Employee Relocation Services
Read SDC International Moving Company‘s guide to helping you and your employee relocate to another country! Lump sum programs and are a convenient option used for employee relocations.
Employee Relocation Services
Employee relocation is one of the leading reasons for the international relocation of families. Many times companies is the United States send their employees abroad to help establish or bolster international sales offices and teams, lead product development teams in overseas research and development centers, and participate in the necessary legal, marketing and localization efforts associated with doing business overseas. Many large American companies also bring employees to the United States for prolonged periods for training so that they can go back to their native countries to lead efforts there. All of these require that employees move from the United States to a foreign country.
Some companies have established relocation contracts for their employees. If your company relocates many employees each year, please ask your HR contact in charge of employee relocations to contact SDC International Shipping so we can set up a relationship. However, as international relocation is a complicated and intricate process, most companies prefer to let their employees choose their own relocation options, as this allows for a flexibility that lets each person choose their own combination.
Lump Sum Payments
A Lump Sum Program is when a company provides their employees with a fixed amount of money to use for their move. This money is usually offered for them to use at their discretion. Employees can choose whether to sell all of their belongings and buy new things when they arrive at their destination, ship all of their belongings, or any combination of the two.
There are also some companies who use a variant of this scheme, asking their employees to submit quotes or receipts for them to pay directly to the international relocation service, and they give a lesser cash amount. There are also some companies that will offer little cash, but will reimburse expenses on a more generous scale. If you are an employee who has been asked to relocate to a foreign country, please start out by obtaining this information from your company’s HR department. It will help both us and you plan your relocation more efficiently.
Until 2018, moving expenses were tax deductible in the United States. Since 2018, moving expenses are no longer deductible on your personal tax return. However, many of these expenses are still recognized business expenses to your employer. In the past, this meant that it made no difference in the end of the day if your company paid you directly or paid us. Under the current tax regulations, it might make more sense for your company to pay us and only give you a small cash stipend for adjustment costs.
For other tax considerations when living abroad, remember that the United States requires that you will continue to file tax returns for income earned abroad and while you are abroad. Most of our international employment relocation clients move during the summer. For some this means that their income is divided between two countries for the year. The United States uses a January to December tax year, not all countries do. Some start their tax year in June or March. As you receive recognition of taxes paid while you are abroad, this can be quite complicated.
Some of the things you will need to do is learn how to request extensions for filing each year, file an FBAR, We are not tax experts, just relocation experts. It is prudent for you to consult a tax expert both in the United States and in your new country once you move there. Many companies will provide you with such a consultation as a part of their employee relocation services. Make sure to take advantage of this if it is offered to you, if it is not it is worth your while to do this independently.
Also, as you usually cease being an employee of your company technically, as you will be working for a foreign entity shortly, there might be considerations for pensions, saving schemes, etc. that will be impacted, and these need to be discussed with a tax advisor as well.
Moving to another country with an employment visa will have rules that differ from one country to the next. Your employer will probably already be familiar with these rules, but as regulations change all the time, it is always a good idea for you to personally verify the updated rules and regulations of your destination country.
It is likely that your company has a daughter company or other entity registered in your destination country. Typically you will technically cease employment at the American entity and commence working for the foreign entity. It is this foreign entity who will be your sponsor.
In many countries, your employer will have to initiate the process of requesting a visa for you. In many others, you will have to start the process, usually this can be done on line today but visiting the country’s consulate is still required at some stage. A large portion of our employee relocation services are from Silicon Valley, and for them this isn’t usually a problem. Most countries will have a consulate in the San Francisco area that can service this process.
For almost all countries, a work permit includes residency permits for the entire family for the duration of the visa or your employment in the country. However, please keep in mind that just because you received an employment visa does not necessarily mean that your spouse you can work in your destination country. It is a good idea to carefully consider options before your move.
If you are permanently moving abroad or a returning citizen of your destination country, then you should undergo that country’s immigration process rather than applying for a work visa.
Employee Relocation Services – What other costs will you have?
When you relocate to another country, your costs don’t finish with the cost of relocation services. While all of these costs seem negligible, they add up to many thousands.
Costs for adjusting your children to a new country should not be overlooked. Many times you are moving to places with a very different client than you are leaving. We recommend stocking up on appropriate clothing including spares. If you are only moving for a few years, consider also buying sending things for the coming years.
Also, children are often enrolled in International Schools or American Schools that might be quite expensive. You need to check the costs of these.
Some people have children who don’t have passports yet. If you are leaving the United States long term, you should also renew your American passports before leaving the country.
Also consider things like sports and games for your children. It will be hard to find equipment for things like baseball or American football when you are in most countries. In the states, expect every kid to bring his own equipment, but when you are living abroad if your kids want to play baseball, expect to supply the equipment for both teams. The kids should have no problem making friends who will love to play with them, but gloves and bases aren’t available in most countries.
Most countries will require you to obtain some sort of local identification card, driver’s license, register for health services, etc. If you are sending a licensed vehicle, it will be required to undergo localization and registration.
In America, your medical insurance is usually paid by your company as a part of your compensation package. When you move to another country, your health services will be completely different. Try to calculate your costs for medical coverage for your whole family.