Lectures > Managing immigration challenges in cross-border employment

Understanding the landscape

When planning to move employees between countries, companies must first understand the immigration landscape of the destination country. This includes visa requirements, local labour laws, taxation issues, and compliance with regulations that may differ significantly from those in the company/employee’s home country. Each country has its own set of rules governing work permits and visas, which can vary depending on the employee’s role, industry, and the length of their stay.

For example, in the United States, obtaining an H-1B visa for a highly skilled worker involves a lottery system and requires detailed documentation of the employee’s qualifications and the nature of the job. In contrast, the European Union has the blue card, designed to attract highly skilled workers from outside the EU; however each member state has its own specific requirements and processes.

Similarly, in Mexico, companies must navigate the requirements of the temporary resident visa for work purposes, which involves securing a job offer from a Mexican employer and ensuring compliance with local labour regulations, including social security and tax contributions.

Key Challenges

• Visa availability and processing times: The availability of work visas and the time it takes to process them can vary widely between countries. Companies need to plan well in advance to ensure their employees can obtain the necessary visas without disrupting business operations.
• Compliance with local laws: Ensuring compliance with local labour laws is critical. This includes understanding work hour restrictions, minimum wage laws, and employment contracts. Non-compliance can lead to penalties, legal actions, and the revocation of work permits.
• Taxation issues: Cross-border employment often involves complex tax considerations. Employees may be subject to double taxation, where they are taxed in both their home country and the host country. Companies must navigate tax treaties and ensure proper reporting to avoid penalties.

Practical steps for compliance

• Early preparation: Start the visa application process as early as possible. This includes gathering all necessary documentation and understanding the specific requirements of the destination country.
• Develop a compliance checklist: Create a comprehensive checklist that covers all aspects of the immigration process. This should include detailed information on visa requirements, local labour laws, tax obligations, and any other relevant regulations. Regularly update this checklist to reflect any changes in the law.
• Continuous monitoring: Immigration laws are subject to change, and what is compliant today may not be tomorrow. Companies should establish a system for continuous monitoring of immigration policies in the countries where they operate.
• Employee support: Moving to a new country can be challenging for employees. Companies should provide resources and support to help employees navigate the local culture, understand their rights and obligations, and settle into their new environment.
• Engage with local experts: Given the complexity of immigration laws and potential risks, together with the changing environment, it’s always a good idea to partner with local immigration experts who will minimise risks, cost and time.

Conclusion

Managing immigration challenges in cross-border employment is a complex but manageable task. By understanding the legal landscape, planning ahead, and maintaining compliance with local regulations, companies can minimise risks and ensure that their global talent mobility strategies are successful. In a world where the best talent knows no borders, effective immigration management is not just a necessity, it’s a strategic advantage. Finally, by outsourcing this function, companies can mitigate risks and focus on their core business activities while ensuring their employees are legally and smoothly transitioned across borders.

Prof Sergio Guerrero Rosas, Managing Director at Guerrero y Santana, has over 25 years’ experience advising companies from SMEs to multinationals, as well as individuals, on tax and estate planning. He is also Global Vice Chairperson of the Trust and Estate Planning Practice Group and Latin American Chairperson of the GGI International Taxation Practice Group (ITPG).