Companies must include intentions of foreign sponsorship in the due diligence process surrounding acquisitions. Most nations are increasing their scrutiny of who will be working in their country, why, when and for how long. The current economic difficulties have made many countries redouble their efforts to support national economies and to protect employment for their own citizens as much as possible. Not surprisingly, the administrative hurdles related to immigration have grown, and details regarding validity, rate of pay and roles and responsibilities are required. TRC advises clients to plan at least three months in advance for any international assignment.
Immigration laws are being more strictly enforced than in the past, and penalties can be steep. Increased post 9/11 scrutiny of border crossings and the amount of time spent in countries makes it much more likely that those who are not in compliance with local immigration laws will be detected. Some dodgy practices, such as working on tourist visas, have become even riskier than in the past, and can result in immediate deportation and even denial of future entry. All employees working in a foreign country must have the proper documentation and visa to support it. Failure to do so could result in fines or imprisonment for the employee and / or the employer.
Many countries have tax treaties in place with other nations to outline and identify when and under which circumstances taxes are due. Typically, an employee may work in another country for a certain number of days before a tax liability becomes due. It is important to keep careful track of the number of days worked in a foreign country, and to enlist the help of global tax experts to ensure compliance with the myriad requirements. Penalties can be severe.