Many companies from large multinationals to entrepreneurial businesses are choosing to embark on a process of corporate relocation by relocating part or all of their operations to new regions.
There are significant potential benefits to relocating abroad – access to markets, simplified compliance and cost savings are cited as key advantages.
While there are a number of cost and commercial reasons why an organisation may consider relocating, but it is also important to understand the consequences.
The key to successful business relocation is early planning, clear commercial objectives and careful execution.
We take a look at some of the pragmatic considerations for employers, including outlining the drivers of relocation, the types of activity commonly relocated and the commercial, cost and tax factors of popular relocation destinations.
Types of corporate relocation
A corporate relocation can either involve completely moving an entire workforce overseas, or could refer to a bulk relocation project involving multiple personnel.
It is important to understand the potential impact any relocation has on the operational, legal and tax affairs of the business. These are generally manageable but careful planning is necessary to ensure groups are aware of all the costs of the relocation.
Obstacles can include obtaining work permits in bulk, preparing several different employees with differing needs for cultural integration, providing the necessary support for a variety of different families, and ensuring the local infrastructure is adequate to accommodate the needs of multiple employees and their dependants.
As such, when planning and implementing a corporate move overseas, you will need to factor in all of these matters, and possibly much more. We look at each of these issues in turn below.
Groups must consider how any relocated function will be staffed. This may involve relocating staff or recruiting locally.
When looking to move multiple personnel abroad you will need to identify which employees will need to seek relevant permissions to work in the new jurisdiction.
These means having clarity of the nature of the roles to be undertaken overseas and residency permits that may be required, but also the
Timescales will be a concern, and issues with applications and processing times are to be avoided through effective and efficient application management to avoid delaying the move process.
Further, in the event that you are looking to start up operations as quickly as possible, perhaps where you are already incurring costs for overseas premises and equipment secured in advance, any delays in obtaining the necessary permissions to enter and undertake work in the country in question can create significant and unnecessary expense for your business. Planning in advance, especially correctly timing visa and permit applications will be crucial.
For existing staff, account must be taken of their desire to move, in addition to their ability to move in terms of work permits. Where existing staff do not want to move, there will need to be a suitable workforce available locally. Both options will have associated costs.
Employment laws also differ across the globe. When moving staff to an overseas location, or hiring new staff from the local talent market, employers should take advice specific to the jurisdiction to avoid triggering employment disputes.
Preparing for cultural integration
When moving multiple employees and their families, you will need to have in place sufficient support to help them integrate into the new host country. In this way you can pre-empt any problems and help to make the process as seamless as possible, ensuring that operations run smoothly, as well as ensuring the wellbeing and happiness of your overseas workforce.
As such, at the very least, you should provide any necessary training as to any legal and cultural differences in the host country, as well as the provision of language courses where relevant. You will also need to ensure that any training caters for the needs of all ages involved, including the dependants of any employees.
Providing family support
Following on from redeployment training and preparations, it is also important to have in place a support system following any corporate relocation.
There may be all sorts of questions and issues that can arise either at the outset of the move, or even much later on, whereby the provision of support, for example, healthcare questions or signposting to various services overseas, can make all the difference to the long-term success of the relocation.
You may even want to consider orientation tours shortly after arrival to help an employee and their families become more familiar with their new surroundings and help ease anxiety about adjusting to a new lifestyle.
What is the key to successful corporate relocation?
With so many matters to factor in, it is vital that you take the necessary steps to prepare and execute your corporate relocation project to maximum effect.
The key to a successful move is careful and advance planning, thorough and meticulous preparation, and effective implementation. While you may never be able to remove all obstacles to relocation, with the right planning you can make the process less stressful and more seamless for both your employees and for your business.
Undertaking a feasibility and cost-benefit analysis, factoring in both costs and potential reputational issues,
First and foremost, you will need to identify the right personnel to create a viable plan and make the necessary preparations. Ideally, this should involve a dedicated corporate relocation team or, at the very least, effective coordination between management and HR. Here everyone will need to be clear on their role and able to communicate effectively with others as to the progress made and where any problems arise.
In a corporate relocation, even the smallest procedural problem can impact other matters, for example, any delay in obtaining work permits can delay the start date.
As such, you should have in place a clear and detailed plan, detailing the timeline for completion, any budgetary restrictions and even individual needs of different employees.
In particular, each individual will have their own subset of requirements for relocation, making a one size fits all approach generally problematic. For example, a worker with a spouse, dependant children and home ownership will have different needs to a single individual renting an apartment.
It is therefore crucial that you understand the unique requirements of successful relocation for every member of the team you are moving, working to achieve a personal and tailored experience.
You should also be absolutely clear on what the end goal is for the business and what the organisation is trying to achieve through relocating its personnel, whether the strategic drivers are, cost containment, expansion into new markets or creating a skilled workforce overseas.
In this way, you can align decision-making in the planning and implementation stages to meet these end goals.
Corporate relocation advice
In today’s economy the demand for global mobility is increasing, not least because businesses are finding it more and more difficult to fill skilled positions and are looking to international relocation as a possible solution.
Needless to say, the threat of Brexit, with potential changes in immigration rules and the types of permissions, more complex hiring processes and a possible reduced pool of employees, has also contributed to the appeal of deploying bulk personnel, or even an entire workforce, overseas.
DavidsonMorris has significant experience in advising clients on successful relocation strategies. We support with all aspects of the process, from planning and compliance through to cost control, employee engagement and the physical and logistical demands of relocating.