step by step - impatriation
Sending an employee to France is not only an HR problem. It is handled by the Human resources department but other departments ' help will be needed at some point.
In this section, we would like to bring your attention on a couple issues requesting the assistance from other departments to proceed with an assignment abroad. If these departments do not exist within your firm, it is always possible to ask the help of firms specialized in these matters.
In another section of our site, we have drawn your attention to the fact that it is necessary to clearly understand what will be the relationship between your assignee and the French company. For this reason, it is necessary to understand what kind of entity is going to host your employee. Is it a branch, a permanent establishment, a commercial office? Maybe the company does not yet exist and your legal department is creating it.
These questions need to be asked because they will directly impact the impatriation. It will define what kind of an assignment you can propose to your employee, it will determine the immigration rules, the type of contract the employee needs to have in France, etc.
If you have a branch in the host location, often considered as a permanent establishment, expatriating is often easier because the host firm is clearly defined in the host country from a legal point of view and it has a tax scheme clearly applied to it. It also allows you to easily recruit people, write invitation letters for the expatriate, etc.
If you only have a commercial or representation branch in the host location, expatriating employees to this host location may be more complicated because the host firm may not be recognized legally as an employer and hosting employees from abroad may be difficult.
If you are impatriating an employee to France, the corporate finance department will need to be implicated because you will need to inform the home company of expenses on behalf of the employee . Getting your corporate finance department involved early will help you take into account the impact of deducting expenses from the firm ' s profit, VAT, and any other withholding obligations applicable.
Therefore, when setting up contract to bill expenses tied to an impatriation, involve your corporate tax specialists.
Finally, your corporate finance department will have to be involved if you want payroll to be properly set up for your accounting team to be able to determine what needs to be billed to other branches.
The payroll department is one of the most important departments for the HR. By payroll department, we mean the home and host payroll departments. Why is it so important?
- First, for the expatriate, it would be inconceivable not to be paid exactly what was agreed upon his departure ;
- Secondly, because the payroll department represents directly the employer in the eyes of the expatriate. Errors in the amount paid, the amounts transferred, etc will make the employee believe that his HR department is incompetent. Therefore, even if there is no direct conflict between the employee and the HR, the employee will have the feeling that his expatriation was not properly controlled. This feeling will provide the employee cards when negotiating or discussing other aspects of his assignment ;
- Finally, payroll in the home or the host location must respect a great number of legal rules. Some of the main problems will be that :
The payroll department is not aware of the rules applicable to expatriate's compensation ;
The payroll department may not have the proper tools to handle an expatriate's package with its specific rules.
For these reasons, include your payroll department early in the impatriation ' s process. You must inform him of the rules that will apply so that it can prepare itself. Payroll will need to know or have the following :
- Copy of the annex to the work contract signed ;
- Detailed package of the employee ;
- Date the employee joins the payroll ;
- Social status: voluntary vs mandatory social security contributions ;
- Payment instructions: paid a 100% in France or the host country, split payment, etc ;
- Inform them of the impatriates' rights to employee French profit sharing, vacation entitlements, etc;
- Handling of the termination payments, bonuses, vacations, etc;
- All particular elements negotiated by the employee
- Tax status : is the impat tax resident? Is there a withholding tax obligation ? Is the employee tax equalized ?
All these elements will also have to be provided to the payroll department abroad since this department may have to pay contributions or withhold taxes.
During the employee ' s expatriation, communication with the payroll department is very important. Any specific payment can have an impact on the payroll. Therefore, communicate with your payroll department and maybe inform it of how a special payment needs to be processed.
Finally, upon the departiure of the employee, it will be necessary for the payroll department and the HR to work again hand in hand.
We will not in this section get in the specifics of the expatriate ' s payroll. However, our blog section includes numerous articles on how to run a proper payroll and optimize properly certain elements of compensation.