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Matt Lewis: Doing business overseas? How to manage staff visits and secondments

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Doing business overseas is becoming ever more crucial for growth. But before setting up overseas, consider how to manage staff abroad

Matt Lewis is head of national markets for London at KPMG.

Last fortnight I was talking about the importance of looking to the emerging economies for growth. But how do you actually manage employees when they’re abroad?

As you can imagine, there is a swath of complications you have to deal with as a business when you send staff abroad for long and short visits – and many are all too easy to miss for the uninitiated.

As an example, there are some territories in the world where a visit lasting just a couple of days or weeks makes your business – and the employee visiting –taxable in the country, because you are transacting business there.

And if the business there is not taxable, you might be legally obliged to report the business you’re doing to the authorities anyway. You may even have to register as having a “place of business” in the country. These are the types of little things that can trip businesses up.

When you send a member of staff overseas for an extended secondment, there are practical issues of them dealing with a new culture, schooling for their family, even opening bank accounts.

On top of that, you as an employer need to get to grips with handling visas, tax regulations and social security systems.

Consider, for example, the employee’s pension arrangements in their home country. If your employee is going away for a long stint, do they stay in or out of the pension scheme? Do you still need to pay National Insurance for them in the UK?

And what about expenses? What’s covered, and how do you pay them? -Sometimes other countries’ tax regimes and regulations are less developed, and are not supported by the same rigid legal structure we have in the UK. So how do you deal with that?

In certain territories, it may be customary for officials to ask for bribes when it comes to transacting business. Obviously paying bribes is illegal under UK law. So you need to have proper risk policies in place on what is and is not acceptable.

It’s also worth checking everything out on the employee side before you talk to your staff about sending them out there, because they could get hugely excited and you need to make sure it’s possible.

Expats are generally more expensive in money terms, and in the admin and HR you need to manage them. But with careful planning and advice you can mitigate the risks and the costs.

A lot of people have managed staff overseas successfully. It is possible, and with the evermore global and flexible communications and workforces we have today, it is arguably easier than ever.

Many of the aspects of setting up operations overseas that you might have never thought possible in the past are now eminently doable. And it can be hugely rewarding experience, both for the employees and the employers.

They key is to plan and seek advice from people who have done it and people who know how to handle these complications.

Matt Lewis is head of national markets for London at KPMG.




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