How to successfully manage employee relocations abroad

Remote and hybrid work have made one thing clear: many roles no longer depend on where someone sits. For a growing number of employees, that raises a natural next question: can they do the same job from another country, whether that means moving to a dream location or returning home to be closer to family?

The good news for employers is that you no longer have to choose between keeping a valued employee and letting them make that move. With the right guidance and support, you can facilitate the relocation and keep your best people within the business. 

Here’s how to get started.

The most crucial aspect of international employment is understanding the law in the country where your employee is relocating. Every place has its own unique rules on your contractual obligations, statutory notice periods, taxation and employee protections. In some countries, the rules even differ from state to state. And it’s not always obvious. For example, in Portugal, annual salaries are divided into 14 payments instead of the standard 12. And in Ireland, the new legislation gives employees the right to disconnect from work outside working hours.

Complying with local employment law is fundamental for the running of your business. These laws are in place to protect employees and guarantee their rights, as well as to clearly define your liabilities as an employer. There are hefty fines for getting it wrong, and you’ll risk damaging your reputation in the local market too, making compliance the first priority on your task list when helping an employee move overseas.

Of course, depending on your company’s own resources, it might be impossible to have the exact knowledge needed to support employees appropriately in a transition of this level. So it’s best to make sure they know they should seek tailored tax and immigration advice from a professional in order to avoid potential bad surprises with the local tax office.

One thing you will need to keep in mind on behalf of your employees is the fact that if their payroll is still in the country of residence, they may be denied access to the health care system in their home country. For EU citizens, one solution for this is the European Health Insurance Card (EHIC), which allows them to receive healthcare in another EU or European Economic Area (EEA) country. Since these are only valid for up to three months, it is important to understand their plans and transition them to local employment and payroll if they intend to stay longer.

One of the most common ways to work with people in different jurisdictions is through independent contractor agreements. These arrangements typically involve engaging individuals as freelancers, sole traders, or through their own limited companies, with services billed on a recurring basis.

Contracting offers flexibility and can be effective in many scenarios, but it requires clear structuring and alignment with local regulations. While companies may define a working relationship as an independent contractor arrangement, local tax and employment authorities assess these relationships based on how the work is performed. Where classifications need to be adjusted, companies may be required to update arrangements and align with local requirements.

In some cases, companies use an Agent of Record (AOR) to bring more structure and consistency to contractor engagements. Where a role is intended to function as employment, an Employer of Record (EOR) provides a way to hire employees compliantly in another country without setting up a local entity.

While relocation can deliver significant benefits for both the business and employees alike, it is not without its challenges. Beyond the legal considerations, there are a number of other issues which need to be managed, not least supporting your employee to make a successful and happy transition to their new location.

Top of the list should be ensuring that the employee still feels like a valuable and valued part of the team. You also need to make sure that their ability to connect and collaborate with colleagues is as seamless as possible. Choosing the right technology is important here, as are concrete guidelines and policies on how to best work together.

Trust is crucial, too. It’s easy to trust people when you can see them working at a desk next to you, but remote work requires a leap of faith. As long as your employees are doing the work and meeting deadlines, try not to get caught up in the specifics of when they’re at their desks. You should be looking to create an environment that empowers employees and demonstrates that you trust them to do the job, irrespective of where they are.

So, relocation is not as straightforward as letting your employee hop on a plane and continuing to pay their wages wherever they land. Local employment laws and obligations are complex, and this complexity has led many companies to consider using an Employer of Record (EOR) for their remote staff.

An EOR is a third-party organisation that becomes the legal employer of the individual, as far as the government, tax, and employment authorities are concerned. This is the route to choose to ensure that you can quickly and easily, legally and compliantly employ someone in a different country without headaches or overheads on the side of the company. That is because all the complexity that comes with international employment is taken care of for you.

It’s a quicker, easier way to ensure their employment is compliant with local employment laws, as well as reducing your admin time. EORs can handle everything from processing local payroll, filing employment-related taxes and returns, to issuing payslips, distributing salary payments, and even managing any statutory benefits in the country, for example, pension contributions in the UK.

What’s more, the EOR can provide employment contract templates for companies to fill in specific details around the role. If contracts aren’t accurate, they could be deemed void, meaning that the employee is working illegally, and so outsourcing this complexity to an expert is an attractive proposition.

So, helping an employee relocate while keeping them in the business is not impossible.

Get all of this right, and the possibilities stretch well beyond just supporting one employee’s request. You could be at the start of a journey towards a much wider remote strategy that can support your business and power its international growth.

Once you’re able to successfully support staff away from your home country, you’ll also be in a prime position to start tapping into a global talent pool, finding and hiring the right expertise to help your business grow, wherever they might reside.