expatriate assignment mean

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What Is an Expatriate?

Understanding expatriates.

• Retiring Abroad

Foreign Earned Income Exclusion

Foreign tax credit, expatriation tax.

• Pros and Cons

The Bottom Line

• Taxpayer Types

Expatriate (Expat): Definition and Pros/Cons of Living Abroad

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

Lea Uradu, J.D. is a Maryland State Registered Tax Preparer, State Certified Notary Public, Certified VITA Tax Preparer, IRS Annual Filing Season Program Participant, and Tax Writer.

Investopedia / Julie Bang

An expatriate or expat is an individual living and/or working in a country other than their country of citizenship. The arrangement is often temporary and for work reasons. An expatriate can also be an individual who has relinquished citizenship in their home country to become a citizen of another.

Key Takeaways

• An expatriate is somebody who has left their country of origin to reside in another country.
• Expats may leave home for work reasons and seek more lucrative employment in other countries.
• Expatriates may live overseas for a while or completely renounce their citizenship in one country in favor of another.
• Retiring abroad has become an increasingly popular option.
• The IRS may impose an expatriation tax on individuals who renounce their citizenship, usually based on the value of a taxpayer's property or income in the United States.

An expatriate is a migrant worker who is a professional or skilled in their profession. The worker takes a position outside their home country, either independently or as a work assignment. The employer assigning the work can be a company, university, government, or non-governmental organization.

You would be considered an expatriate or "expat" after you arrive in Toronto if your employer sends you from your job in its Silicon Valley office to work for an extended period in its Toronto office.

Expats usually earn more than they would at home and more than local employees. Businesses also sometimes give their expatriate employees benefits such as relocation assistance and housing allowances. The expat will have to open a local bank account that will allow them to function in their new home.

Living as an expatriate can be exciting. It can present an excellent opportunity for career advancement and global business exposure but it can also be an emotionally difficult transition. It involves separation from friends and family while adjusting to an unfamiliar culture and work environment. This is typically the reason behind the higher compensation offered to these migrant workers.

Special Considerations: Retiring Abroad

Much expatriation occurs during retirement. Most Americans spend their retirement in the U.S. but a growing number are opting to retire overseas. People are motivated to relocate abroad at an older age for several reasons , including lower cost of living, better climate, access to beaches, or other reasons. But it can be tricky to navigate taxes, long-stay visas, and the language and cultural differences experienced when settling down in other countries.

Popular retirement destinations include countries in Central and South America, the Mediterranean, and parts of Europe.

A common choice a retiree expat must deal with is between permanent residency and dual citizenship. Neither dual citizenship nor residency will get you out of filing a U.S. tax return every year.

It's both surprising and burdensome but Americans still have to pay income taxes wherever they live, and they owe it no matter where their income was earned.

You may also have to file an income tax return in your country of residence although most deduct the amount American residents pay to the U.S. via treaties that minimize double taxation.

You face a tough decision that will require some soul searching and research if you're a retiree or near-retiree who's on the fence. You might consider a trip abroad or maybe several to test the waters before you make a decision. Some Social Security benefits might travel abroad with you but you may have to forego benefits like Supplemental Security Income (SSI).

Complying with United States income tax regulations is an added challenge and financial burden for Americans working abroad as expatriates because the U.S. taxes its citizens on income that's earned abroad. But the U.S. tax code contains provisions that help to reduce tax liability and avoid double taxation . Taxes paid in a foreign country can be used as a tax credit in the U.S. which reduces the expat's tax bill when applied against it.

The Foreign Earned Income Exclusion (FEIE) allows expats to exclude a certain amount of their foreign income from their tax returns. The amount is indexed to inflation. It was $120,000 in 2023 and it increased to $126,500 in 2024. An expat who earns $180,000 in 2024 from their job in a foreign country that's tax-free would only have to pay U.S. federal income tax on $53,500: $180,000 minus $126,500.

The FEIE doesn't apply to rental or investment income. Any income earned from interest or capital gains from investments must be reported to the IRS. The Foreign Tax Credit (FTC) is a provision that ensures that expats aren't double-taxed on their capital gains.

Assume an expat falls in the 35% income tax bracket in the U.S. Their long-term capital gain on any investment is taxed at 15%. The FTC provides a dollar-for-dollar credit against taxes paid to a foreign country so the expat would only have to pay 5% tax to the U.S. if they paid 10% tax to the country where they work. They’d owe the full 15% tax to the U.S. government if they paid no tax to the foreign country.

The expat would forfeit that amount if the income tax paid to a foreign government far exceeds the amount of the credit because the foreign tax rate far exceeded the U.S. rate. The credit can be carried to future years, however.

An individual who has renounced their citizenship in their home country and moved to another is also referred to as an expatriate for tax purposes. They're subject to an exit tax known as an expatriation tax.

The expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and long-term residents who have ended their U.S. residency if one of the principal purposes of the action is the avoidance of U.S. taxes , according to the Internal Revenue Service (IRS).

This emigration tax applies to individuals who:

• Have a net worth of at least $2 million on the date of expatriation or termination of residency
• Have an average annual net income tax liability over the five years ending before the date of expatriation or termination of residency that is more than $190,000 if the expatriation date was in 2023 or $201,000 if the expatriation date is in 2024
• Do not (or cannot) certify five years of U.S. tax compliance for the five years preceding the date of their expatriation or termination of residency

Advantages and Disadvantages of Becoming an Expatriate

Living and working in another country for an extended period can have its benefits. They can range from new experiences and adventure to more practical considerations like a lower cost of living or being closer to extended family abroad. You may also get government perks like free healthcare and education and more favorable taxation depending on where you settle.

There are also some potential drawbacks. You'll still have to file tax returns each year and may have to pay taxes to Uncle Sam even on income earned in your new country unless you fully relinquish your American citizenship.

You might also be a long way from home. This can make seeing friends and family more costly and difficult and time zone differences can also interfere with finding a good time to link up by phone or video chat. Learning a new language and customs can also be difficult for some and certain items or products that you like may not be available in the country to which you move. And not all countries enjoy the same level of political and economic stability that the U.S. does.

New experiences and maybe a better climate

Potentially lower cost of living

Potential access to affordable healthcare

Potential for double taxation

Long way away from friends and family

Language, cultural, political, and economic barriers

Potential challenges in securing the proper visa

What Does It Mean to Become an Expatriate?

An expatriate or "expat" is someone who leaves their country of origin and settles abroad for an extended period, often permanently.

What Is Expat Taxation?

Americans living overseas still have to file U.S. tax returns unless they relinquish their American citizenship. Several international tax treaties exist to help minimize double taxation, however.

What Is an Expat Community?

People often find comfort in seeking out other foreigners when they relocate to a foreign country, especially those from their home country. Expat communities are enclaves of people from a similar national origin, often with their own school and shopping options. English-speaking enclaves are called "Anglo" communities in many countries.

Expats must typically navigate a complex web of tax rules and regulations that can be challenging to understand and comply with. There are retirement considerations to comply with. U.S. Federal taxes are complicated although you can rely on tax credits and income exclusions to receive favorable U.S. tax treatment. Think it all through before you make a decisive move.

The Wall Street Journal. " Americans are Saving Money by Retiring Overseas ." Slide 2.

International Living. " The World’s Best Places to Retire in 2023 ."

World Economic Forum. " The World's Best Retirement Destinations Might Surprise You ."

Internal Revenue Service. " Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad ." Page 3.

Internal Revenue Service. " Tax Treaties ."

Internal Revenue Service. " IRS Provides Tax Inflation Adjustments for Tax Year 2024 ."

Internal Revenue Service. " Foreign Earned Income Exclusion ."

Internal Revenue Service. " Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad ." Page 15-16.

Internal Revenue Service. " Foreign Tax Credit ."

Internal Revenue Service. " Topic No. 409, Capital Gains and Losses ."

Internal Revenue Service. " Foreign Taxes that Qualify for the Foreign Tax Credit ."

Internal Revenue Service. " Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad ." Page 34.

Internal Revenue Service. " Publication 519, U.S. Tax Guide for Aliens ." Pages 23-24.

Internal Revenue Service. " Expatriation Tax ."

Internal Revenue Service. " 26 CFR 601.602: Tax Forms and Instructions; Rev. Proc. 2023-34 ." Page 18.

Internal Revenue Service. " 26 CFR 601.602: Tax Forms and Instructions: Rev. Proc. 2022-38 ." Page 19.

Internal Revenue Service. " Publication 519, U.S. Tax Guide for Aliens ." Page 24.

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Who is an Expatriate Employee?

Who are expatriate employees and are you considered one.

We’ve all been hearing this term expat employee or expatriate worker. Living abroad and working on expat assignments are part of being an expatriate employee. Sometimes, the assignments are short, and sometimes it takes more than a year. Other times, expat employees travel from one country to another to complete their job tasks. So what exactly does it mean? In this article, we will explore the definition and what exactly it is to be an expatriate employee .

Definition of Expatriate Employees

A person living/working in a country other than his or her country of citizenship is considered an expat. Expatriate employees are often working in another country temporarily. Expatriated employees are usually sent abroad by a multinational employer (profit or non-profit) on a long-term job assignment over a year. Often, the organization has to send a senior manager to oversee the operation abroad or set up a new branch office. Often, there will be local nationals in the office – which would be the employees who are citizens of the country or have been domiciled there for a long period of time.

Woman on beach resting in hammock and working on laptop

Understanding Expat Employees

When it comes to expat workers, they earn more than they would at home and more than local employees. Furthermore, if you’ve chosen to become an expat employee, your company will also give your expat employee benefits such as relocation assistance and housing allowance. Becoming an expatriate has a lot of benefits, from getting opportunities for career advancement and global business exposure to living abroad and exploring exotic cities and cultures.

