Sending an employee abroad is often a strategic decision aimed at supporting international growth, strengthening local operations, or retaining talent. However, these opportunities come with legal, tax, and social security risks that are still too often underestimated.
In practice, seemingly minor oversights can lead to audits by local authorities, financial penalties, litigation, or even the termination of the assignment or damage to the company’s reputation. Nicolas Stockmans, Partner, and Melissa Claessens, Senior Manager, on BDO’s Global Employer Services team, highlight five common mistakes made by employers and explain how to avoid them through proper preparation.
1. Assuming that the home country’s labor laws always apply
A common mistake is to assume that the labor laws of the home country continue to apply throughout the assignment. However, as Nicolas Stockmans explains, the mandatory provisions of the host country’s law often take precedence over the original contract, rendering certain clauses inapplicable and exposing the employer to penalties or litigation.
Before departure, it is essential to identify the mandatory rules applicable locally and to have key clauses (working hours, termination, minimum benefits) reviewed by local specialists.
2. Neglecting immigration and work permit requirements
Visa and work permit procedures are sometimes viewed as mere administrative formalities. Failure to comply with them, however, can result in deportation or the immediate termination of the assignment.
Planning ahead is essential: procedures must be initiated early enough, with the support of immigration specialists, to secure all necessary authorizations before the assignment begins.
3. Underestimating Social Security and Pension Issues
Social security is often overlooked, despite its direct financial impact. According to Melissa Claessens, misidentifying the applicable system can lead to gaps in coverage or retroactive adjustments for both the employer and the employee.
In particular, it is important to verify whether a coverage certificate (such as Form A1) is required, identify local reporting obligations, and assess the implications for pension rights and group insurance.
4. Limiting tax risks to the 183-day rule
Tax issues cannot be reduced to the 183-day rule alone. As Melissa Claessens points out, tax treaties and local laws are complex and can lead to individual tax residency in the host country, or even the creation of a permanent establishment for the employer.
A clear allocation of costs is therefore essential. Additional tax and social security burdens must be allocated contractually, for example through “tax protection” or “tax equalization” mechanisms.
5. Inadequate payroll management and poorly defined assignment terms
Payroll obligations and assignment documentation are frequently underestimated. Depending on the situation, local payroll processing may be required to withhold taxes or social security contributions, accompanied by specific reporting obligations.
Nicolas Stockmans also emphasizes that these requirements must be identified before departure. Furthermore, a clear and comprehensive assignment letter is essential to define the relationship and avoid uncertainties.
Conclusion
Most of the challenges associated with international mobility can be avoided through proactive and pragmatic preparation. Before any international assignment, employers should ensure that:
• the mandatory provisions of local labor law have been analyzed;
• immigration formalities are in order;
• the applicable social security legislation has been identified;
• tax and permanent establishment risks have been assessed;
• compliant payroll systems are in place;
• clear documentation and a pre-determined cost allocation plan are provided.
As Nicolas Stockmans points out, combining legal and tax compliance with pragmatic, people-centered support ensures that international assignments run smoothly and frees employees from administrative burdens.
Nicolas Stockmans, Partner, Global Mobility Services - BDO
Melissa Claessens, Senior Manager, Global Mobility Services - BDO
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