international compliance regulations

With more companies sending employees overseas it is more important than ever to make sure you are up to date with compliance rules.

A recent study has shown the number of people moving abroad for work continues to increase. While this is benefiting the recruitment and relocation industries, it brings risks in terms of international compliance. The biggest risk for recruiters or companies is found when moving talent across borders.

The “2011 Global Talent Mobility Survey” of more than 160,000 job seekers in 66 countries, by online recruitment firm The Network and Intelligence Group, concluded that, “Workers were keener than ever before to move internationally for a new job.

“On a global scale, more than two-thirds of the people surveyed wanted to work abroad. Overall, people are more eager to move abroad for a short period of time, looking to return home if a better career opportunity arises”.

So with all these eager employees looking for chances to relocate, it is more important than ever to be on top of compliance and best international practice. If a company fails to comply with local laws and regulations the consequences can often be severe. In France you can be prohibited from carrying out a recruitment business for five years. There is also the possibility of backdated liabilities on the client from the tax or social security authorities, where contractors’ tax and social security remains unpaid.

Changing local rules make international compliance difficult

Staying well-informed on local rules can be harder if you have workers in an underdeveloped country. James Allen, managing director EMEA at oil & gas recruiter Swift Worldwide Resources, told that keeping on top of compliance is a major issue. “Most of our contracts are in developing nations, where legislative systems are a little bit out of date, and they are still getting up to speed with best international practice.”

He went on to say, “Every year legislation and administrative processes and taxation change, and you have to keep up with it.” Allen has no shortage of examples to illustrate his point, citing Angola “where immigration rules change every year”, and Azerbaijan “where expats must have a degree”.

Recent changes to immigration rules in the Middle East have seen quotas imposed on workers from different countries. In India, in an effort to reduce the exploitation of workers, recruitment agencies now need a licence to send blue-collar workers abroad, where no rules exist for white-collar workers.

For many companies the more important question is how to keep in touch with changes to local legislation. Some companies have a local office in all of the countries in which they operate. Others prefer to work with accountancy firms locally to keep up to speed with changes in legislation.

Companies need to be aware of and have safeguards in place for international compliance regulations. Frances Lewis, a partner at law firm Osborne Clarke, says that even with the best will in the world, it is unrealistic to expect 100% compliance, and particularly in overseas markets. “It’s about taking a view on a risk … but with the understanding that you can answer questions from investors and national authorities.”