by Not all globally mobile employees are business expatriates. Arrangements for international assignees who are not expats are easy to structure, while structuring assignments for bona fide expats can be complex. Before structuring any cross-border work assignment, the first step is to ascertain whether the mobile staffer is, or is not, an actual business expatriate.
Inpatriates and third country nationals. Two common global mobility terms are in effect synonyms for “expatriate” that betray the speaker’s point of view: “inpatriate” and “third country national.” An inpatriate is an expatriate coming into a host country, while a third country national is an expatriate not working at headquarters on either end of the assignment. For example, if the Paris office of a Kansas City-based multinational were to assign an employee to work temporarily at the company’s Tokyo facility, the assignee would be an “expatriate” to her former Paris colleagues, an “inpatriate” to her new Tokyo colleagues, and a “third country national” to human resources back in Kansas City. For our purposes here, she is an expat.
Business Traveler. Some short-term global mobility assignments get staffed by business travelers who are not true expats. A business traveler remains employed and payrolled by the home country employer entity, with a place of employment that remains the home country throughout the overseas assignment. Everyone recognizes that someone working overseas for just a few days or a couple of weeks is simply on an international business trip, but sometimes even a longer (yet still short-term) global assignment might also appropriately get structured as a business trip even where the employer and assignee refer to the trip as an international “Assignment” or foreign “Posting,” even where the employer provides expatriate benefits and even where the host country requires a visa or work permit. Structure a short-term international assignment as a business trip whenever the home country will remain the assignee’s place of employment during the posting.
Stealth/accidental expat. When a business traveler stays abroad too long, as a matter of host country law the place of employment at some point may shift to the host country and the would-be business traveler risks becoming a so-called “Stealth” or “Accidental” expatriate. Another stealth/accidental expatriate scenario is the internationally mobile telecommuter: An employer lets an employee telecommute from home locally, and at some point the telecommuter slips away (moving abroad and continuing to telecommute from a new country).
Place of employment. The concepts of business traveller and stealth or accidental expat turn on “place of employment.” Under the law of most countries, each employee has a single “place of employment” at a time with each employer (“place of employment” is a legal concept or status, analogous to “Residence” and “Domicile”). But ascertaining a given expat’s place of employment can be difficult.
Foreign hire. Business travelers aside, another breed of false expatriate is the foreign hire. Multinationals occasionally recruit candidates in one country to work jobs overseas. As some examples, recruiting on global websites attracts candidates in different countries. Construction contractors in the Middle East constantly recruit laborers and carpenters from Indonesia, the Philippines and other developing Asian countries. Silicon Valley technology companies frequently recruit graduates from top universities in India for jobs in California. American multinationals often recruit American security guards for jobs in the Middle East and recruit American technicians for jobs at oil fields in Africa. All these employees are foreign hires, not business expatriates, because they work for their employer in just one country. They might be emigrants. They might need visas. Some of them might qualify for company expatriate benefit packages (paid housing and drivers, for example). But foreign hires are not business expatriates because they work for their employer in just one country. Their border-crossing status relates to recruitment, not employment.4 Avoid structuring foreign hires as expatriates.
In-house expat benefits program. An expatriate benefits program is an organization’s package of paid global mobility extras like moving expenses, housing allowance, tax equalization, international tax preparation, spousal support, children’s tuition, car and driver, social club membership, hardship pay, flights home, expat medical insurance, repatriation costs, immigration services and the like. Not all business expatriates get to participate in expat benefits programs (think of telecommuters moving abroad for personal reasons). And not everyone who receives expat benefits is a true business expatriate.
Global employment company. Some multinationals employ corps of “Career expats” who migrate from one posting to the next, spending little or no time working in any home country or headquarters place of employment. Sometimes these multinationals incorporate often in a tax-advantageous jurisdiction like Switzerland or the Cayman Islands a so-called “global employment company” (GEC) subsidiary with the raison ďêtre of employing and administering benefits for career business expats. GECs offer logistical advantages, particularly as to pension administration.
