of a relocation has been relatively static.

The Real Estate Settlement Procedures Act of 1974 and the Truth in Lending Act of 1968 laid the groundwork for buying and selling residential real estate in that both pieces of legislation required substantial financial information from the buyer. This included a detailed advanced disclosure of estimated and actual mortgage lender, title and other settlement costs to borrowers, according to the U.S. Department of Housing and Urban Development’s website. In essence, the legislation made it easier to obtain mortgage financing.

Changes are wide-sweeping

Employee relocation services may be impacted by the new CFPB regulations.

In the past, a number of different parties all worked together to provide a seamless and comfortable moving experience for the moving employee. More specifically, the third-party relocation service, the employee’s company, insurance underwriters, attorneys and real estate agents all pitched in to create a comfortable moving experience for relocating employees. While it may seem unrelated that the CFPB – an agency that was created to help prevent another financial meltdown in 2010 after the economic recession was in full swing – has laid out new regulations set to take place in April 2015, corporate relocation will be impacted nonetheless. Since so many parties are involved in making the employee transition smooth, almost everyone is affected in some way.

In April 2012, the CFB Bulletin 2012-03 established new regulations that placed responsibility on the lender to protect consumers who obtained loans to purchase real estate property. The rules were put in place to protect the consumer. Yet, even though banks and lenders are now responsible for financial oversight and protection, the trickle-down affect corporate relocation efforts as well. Although most relocation companies interact with relocated employees prior to the purchase of a property, transferees may likely use a portion of an allocated allowance to apply for a mortgage, which is where the reach of the CFPB comes into play.

Relocation services impacted
More recently, the CFPB announced a rule that eliminated the good faith estimate, the HUD-1, or the former settlement sheet where all seller and buyer costs and proceeds are calculated and shown. The new closing disclosure form must be provided to the buyer three days before closing, or consummation, as the CFPB now calls it. After this window, only limited items can change, according to relocation services industry trade group Worldwide ERC.

Worldwide ERC pointed out that since most relocation service providers now require a HUD-1 at least two days before closing to obtain client approval, the process may be backed up to five days once the new regulations take effect. These added regulations point to the increased complexities surrounding employee relocation, and highlight the need for partnering with an expert in global talent management.

Brought to you by Global Mobility Solutions, a trusted partner in global talent management.

Tags Real Estate

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Top 5 emerging international markets

Post author By Tamara Molino | CRP, GMS
Post date October 14, 2014

Walking through the beautiful streets of Dublin, Ireland

When it comes to the corporate relocation process, finding the right fit for employee mobility can be difficult. Different areas of the world are better positioned for personal and professional growth depending on the vertical, but developing in an emerging market is much easier said than done. A multilayer economic hotspot may be the ideal location to relocate talent for new or existing business ventures, but it takes time and a depth of knowledge to successfully adapt and find personal success in a new market.

A recent Forbes analysis of international GDPs found 70 percent of world growth in the next several years will come from emerging markets. Although China and India comprise about 40 percent of that maturation, there are still other viable options for businesses aiming to relocate talent. Keeping that in mind, here are five emerging markets to keep tabs on for a potential international relocation and reasons to further invest in talent relocations in these geographical areas:

Emerging markets offer unique opportunities for expatriates.

Central America: Although this encompasses several different countries, the region is small enough where businesses could individually identify local economies and choose which one best aligns with their business needs. CBS News recently came out with a list of the ten best places to invest in real estate, and half of the locations were located in Central America. The low cost of living and typically warm climate make for happy employees, which is a primary objective of global relocation. In terms of real estate investment, finding a return in this region of the world won’t be as difficult, either. CBS specifically cited Mexico, two cities in Belize, Nicaragua and Panama as possible real estate investment gold mines. Businesses and their employees can consult relocation services on the best areas to buy or lease property once a move location is decided.
Colombia: The South American nation isn’t exactly well-known on the international stage as a manufacturing haven, but it’s proximity to the coastline, strong economic growth and cost of doing business make it a viable possibility to relocate talent. Bloomberg predicts GDP growth between 2013 and 2017 will occur at a rate of nearly 22 percent with just a 3 percent inflation rate. A separate Reuters report noted Columbia’s economic growth was as high as 6.5 percent in the first quarter of 2014, although that figure dipped to 4.3 percent in the second quarter. A strong economic backbone and low projected inflation present an opportunity for relocated talent to find personal and professional success.
Indonesia and Malaysia: While China, India and Korea dominate the economic growth talks, smaller nations such as Malaysia and Indonesia are gaining a considerable amount of attention with regard to commercial prosperity. The two nations are separately governed bodies, but the bordering nations’ economies will likely continue to grow in the next few years. Indonesia’s GDP is projected to grow more than 30 percent between 2013 and 2017, while Malaysia is expected to mature 22 percent in the same time period. The latter nation’s inflation rate is as low as 2.5 percent and has a considerably low ease of doing business rank, according to Bloomberg. While vast cultural changes may prove to be a challenge for newly moved employees, global relocation firms can provide talent with services to help the settling-in process, whether it’s through offering van line services, tax preparation or providing ongoing counseling and support after the move.
Turkey: Bloomberg also ranked Turkey in its top-20 emerging markets, calling the nation the seventh-most viable nation for economic growth. Its GDP is forecast to grow more than 21 percent between 2013 and 2017, but its inflation rate is 5.4 percent, which has pundits jumping off the Turkish bandwagon. However, Turkey is a highly opportunistic market not only because of the current local real estate boom, but also because its workforce is packed with young and emerging talent. CBS News reported that half of residents in Istanbul, the nation’s capital and largest economic market, are aged 30 and younger, meaning buying power in Turkey is likely to increase as the rest of the population ages. Young talent may enjoy moving to this Western European and Southeast Asian nation not only because of its projected GDP growth, but also because of the young and emerging talent surrounding them. A youthful workforce in the nation’s capital specifically may help newly moved talent find individuals who have similar interests and desires, thus making the relocation process easier.

Emerging markets provide a strong opportunity to relocate top talent. Businesses can benefit from sending employees to other countries to help further develop company production and create new business resources. Recent Ernst & Young forecasts show investors are already exploring emerging markets as developing countries are attracting half of foreign direct investment. Companies focused on employee mobility are moving toward emerging markets, and a business that relocates its top talent to these locations could directly benefit from regional economic growth.

Brought to you by Global Mobility Solutions, a trusted partner in global talent management.

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