Transitioning key talent from one country to another presents complex issues for the multinational corporation. Global mobility requires coordination of services between in-house legal, human resources, and other divisions in multiple countries. The typical approach is to hire one of the large immigration firms and the big accounting firms to handle the immigration and tax work, believing this is the best way forward. We have seen too often under this model that the services are not customized and collaborative to the multinational corporation or the employee transitioning to work in a new country.
Our approach is to provide a collaborative concierge service to the multinational corporation and the employee. We have one person coordinating the immigration and tax work and the employee will always have the ability to communicate with the responsible immigration and tax professional so they are confident their matter is handled appropriately.
Too often, the immigration work is not customized and treated as an exercise of filling in forms by the larger immigration firms. When the employee attempts to speak with the immigration firm they can only speak with a law clerk or junior associate, and only in rare occasions a partner at that the firm.
For example, an employee of a global corporation was here on a visa. When it came time to renew his visa, one of the large immigration firms handled the work for the global corporation. This employee could never speak with someone high up enough at the large law firm to get sufficient responses, his visa expired prior to being renewed because of the lack of communication, and he had to spend weeks outside of the U.S. and away from his family on multiple occasions in order to continue to work. No global corporation wants their employees to have this terrible experience that impacts not only the employees work, but their family as well.
Another important part of global mobility are the tax implications to the employee becoming a tax resident of a new country. The U.S. has the most complex tax laws for its U.S. tax residents who own non-U.S. assets including punitive tax regimes and draconian penalties for noncompliance. These tax rules are applicable to employees coming to the U.S. to work. To make this tax reporting fit their budget, the large accounting firms have increasingly been outsourcing this work to countries with significantly lower labor costs. While the personnel where the tax work is outsourced are highly trained in their country’s tax system, it goes without saying that the large accounting firms do not have their top U.S. tax talent located in the countries where the work is outsourced leading to mistakes in the tax preparation.
Over the years, we have had to amend numerous tax returns for global employees to fix mistakes made by the large accounting firms that could have resulted in significant penalties. These large accounting firms require the employees to complete long confusing questionnaires to cover themselves from liability and provide the employees entering a new tax system limited to no guidance. Often the complaint we hear is if the employee asks the large accounting firm a question or to correct a mistake, the response is: Do you want to pay my hourly rate? This is simply no way to work with people.
Our approach is to coordinate the immigration and tax work so that the multinational corporation and employee are comfortable their matter is being appropriately handled by the appropriate professional. For immigration, the employee has direct contact with a service coordinator and the professional handling the immigration work to answer any questions they may have. We also track and organize the compliance and renewal dates for the multinational corporation to reduce the chance a visa accidentally expires.
For the tax work, we have the required professionals to handle the complex tax reporting faced by these new U.S tax residents. Also, as part of the package, we have a preimmigration tax meeting to see if there are any actions or planning that should occur pre-U.S. tax residency for the benefit of the employee. Again, this work is being coordinated through a service coordinator with the employee having direct communication with the professional completing the work. This streamlined coordination between immigration and tax has been a significant benefit for the multinational corporation and their key employees.
Praestans Global Advisors is neither a law firm nor a CPA firm.
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