Ready to Go Global? Get Insight from Aprio’s Global Mobility Team
February 2, 2023
Now more than ever, companies need a global workforce. The marketplace is transforming at a rapid pace, and leaders are looking for new ways to improve customer sales and fuel growth. What’s more, opportunities abound for global production and research, development and innovation.
To broaden their presence and global footprint to pursue their growth goals, companies are sending employees abroad — but the benefits do come with risks.
So, how can leaders overcome challenges and make the most of their global mobility initiatives? We sat down with two leaders of Aprio’s Global Mobility Practice to answer this question and more. Read on to see how Cheryl Leydon, Tax Director of Global Mobility Services, and Jungsub Lee, Senior Manager of Global Mobility Services, help clients minimize tax risks and realize the appropriate ROI for their global mobility investments.
1. Thanks for sitting down with us, Cheryl and Jungsub. Can you explain why it is so important for companies to have global mobility support, especially if they have international ambitions?
Cheryl Leydon (CL): Tax compliance on the international level is complex. Tax laws vary across the world, and the United States also has several tax treaties with different countries so no situation is one-size-fits-all. Individual international assignments have a wide-ranging impact and touch so many business units, including HR, legal and payroll. In many cases, when a company is either going into a new jurisdiction or starting a global mobility program from scratch, all of the individuals who work in these units are faced with handling compliance tasks when they’re already stretched thin by their day-to-day jobs.
At Aprio, we do everything in our power to take the tax and compliance burden off of HR, payroll, legal and other departments involved in global mobility assignments. Some companies come to us and don’t even know where to start. We provide essential peace of mind because we have been there before and have helped so many clients across industries navigate the complexities of various countries. We also work with many different foreign affiliates who can provide boots-on-the-ground support. Our clients know the stakes are high. If they fail to meet compliance requirements, they will suffer from a business reputation standpoint. Our top priority is to minimize risks on behalf of our clients and help them reap the highest reward possible.
Jungsub Lee (JL): The other point I would like to add is that rapid globalization has given way to more restrictions. Countries are tightening their borders, so compliance covers more than just taxes; immigration is also a factor companies and employees on international assignments need to consider. For instance, if a company has not squared away an important tax matter, they may be restricted from sending an employee to that specific country. Canada is just one example of a country that closely monitors individuals’ business activities when they are entering and departing. Companies need to make sure that the immigration and tax pieces of the equation are well-integrated, and that is where Aprio can help.
2. Why are more companies sending their employees abroad? What trends are you seeing?
CL: Many of our clients have several objectives for international assignments. From a business perspective, some companies are intent on growing internationally and want to place employees in key areas to develop a product, conduct research and pursue other initiatives the business needs to achieve its goals. Sometimes clients want to expand into a new market or explore a new customer demographic and want employees on-site. These assignments often involve helping employees find a residence through relocation and moving services. There are many “hidden” or unexpected expenses that come with these assignments, and it’s important for companies to plan for those accordingly.
In terms of trends, we have actually seen more people seeking to work in certain jurisdictions because they have family located there or they simply want to have a new cultural experience. With the advent of remote-work arrangements due to the pandemic, these types of situations are becoming more prevalent.
JL: I agree with Cheryl here. Historically, companies would primarily send their executive employees to other jurisdictions for one, two or three years to lead special projects. As time goes by, we’ve noticed that permanent transfers are becoming more popular among employees, usually for personal reasons versus specific assignments created by their employer. In fact, last year Airbnb publicly announced that they were going to allow their employees to work anywhere in the world. Remote work has enabled employees across industries to pursue their dreams of living in a different country.
Many companies come to us and say, “We want to give our employees flexibility and accommodate them when they move abroad, but how will this affect our business?” Many companies don’t understand the tax exposure and consequences that may come with those decisions. At Aprio, we’re able to give our clients a full spectrum of advice that covers both global mobility-specific concerns and corporate tax concerns, so they can ensure compliance and can confidently support employees in their plans to live abroad.
3. What are some of the other risks companies need to consider when engaging in global mobility?
CL: Another important consideration and potential risk is payroll reporting. Companies may or may not be exposed to corporate income tax due to employees living and working abroad, depending on the jurisdiction they’re in. Potential exposure is also tied to the functions the employee is performing abroad. We conduct global mobility risk analyses and spend a lot of time evaluating our clients’ situations, exploring potential issues and explaining strategies for managing them. Our team comes up with practical solutions to help companies overcome the wide universe of potential obstacles — providing everything from international tax law compliance and support to international transfer assistance and talent management.
4. What are some of the most significant strengths of Aprio’s Global Mobility Practice?
JL: As I mentioned briefly earlier in our conversation, we have a coordinated approach to global mobility that extends far beyond tax return preparation. For instance, when we start with a global mobility risk analysis, we ask clients questions that encompass their holistic financial picture and business situation. Once we start the conversation, our clients will often ask us about corporate taxes, which then leads to conversations around audits and transfer pricing. When we conduct these analyses, a new world of opportunities arises for Aprio to help. We can easily identify other financial areas where a client may be struggling.
CL: The Global Mobility team also has deep expertise and experience managing these issues in jurisdictions all over the world. We understand the challenges associated with running a globally mobile business. Our managers have more than 50 years of combined experience, and we serve over 300 multinational clients in more than 50 countries.
5. Why should companies choose Aprio to fulfill their global mobility needs?
JL: Aside from providing a holistic client experience, our Global Mobility team speaks many different languages. For instance, I often work with Korean clients, and we have Korean-speaking professionals in each of our specialty groups and service segments. That means our clients don’t have to go to five other firms to find people to help. When clients have the added benefit of an advisor who speaks their language and understands their cultural background, they experience more confidence and peace of mind.
Is your business ready to go global?
Schedule a consultation with our team and find out how you can create a better global mobility experience for you and your employees.