Along with salary and taxation considerations, immigration is a highly complex matter for both employer and employee. Even in user-friendly jurisdictions, there remain poorly understood immigration pitfalls that should be noted by HR.
China and India: immigration issues
It is an interesting irony that some nations that depend on the importation of expatriate talent to help sustain rampant economic growth do little to assist a slick expatriate immigration and taxation experience. China is one such example. The red-tape is pretty major in the bureaucratic leviathan that is the PRC. For instance, when an expatriate moves to China, they need to go to a police station to register their presence. And that is only if the expat can secure a visa in the first place. Then to register oneself, that person needs a rental agreement, and in order to do that the individual needs a work permit. This vicious circle is not a great opening experience to continuing one's career in China.
Strict adherence to recording presence also applies to India, where expatriates and their entire family members including newborn babies must appear in person at an immigration office every time that expatriate's work permit registration needs to be renewed. HR is often unaware of this fact. "With exceptions for ethnic (overseas) Indians, all Indian visas require a corporate sponsor; there's no provision to obtain a visa for personal use depending upon what one wishes to do in the country," says Saju James, MD of Fragomen Immigration Services, India.
"Working expatriates entering India must ensure that they register with the Foreigner's Registration office within 14 days of arrival and that extension must be applied for well in advance owing to the long lead times." A further annoying catch to this is that all work permits in India are renewable yearly. Although immigration offices are present in every major Indian city with a significant expatriate population, the yearly physical appearance requirement for all family members may be an issue to be considered.
As with most things in India, the authorities liberally apply 'discretion' in the words of James. "The entire process in India (unlike most other countries) is consular focused - application must be made only to a consulate abroad, and the system is heavily dependent upon a framework of rules and regulations that are fairly non-specific, thereby usually leading to a situation in which the 'discretion' of the adjudicating officers is called upon to decide the outcome."
The Indian system is mired in bureaucracy, including long lead times for processing of in-country applications. "The employer-specific and location-specific work authorisations present a huge deterrent for those that fall under the 'consulting' profile description, as these individuals usually travel between client locations," says James. "Added to this, an expatriate wishing to take up employment with a different employer to the original, cannot do so while in the country. They must exit first." To top it all off, expatriates must obtain exit permits in certain circumstances, including nationals of certain countries considered as 'restricted' and also in situations where the expatriate needs to leave in a hurry and does not have in their possession a valid visa/residence permit. These cumulated hassles certainly have a negative effect on foreign talent numbers to India, but are all details which HR must be acutely aware of.
Similar red-tape applies to China, explains Edward Ma, manager, Corporate Accounting Service, with Dezan Shira & Associates, and the working visa system can be extremely complicated and fraught with complexities. "The working visa is the most important matter to consider (Z Visas are a separate system which applies to foreign investors as well as a representative company)." If the organisation importing the expatriate does not have established offices in China, there can be chronic difficulties in obtaining working visas. There are, therefore, two structures for office set-up in China, often driven by the need to support work visas. Registered offices can only conduct passive or operational activities such as marketing and research, whereas joint ventures have full legal presence.
With the passing of the Beijing Olympics, Chinese authorities continue to tighten their visa framework. Although this applies mainly to avoid overstayers, the rigidity of the entire system should be noted by HR, as it does have a flow-down effect to all foreigners. It is vital to ensure that the company and individual have conducted their homework and due diligence in both a professional sense and a personal sense. Experts agree that the regulatory standards and compliance issues are different to anywhere else in the world, as the nation is developing rapidly, and it is HR's responsibility to communicate these challenges at the beginning and during the assignment.
The benchmarks
Singapore and Hong Kong offer far more streamlined and uncomplicated foreign talent immigration systems. Described as 'a role model' Singapore's expatriate immigration system is straight-forward, and by all accounts Hong Kong matches Singapore. "The two most significant characteristics of the Singapore immigration system are that it's quick and user-friendly. Singapore's 'Employment Pass online' (EP online) is a world-class online application tool that sets it apart from other countries. The company is provided with secure access to their own account and the new enhanced system, which was rolled out on 1 March, 2008, provides a speedy approval process which now typically takes less than seven working days. Many other countries, particularly in Asia, can take several weeks to approve applications," says James Clemence, a partner with PwC International Assignment Services in Singapore.