On the other hand, it can also be a difficult transition emotionally for some expats as they will have to leave their friends and family back home and adjust to a new culture and work environment. It is also one of the main reasons companies offer higher compensation and benefits to expat workers.

Expat Employees are “Special”

Generally, expatriate employees expect and deserve higher levels of pay, international health insurance , benefits and more from global employers for a variety of reasons:

• Expats are often in high demand, and their positions are more often than not senior management level
• They fulfil essential positions abroad that are critical for your organization’s financial success
• International experience is considered to require additional income
• Expats are moving abroad by themselves, especially with their families making a big financial and emotional commitment. Picking up stakes and moving your life abroad to a new country is also a big deal.
• Expat assignments are expensive. Not only do they often get paid more, but you have to factor in costs such as housing , schools, insurance, travel and much more. A failed expat assignment can cost hundreds of thousands.
• Finding the right expat employee can be very expensive, especially if a “head hunter” is used as their fees often range between ten and twenty percent of the annual wage.

Who are Expatriate Employees?

Expat employees are professional or skilled workers in his or her profession. The employer can become an expat employee by taking job opportunities outside of their home country , either independently or through his or her employer. The employer can be a company, university, government, or even non-governmental organization. A simple example is if you are working in the Silicon Valley office, and your employer sends you to work for a year in its Hong Kong office. In the Hong Kong office, you’re an expatriate employee.

Who is NOT considered as Expatriate Employee?

Business traveller.

Business travellers are those who are still employed and have a payroll with their employers in the home country. They can be sent on short-term global mobility assignments, and their place of employment is still in their home country. For example, someone can go overseas on a business trip for a few days or longer, yet it’ll still be a short-term assignment. Most business traveling employees are going on trips in under six months. Companies should make sure they secure a robust business travel plan for their entire company if sending employees abroad for short-term trips.

Accidental expat

An accidental expat is when a business traveler stays overseas for too long, and sometimes with the host country’s law, the place of employment may shift to the host country. They may work for a year, coming home only on the weekends. In such a scenario, business travel risks becoming an accidental expatriate. In other cases, even global nomads who move from one country to another without returning home become accidental expat. The COVID-19 pandemic has certainly added a lot of accidental expats as employees traveling are now stranded in overseas locations.

Foreign hires

Other than business travelers, another type of false expatriate employee is foreign hire. Multinational companies occasionally recruit candidates from one country to work in another country. For example, contractors in the Middle East recruit laborers from Indonesia, Phillippines, and other developing Asian countries.

Another example is giant tech companies in the USA recruiting graduates from top universities in India for jobs in California. Foreign hires also include US multinational companies hiring American security guards to work in the Middle East . All these employees are considered foreign hires and not expatriate employees because their employer is in just one country. However, one may certainly disagree with this description – you might just call these valued hires ex-pats.

Expat Contractors

Some global mobility managers will not consider contractor employees if the person is sent or hired abroad for a short or long-term assignment. They are not on the company payroll and are often considered contractors or consulting employees. However, if that “contractor” is only working for your company and indeed if the contract is extended beyond a year, is he or she really a contractor? If something goes wrong or if there is a sickness or injury, that expat contractor might be seen as an employee by the courts – local or back in the home country.

Duty of Care for Expatriate Employees

We have written some articles on the global mobility manager’s duty of care. It is a hot topic in global mobility circles these days. Suffice it to say it is critical for managers to ensure that expat employees, local nationals, contractors, and business travelers are protected and well-insured. All too often, we see people sent abroad for short and long-term assignments with inadequate global healthcare coverage, disability, evacuation, and life insurance coverage on a group or individual basis.

Many expat employers do not place adequate kidnap and ransom coverage for employees in high-risk locations. This puts employees and employers at risk – either because global mobility managers are not being well-advised or the employer wants to save money. Many countries, including the USA and Canada , have issued guidelines for meeting the duty of care for overseas employees. This can extend to adequate insurance but also health and safety as well. International employers need to take a proactive stance to insure, prepare, and protect their employees everywhere.

As part of TFG Global Insurance Solutions Ltd, we can discuss your organization’s duty of care from an expat insurance specialist perspective. If your organization would like to have us examine your global benefits plan , please feel free to reach out to us today. If possible, you can send us the details on your global health insurance plans, expat census, and contracts. We have often been able to find holes in current insurance coverage that were putting employees and the company at risk.

Our firm hase been able to secure thousands in savings for clients when our firm has been appointed as broker of record for their existing insurance policy, often keeping them with the existing insurer after conducting an expat benefit plan RFP. It really makes sense to work with an expat insurance specialist firm .

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HR Glossary

Today when about 80% of large and midsize companies currently send their employees abroad, and 45% plan to increase the number they have on an assignment .

