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What should be included for an expat hired from overseas?

According to the Wall Street Journal “the overseas posting is not the cushy gig it once was.” With the recession and a surplus of skilled workers, expat packages are being scaled down. So while top management often enjoys padded relocation packages, it is becoming increasingly uncommon for lower levels. Perks of expatriation that once guaranteed a luxurious lifestyle have been scrutinised and cut back – some important features that should not be compromised in your expat contract.

So when it’s your turn to negotiate a contract you need to be smart and informed about what to include. The key is to choose which battles to fight, and ensure you win them while conceding those contract features less important to you.

The best time to negotiate is once you have a concrete offer, but before you have signed the contract. Once you put pen to paper you can forget about improving subsequent conditions – and if you get too pushy too early you can jeopardise getting the job offer in the first place.

Salary/base – Foreign Service Premiums

Initially the contract negotiation is always to determine salary. This part is complex enough to warrant a field of specialist advisers. For example, if you’re moving from the US to Beijing, Corporate Resources Group, a subsidiary of William M. Mercer, can advise that your base salary should be increased 17 percent because Beijing lacks parks, freedom of speech and qualified doctors. In reality there is less science and a lot more negotiation. The most important part is to have plenty of information and data so you know what to ask for and can back up the requests. So login to expat chat rooms and bulletin boards, ask around, and get as much concrete information on costs as possible. Then you’ll know what the offered salary is really worth once translated into the living expenses of the new destination.

Courtesy: expatarrivals.com

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Expat contract negotiation

Entering into an expatriate agreement, or secondment contract in legal terminology, is
different from negotiating a normal work contract. There are some points to think about, and
it is suggested to have a proper legal assessment of the contract before signing anything, as
individual situations may be different.

Contract structure
Normally the contract is divided in two, the Base Contract governing general issues such as
pension, social security, contract termination etc., and a Secondment agreement which is
governing the specifics related to each posting abroad.

Which is the company you are signing with?
Is it the sending company in the country of origin, or is it the company in the country in which
you will be working? This, as well as the country in which you will be considered tax resident
(think of clever starting and ending periods of the contract!) may have significant impact on
your overall taxation and other legal implications.

Social Security/Compulsory Pension plans
Make sure that these are made in the country in which they are the most beneficial to you. The
situation between countries is normally governed by bilateral agreements, and hence case
specific. Be aware that it might be that your contribution is considered at hold in your sending
country while you are abroad, and hence you might be at loss in final benefits, as you/your
employer have not been contributing during your stay outside of the country. The place of
actual work and your tax residence may play an important role, why this needs careful analysis.
One has to be VERY careful about the social security cover one has when going abroad..
Often you take it for granted that you will be covered from home, which is absolutely not the
case.

Courtesy: esade.edu