"Likewise, Hong Kong wants to rise to the challenge of continuing to attract talent," says Lee Quane, the general manager of ECA for Asia. Officially, expatriates to Hong Kong must apply in advance, but foreigners (other than Chinese) often stay on a tourist visa for up to six months, so many find work only once they are resident in the Territory. Quane adds that, "mainlanders have far stringent restrictions once they enter Hong Kong unless they're subject to the 'Quality Migrant Attraction Scheme,' which is officially open to all foreigners but is really designed to allow Chinese migrants with certain skills to reside in Hong Kong and legally search for work. "Nonetheless, Hong Kong's expat visa requirements are quite flexible. Spouses of work permit holders automatically receive the right to work, which is a benefit missing in other locations in Asia," he adds.
However, the flexible and easy jurisdictions of Hong Kong and Singapore are not without their complications, of which HR must be aware. In Hong Kong, expatriates should generally apply for an employment visa outside of Hong Kong, which can sometimes be impractical. "However, there are clear reasons why the immigration department exercises this policy, so it's simply an inconvenient side effect of an otherwise flexible system for expatriates," says Quane. Particular to Hong Kong is the tax and visa implications of constant travelling between Hong Kong, Mainland China and Macau. It is common for people to travel frequently between these: Macau places restrictions on the number of entries a non-Hong Kong or Macau resident can make. Likewise, frequent visits to Mainland China will have tax implications.
Also, in both Hong Kong and Singapore, HR should note that it is virtually impossible to achieve any 'set-up' matters without an employment permit (in Hong Kong parlance) or an employment pass (in Singapore speak), or more specifically, a foreign identification number. This is a defence mechanism combating fly-by-night expatriates. But it can cause a major inconvenience to arrive in Singapore or Hong Kong while perhaps the work permit is still being processed and not be able to open a bank account, buy a mobile phone plan, sign a lease or take medical insurance. Once those work permits are issued, turnaround time for all these matters is rapid, but in the meantime an expatriate and his or her family must wait for those first few days or weeks.
All about the planning
No different to any other jurisdiction, in Japan it really helps all concerned in an expatriation for local HR to expedite the paperwork before the expatriate lands. Requisite work visas should be obtained prior to their assignment. There is also a peculiarly heavy focus on the new assignee's job title and responsibilities, according to Nasir Majid a partner with PwC, Japan. "Depending on this information, appropriate working status will be determined. For example, 'investor/business manager' for the senior executives of the Japanese organisation with business management experience, 'intra-company transferee' for the international assignees from home to host offices with more than one-year employment period with the home office, 'specialist in humanities/international services' for local hires or international assignees with less than one-year employment period with the home office."
Majid adds that it is important to note that it can be particularly complex to obtain a nanny visa in Japan, and that the authorities ration the migration of such domestic help. "The nanny visa is granted to the top one or two individuals in the organisation only and it's very important to use this limited privilege judiciously and for the most appropriate and deserving executive (meaning both spouses with minor children are working or one spouse is physically not capable of raising the children due to physical impairment or illness)."
Majid warns that the Japanese authorities are currently tightening the rules on temporary visitors who travel in and out every 90 days. After the second or third consecutive trips into Japan, immigration authorities may question the reasons for entry to Japan. So for those that think that a 'visa run' (the act of crossing a border for a few hours with the sole purpose of being re-stamped upon re-entry) is the answer, many jurisdictions, including Japan are clamping down on this for dependants of expatriates. These watchful eyes deterring visa runs are particularly present where there is little cost or hassle in crossing a border, ie, jurisdictions with a near land border, such as Hong Kong and Singapore.
Expatriation can be daunting for any individual and a 'shrinking' business world means that many 'global businesspeople' may take on numerous assignments throughout their working lives. Whilst it certainly does not help that jurisdictions differ from one another and, in many cases have complicated frameworks peppered with strange quirks, both local and home office HR's knowledge of these systems, the official rules and the 'unofficial' customs makes the assignment experience for the expatriate infinitely more pleasant.