You might have a lot of questions related to expatriates. Like “What are expatriates? Is having them in your company expensive? What are its pros and cons? What are the taxes on ex-pats?”. 

So, let’s get to them.

What is an Expatriate?  

An expatriate (also known as an ex-pat) is an employee who is sent to a foreign country for a long-term work assignment by their employers. The work assignments usually include setting up, managing, or populate a new branch.

These employees usually receive additional benefits such as car and driver allowance, cost of living, relocating allowance, etc.

What are the pros and cons of having an expatriate?  

Some of the allowances given to expatriate

Foreign Service Premiums

Given to the employee so that they can move their family to a new country. It usually lies between 10 to 25% of the base salary.

Hardship Allowance

Hardship allowances are higher when an expatriate is sent to a place with poor living conditions, health care, etc.

Cost of Living Allowances

It gives expatriates access to maintain their standard of living. 

Utility Allowances

It is given to an expatriate to pay their utility bills.

Furnishing Allowances

Some companies give the expatriate’s furnishings by sometimes paying the shipping costs or a fixed amount to buy furnishings.

Education Allowances

Companies usually pay the full cost of tuition, books, and supplies for their expatriate’s kids.

Home Leave Allowances

Companies provide expatriates and their families with the fare for a round-trip cost at least once a year.

Relocation Allowances

It is given to makes up for the mistakes, if any, made in any of the other allowances for unexpected complications.

Medical Allowances

Companies pay for all medical expenses like they do for any other employee.

Car and Driver Allowances

This allows the expatriate to buy or rent a car in the relocated country. 

Taxation of ex-pat

The taxation of ex-pat is quite complex as it is different for different countries and requires you to clearly understand them. You must know about terms like Double Taxation Avoidance Agreement, Certificate of Coverage, etc.

If we take an example of Indian ex-pats, it is quite simple since they don’t need to pay taxes in India for their overseas income. But in the case of a foreign expatriate working in India, they need to pay for the services rendered in India under Section 9(1)(ii) of the Income Tax Act .

We hope this article helped you. For more interesting articles;

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That actually explain what's on your next test, expatriate assignments, from class:, cross-cultural management.

Expatriate assignments refer to the temporary relocation of employees to a foreign country to fulfill a specific role within an organization. These assignments allow companies to leverage global talent and enhance cross-cultural understanding while facilitating knowledge transfer and expanding their operations in international markets. Successful expatriate assignments can lead to increased competitive advantage and growth for businesses.

congrats on reading the definition of Expatriate Assignments . now let's actually learn it.

5 Must Know Facts For Your Next Test

• Expatriate assignments can last from a few months to several years, depending on the needs of the company and the role of the employee.
• Successful expatriate assignments often involve thorough preparation and support for employees, including cultural training and language classes.
• Companies that invest in their expatriates' well-being are more likely to see positive outcomes from their assignments, such as improved employee satisfaction and retention.
• The success of expatriate assignments can significantly impact an organization's ability to navigate foreign markets and implement global strategies.
• Effective repatriation processes are essential for retaining talent after expatriates return home, as many may face challenges reintegrating into their previous roles.

Review Questions

• Key factors that contribute to the success of expatriate assignments include proper preparation through cultural training, support systems for families, and clear communication about expectations. Companies must also consider the career development opportunities available to expatriates during and after their assignments. By addressing these factors, organizations can enhance cross-cultural understanding and ensure smoother transitions for employees adapting to new environments.
• Managing the challenges associated with repatriation requires companies to provide support systems that address potential difficulties returning employees may face. This can include career counseling, mentoring programs, and opportunities for continued engagement with international projects. By facilitating a smooth transition back to the home office and acknowledging the unique experiences gained abroad, organizations can mitigate feelings of isolation and help former expatriates reintegrate effectively into their previous roles.
• Successful expatriate assignments can have a profound long-term impact on a company's global strategy by fostering deeper cultural insights, enhancing local market understanding, and building strong international networks. These experiences allow organizations to navigate complex global landscapes more effectively and adapt their strategies based on firsthand knowledge. Additionally, when expatriates return with new skills and perspectives, they contribute to innovation and improved practices within the organization, ultimately strengthening its market positioning in an increasingly competitive environment.

Related terms

Cultural Adjustment : The process by which expatriates adapt to a new culture, including changes in behavior, communication styles, and social interactions.

Global Mobility : The ability of employees to relocate across borders for work, encompassing expatriate assignments, short-term assignments, and business travel.

Repatriation : The process of returning an expatriate employee back to their home country after completing an overseas assignment.

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Expatriate Management (Best Practice Tips)

Anne morris.

• 11 April 2020

IN THIS SECTION

Managing expatriates is a multi-stage process, where each stage can be crucial to the overall success of an overseas assignment for your business, as well as the individual assignee, on both a personal and professional basis.

The following guide looks at best practice for employers when deploying individuals overseas, including some important practical tips for expatriate management, from preparation through to repatriation.

Preparing expatriates for an overseas assignment

The management of overseas assignments can be a complex process for employers and HR personnel to get right, especially when trying to balance the cost of an assignment within the shifting demands of the global business environment against the individual needs of the expatriate.

By thoroughly preparing in advance of the assignment, and by properly investing in the necessary processes from the outset, you can help to minimise wasted expenditure and unnecessary costs at a later date. This can also help to avoid any loss of revenue, and even the potential loss of top global talent from within your organisation, resulting from a failed assignment.

The level of preparation required in the expatriate management process can vary depending on the nature and length of the overseas assignment, the location of the assignment, the number of assignees involved and the individual personal circumstances of each assignee.

In broad terms, however, your pre-assignment expatriate management process should include the following.

A comprehensive assessment of the nature and length of the overseas assignment needed to meet your business objectives, having regard to the flexibility offered by various different types of assignment, from business trips to permanent relocation. This process should also be carried out in the context of any prospective candidates, their level of experience and their personal circumstances. For the novice expatriate, the option of commuter and short-term assignments may be a sensible starting point.

The provision of an adequate compensation package to adequately incentivise prospective overseas assignees, attracting the best available candidates. This should include a suitable salary that matches or exceeds the typical salary that an employee would get paid in their home country for doing the same job, together with relocation costs and a cost of living allowance to reflect any additional daily expenditure in the host location.

Implement a thorough selection and vetting procedure for prospective assignees, ensuring they are suitably qualified and capable of undertaking the assignment in question. Each assignment will present its own unique challenges and demands, so you will need to match the right person to the job, having regard to the individual needs of the assignee in the context of the specific assignment and host location. This could include formal and informal assessments of their capabilities, career aspirations, physical and mental wellbeing, and whether they are emotionally equipped to withstand any cultural adjustment.

A full assessment of any travel and legal risks prior to deployment tailored to the specific assignment, the host destination and the individual assignee(s), ensuring that you fully research the country and region in which the assignee will be working. You should also keep abreast of any imminent changes that may affect the assignment or assignee prior to their deployment.

A pre-deployment programme of training and education for overseas assignees and their families, where applicable, about the host destination. This could include cross-cultural training and language classes, as well practical information about the region or city in terms of transport, education, recreation, healthcare services, and any safety and security issues. For those travelling to high-risk destinations this should also include security briefings and training on hostile environment awareness.

Supporting expatriates during an overseas assignment

Even with thorough preparation prior to the start of an overseas assignment and through to deployment, the provision of ongoing support for an expatriate during the lifecycle of their assignment can be key to its’ overall success.

A human-centric approach should be taken to expatriate management, where absent the right personal and professional support for your overseas assignees and their families whilst abroad, this could seriously affect the outcome.

The level of support required can again vary depending on the nature and length of the overseas assignment, its’ location t, the number of assignees involved and the personal circumstances of each assignee.

In broad terms, however, your active-assignment expatriate management process should include the following:

The provision of an ongoing benefit and support program to help assignees and their families integrate into their host destination. This could include local support, where you could consider outsourcing this role to a specialist who can help novice expats to settle into their new surroundings and signpost them to different services. You should also provide key HR contacts back home to address any personal or professional problems, or in the event of an emergency.

Ensure a positive employee experience, where psychological wellbeing and happiness while on an overseas assignment is strongly linked to expatriate success. This could include the use of informal introductions, employee-centric activities and social networking events on the assignee’s arrival in the host destination to help them integrate with their new work colleagues and other ex-pat families within your organisation.

Maintaining regular contact with your overseas assignees, ensuring effective coordination between management and HR, as well as any local support team in the host destination. Through clear communication you can help to pre-empt any problems that may lead to job dissatisfaction or difficulties with cultural integration. This can also help assignees to keep abreast of any workplace changes and not feel disconnected or isolated.

The provision of quality healthcare for maintaining the physical and mental health of your employees and their families. You should ensure that you opt for an international health insurance plan that offers the assistance and protection your assignee’s may need, including access to a 24-hour helpline that can be used to answer any medical or security questions, or facilitate the provision of emergency assistance, at a time when an assignee’s usual points of contact would not be available.

Remain fully informed of any risk factors that may impact on the assignment, where even relatively safe destinations can quickly become high-risk regions due to health, safety, security, political or social reasons. You should also be able to effectively communicate any such changes and important information to assignees working remotely, especially in relation to health and safety.

The effective use of technology, including data and analytics tools to make informed management decisions in respect of overseas assignments, from cost control to key performance indicators. Further, by providing overseas assignees with the right equipment and devices to do their job can help to maximise productivity, monitor their progress and even measure the assignee experience. This should include the provision of secure wireless networks, good connectivity and up-to-date software.

Making provision for expatriates following an overseas assignment

Having successfully completed an overseas assignment, this is not the end of the process for either you or the expatriate. The repatriation process, even though this is the last step in the expatriation lifecycle, can be just as challenging as the deployment process. In many cases this will involve a process of practical, mental and emotional readjustment for the assignee, as well as their families.

The level of support required for expatriates following an overseas assignment can vary depending on how long an assignee has spent abroad, the extent of any family ties back home and the nature of any role that they will be returning to.

In broad terms, however, your post-assignment expatriate management process should include the following:

The provision of an adequate repatriation package to adequately incentivise overseas assignees to return home to work for your organisation. This should include the potential for career progression or a suitably senior role to return to home to, ensuring that you retain your top talent and benefit from their overseas experience.

The provision of other initiatives to alleviate the risk of losing key employees, including a suitable relocation package following a long-term overseas assignment to enable an employee to easily move back to the UK. The issue of costs must always be balanced against the need to retain talent to ensure the continuity and success of your business for the future. Given their international experience, expatriates are open to being headhunted by your competitors, so the cost of financial incentives must be weighed against the risk of losing them altogether.

The use of debriefing interviews to capture lessons learned from the overseas assignment, making the most of any invaluable insight and new industry knowledge the assignee has gained from their experience abroad. This will help you to develop your business back in the UK and stay ahead of your competitors. This will also give you the opportunity to explore any career aspirations and potential options available to your assignee, as well as the possibility of any future overseas assignments.

Practical tips for effective expatriate management

Although statistically there can be a high failure rate for overseas assignments, the risk of an unsuccessful assignment can be minimised by applying the following practical tips to the expatriate management process:

• Carefully consider the assignment in the context of your business goals, including the nature of the assignment and number of assignees needed Offer adequate compensation packages to attract the best available candidates, including relocation and costs of living allowances.
• Implement a thorough selection and vetting procedure for prospective assignees, ensuring they are suitably qualified and capable of undertaking the assignment in question in the host destination.
• Thoroughly research the host destination for any travel and security risks, keeping abreast of any imminent changes that may affect the assignment or assignee.
• Thoroughly prepare your assignee for deployment through a programme of pre-deployment training, including their families where applicable Invest in an ongoing benefit and support program to help assignees and their families integrate into their host destination.
• Encourage a positive employee experience through the use of informal introductions with ex-pat families, employee-centric activities and social networking events on the assignee’s arrival in the host destination.
• Maintain regular contact with your overseas assignee to help pre-empt any problems and avoid any feelings of isolation.
• Remain up-to-date with any changes in the host destination that may affect the assignment or assignee.
• Provide adequate healthcare, including access to a 24-hour helpline and the provision of emergency assistance where needed.
• Provide adequate equipment and up-to-date ways of increasing productivity, monitoring performance and staying connected.
• Provide adequate repatriation packages to incentivise assignees to return to work for you, including the potential for career progression or a suitably senior role, as well as any necessary relocation package.
• Utilise debriefing interviews to capture lessons learned from the overseas assignment and explore potential career options available to the expatriate, including the possibility of further overseas assignments.

Need assistance?

Seeking expert advice in expatriate management is often money well spent. The cost of sending employees abroad can already be significant, but the risk of losing that investment through either a failed assignment or loss of the assignee altogether from within your organisation should be weighed in the balance.

Getting it right can result in an increase in revenue, the retention of talent and the ability to repeat the process successfully time and time again.

DavidsonMorris are employer solutions lawyers with specialist experience in global mobility and supporting businesses with their international workforce needs. For advice and help with your expat management, speak to us .

Expatriate  management  FAQs

What is expatriate in hrm.

Expatriate in Human Resource Management (HRM), commonly shortened to expat, is someone living in a country different to their own for the purposes of undertaking a short or long-term overseas work assignment. This can include employees sent to manage a new office or set up a new location.

How do you manage an expatriate employee?

Managing an expatriate employee is a multi-stage process, where each stage can be crucial to the overall success of an overseas assignment for both your business and the individual assignee. Effective expatriate management should run throughout the lifecycle of an assignment, from pre-deployment preparation through to repatriation when the employee returns back home.

How do you manage expatriate failure?

In instances where an expatriate is inadequately prepared for a short or long-term overseas assignment, or where the language and cultural differences cannot be overcome, this can often lead to early repatriation. By providing support on a personal and professional level both prior to, during and after the assignment, the risk of expatriate failure can be minimised.

Last updated: 11 April 2020

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

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Read more about DavidsonMorris here . 

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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What is Expatriate?

Expatriate is a term used to describe an employee who is temporarily or permanently assigned to work in a foreign country. Expatriates may be assigned to work in a foreign country by their company, or they may be sent to work in a foreign country by their government. Expatriates may be assigned to work in a foreign country for a variety of reasons, including to gain experience working in a foreign country, to learn a new language, or to gain knowledge about a foreign culture.

What are the benefits of expatriate assignments?

There are many benefits of expatriate assignments for both the employee and the employer. For the employee, expatriate assignments can offer opportunities for growth and development, as well as new and exciting experiences. They can also provide a chance to learn about a new culture and to improve foreign language skills. Additionally, expatriate assignments can offer a higher salary and a variety of benefits, such as tax breaks and allowances.

For the employer, expatriate assignments offer the chance to send employees to new and challenging assignments, which can help to develop their skills and knowledge. Additionally, expatriate assignments can help to build a global network of contacts, which can be beneficial for the company. Additionally, expatriate assignments can be cost effective, as the employee may be able to claim tax breaks and allowances.

Who uses Expatriate?

Expatriate is used by human resources professionals to describe employees who are temporarily assigned to work in a foreign country. These workers may be sent by their company to work in a new office or to support a project in a foreign country. Expatriates may also be transferred to a new position in a foreign country.

How do you build an expatriate program?

There is no one-size-fits-all answer to this question, as the best way to build an expatriate program will vary depending on the company’s needs and goals. However, some tips on how to build an expatriate program include:

• Establish a clear purpose for the program. Before creating an expatriate program, it is important to establish a clear purpose for it. What are the company’s goals for the program? What do they hope to achieve by sending employees abroad?
• Define the target audience. Who will the program be aimed at? Is it for senior executives only, or will it also include lower-level employees? Defining the target audience will help to determine the specific criteria that employees must meet in order to be eligible for the program.
• Establish eligibility criteria. In order to be eligible for an expatriate program, employees must meet certain criteria. Establishing clear eligibility criteria will help to ensure that only the most qualified employees are chosen for the program.
• Design a comprehensive selection process. The selection process for an expatriate program should be comprehensive and rigorous. It should include a review of the candidates’ skills and experience, as well as their personal and professional goals.
• Create a comprehensive training program. Once employees have been selected for an expatriate program, they need to be properly trained for their new role. The training program should include information on the company’s culture and business practices, as well as on the specific country where the employee will be working.
• Develop a support system. An expatriate program is only successful if there is a strong support system in place. This includes a network of mentors and advisors who can help the employee adjust to their new surroundings.

Why do you need an Expatriate program?

The modern workplace is a global one, and businesses need to be able to operate in multiple countries in order to be successful. In order to do this, they need to have employees who are able to work in different cultures and who have the skills to navigate different business environments. An expatriate program is a way to identify and recruit employees who have the necessary skills and cultural understanding to work in a foreign country. It also provides a way for businesses to support their employees as they move to a new country and help them to adjust to their new surroundings.

Where should you post your expatriate jobs?

There are a few different places to post Expatriate jobs. One popular site is Indeed.com. You can also post directly on company websites or job boards. Another option is to use a staffing agency that specializes in finding candidates for international positions.

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Making Your Expat Assignment Easier on Your Family

by Katia Vlachos

Summary .   

Where do expats go wrong? About 80% move with a partner or family, and it’s often the inability of those people to acclimate to the new environment that causes assignments to fail. Before accepting a temporary reassignment to another country, involve your partner or family in the decision and anticipate the changes it will mean. Prepare for the move well in advance, and discuss the tradeoffs of the choices you’ll need to make. Be particularly sensitive to the possibility that your transition experience may differ from theirs.

As companies expand globally, executives are increasingly being tapped for expatriate assignments. The idea is to spread talent, expertise, and knowledge from headquarters to foreign offices, and vice versa. But these are costly moves — $311,000 per year, according to a  report by PwC and the Cranfield School of Management — and many fail to generate a return on investment. Studies show that an estimated 6%–10% of such assignments are terminated early, while an unknown but sizable percentage involve unnecessary struggle and underperformance.

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Be Careful When Drawing Up Expatriate Agreements

NEW YORK—There are several ways to structure expatriate agreements, and multinational employers should select the one that best meets business needs. But that doesn’t mean organizations can reuse the same forms over and over, said international employment law attorney Donald C. Dowling Jr., a partner at White & Case in New York who works on cross-border HR law issues.

Just as entrepreneurs who want to start a business entity would give thought to what kind of structure they need—a partnership, corporation, LLC or nonprofit—those who are developing expatriate agreements must make sure they understand the nuances of overseas assignments, he said.

“You can’t say, ‘Give me an expat-assignment letter form … we sent Josh to England last year, ‘Where’s his form?’ You need to say, ‘What kind of expat assignment are you talking about?’ ” Dowling told attendees at a March 14, 2013, seminar presented by the New York Chapter of the Worldwide Employee Benefits Network.

Just Who Is an Expatriate?

It’s important to be clear on who is—and isn’t—a business expatriate, since the distinction often leads to confusion, Dowling said. A business expatriate is someone who was originally hired by an employer in one country who later is assigned to work at an overseas location for that same employer or an affiliate.

For example, if Dowling’s law firm recruited an English citizen from a London law firm to be a lawyer in its New York office, that person wouldn’t be a business expatriate but just a foreign hire working in a domestic local position in New York. Likewise, an Indian employee recruited from India for a job with Microsoft in Redmond, Wash., is a foreign hire, not an expatriate, he said.

Four Possible Scenarios

Dowling provided details on at least four ways expatriate assignments can be set up:

Foreign office. The person is employed by, paid by and renders services for the home-country organization or company but works from an office in a foreign host country. Dowling said this is the least common arrangement.

Although there are exceptions, this structure “almost certainly violates host-country payroll law” and may give rise to a “permanent establishment” problem of illicitly doing business abroad, he explained in an e-mail to SHRM Online after the event.

Secondment. A “secondee” is employed by the home-country organization but renders services for the host-country entity. Depending on the structure, the secondee may be paid either by the home- or the host-country entity, perhaps using a so-called “shadow payroll.”

Not all secondees are expatriates. A New York law firm, for example, may second an associate to a client—say, Goldman Sachs—for six months, but that person is not an expatriate, Dowling said.

Expat localization or transfer. The expatriate is temporarily transferred to the host-country affiliate and is now employed by, paid by and performs services for the host-country entity.

For instance, a U.S.-based company may send John to work in Italy for a year. John resigns from the U.S. parent company and simultaneously is hired by the Italian entity for a year. John may or may not get expatriate benefits and may or may not have a formal “side agreement” to get repatriated home after the assignment ends. But the expectation is that John will return to work in the U.S., because if this were not the case, John would be a transferee, not an expatriate, Dowling explained.

Dual, co- or joint employment. The expatriate simultaneously works for both the home- and host-country entities and has two employers. Depending on the structure, the expatriate may be paid by the home- or host-country organization or both, and may render services for the home- or host-country entity or both.

The employment relationship with the home-country company may be active or passive—meaning that the home-country employment relationship may be subordinated and “hibernating.”

“Sometimes the parties believe an expat was localized, but if they failed to terminate a pre-existing home-country employment contract, the expat may be an accidental dual, co- or joint employee,” Dowling explained in an e-mail.

Benefits, Payroll and More

Here are other factors to consider:

Benefits. Not all expatriates get to participate in an expatriate benefits plan, and some who aren’t business expatriates can, Dowling said.

Thus, a foreign hire is not a business expatriate but may enroll in a company’s expatriate benefits program. A telecommuting “trailing spouse” may work abroad for a company as a business expatriate but is usually ineligible to participate in the company expatriate benefits program, he said. And while an employee of a U.S. firm who asks to be transferred to Bangalore to care for a sick mother would meet the definition of a business expatriate, “you’d almost never give an expat package to someone who is going to the other country for their own personal reasons,” Dowling observed.

And “stealth expats” may have shifted their place of employment abroad after extending a long business trip without the employer’s legal, HR and payroll departments acknowledging the move, Dowling said. “They are business expats, but they do not participate in the company expat benefits program.”

Payroll compliance and offshore wage payments. Structure assignments to ensure payroll compliance and to avoid illegal offshore wage payments, Dowling said. As in the U.S., most other countries have payroll laws for staff working locally that cover employer reporting, withholding, and contributions to local tax authorities and social security agencies and funds.

“Often you find out people are not being paid legally, and it’s a big problem,” Dowling said. “You’d be surprised how often even major multinationals, for whatever reason, end up ignoring all that stuff.”

Other Important Considerations

Stephen J. O. Maltby, a partner at Gibney, Anthony & Flaherty in New York who heads Gibney’s immigration practice group, also was featured at the event. Maltby, who oversees client immigration matters for the firm, spoke broadly about how immigration laws around the world “put a lot of bumps in the way of international assignments” but said that organizations should take into account the entire family picture and desires of the accompanying partner or children when considering international assignments.

“One of the most important real benefits that can be conferred is that benefit of certainty that the aspirations and concerns of all members of the family are being considered,” said Maltby, who represents clients in sectors that include financial services, pharmaceutical, Internet, technology, and media and entertainment. As part of any international benefits package, Maltby said that he encourages clients to ensure that all assignees have basic legal protection in case problems arise.

“Things can go wrong for a person in a career wherever they are, but when things go wrong in an international assignment, the challenges are often magnified,” he said.

In 2009, Maltby said he was hired when an assignee and his spouse were killed and there were challenges getting the grandparents of the deceased couple’s children to the country to bring the children back to the U.S. because “legal documentation was not in place in advance.”

“We always encourage our clients in human resources to insist that all people going on assignment take out wills, consider guardianship documentation, travel letters, health care proxies and financial powers of attorney,” he said. “At the end of the day, these items are not only employee benefits that are not expensive, but they can spare the employer a huge headache if something goes wrong in the international assignment.”

Pamela Babcock is a freelance writer based in the New York City area.

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