Many companies from large multinationals to entrepreneurial businesses are choosing to embark on a process of corporate relocation by relocating part or all of their operations to new regions.
There are significant potential benefits to relocating abroad – access to markets, simplified compliance and cost savings are cited as key advantages.
While there are a number of cost and commercial reasons why an organisation may consider relocating, but it is also important to understand the consequences.
The key to successful business relocation is early planning, clear commercial objectives and careful execution.
We take a look at some of the pragmatic considerations for employers, including outlining the drivers of relocation, the types of activity commonly relocated and the commercial, cost and tax factors of popular relocation destinations.
Types of corporate relocation
A corporate relocation can either involve completely moving an entire workforce overseas, or could refer to a bulk relocation project involving multiple personnel.
It is important to understand the potential impact any relocation has on the operational, legal and tax affairs of the business. These are generally manageable but careful planning is necessary to ensure groups are aware of all the costs of the relocation.
Obstacles can include obtaining work permits in bulk, preparing several different employees with differing needs for cultural integration, providing the necessary support for a variety of different families, and ensuring the local infrastructure is adequate to accommodate the needs of multiple employees and their dependants.
As such, when planning and implementing a corporate move overseas, you will need to factor in all of these matters, and possibly much more. We look at each of these issues in turn below.
Workforce management
Groups must consider how any relocated function will be staffed. This may involve relocating staff or recruiting locally.
When looking to move multiple personnel abroad you will need to identify which employees will need to seek relevant permissions to work in the new jurisdiction.
These means having clarity of the nature of the roles to be undertaken overseas and residency permits that may be required, but also the
Timescales will be a concern, and issues with applications and processing times are to be avoided through effective and efficient application management to avoid delaying the move process.
Further, in the event that you are looking to start up operations as quickly as possible, perhaps where you are already incurring costs for overseas premises and equipment secured in advance, any delays in obtaining the necessary permissions to enter and undertake work in the country in question can create significant and unnecessary expense for your business. Planning in advance, especially correctly timing visa and permit applications will be crucial.
For existing staff, account must be taken of their desire to move, in addition to their ability to move in terms of work permits. Where existing staff do not want to move, there will need to be a suitable workforce available locally. Both options will have associated costs.
Employment laws also differ across the globe. When moving staff to an overseas location, or hiring new staff from the local talent market, employers should take advice specific to the jurisdiction to avoid triggering employment disputes.
Preparing for cultural integration
When moving multiple employees and their families, you will need to have in place sufficient support to help them integrate into the new host country. In this way you can pre-empt any problems and help to make the process as seamless as possible, ensuring that operations run smoothly, as well as ensuring the wellbeing and happiness of your overseas workforce.
As such, at the very least, you should provide any necessary training as to any legal and cultural differences in the host country, as well as the provision of language courses where relevant. You will also need to ensure that any training caters for the needs of all ages involved, including the dependants of any employees.
Providing family support
Following on from redeployment training and preparations, it is also important to have in place a support system following any corporate relocation.
There may be all sorts of questions and issues that can arise either at the outset of the move, or even much later on, whereby the provision of support, for example, healthcare questions or signposting to various services overseas, can make all the difference to the long-term success of the relocation.
You may even want to consider orientation tours shortly after arrival to help an employee and their families become more familiar with their new surroundings and help ease anxiety about adjusting to a new lifestyle.
Successful corporate relocations
With so many matters to factor in, it is vital that you take the necessary steps to prepare and execute your corporate relocation project to maximum effect.
The key to a successful move is careful and advance planning, thorough and meticulous preparation, and effective implementation. While you may never be able to remove all obstacles to relocation, with the right planning you can make the process less stressful and more seamless for both your employees and for your business.
Undertaking a feasibility and cost-benefit analysis, factoring in both costs and potential reputational issues,
First and foremost, you will need to identify the right personnel to create a viable plan and make the necessary preparations. Ideally, this should involve a dedicated corporate relocation team or, at the very least, effective coordination between management and HR. Here everyone will need to be clear on their role and able to communicate effectively with others as to the progress made and where any problems arise.
In a corporate relocation, even the smallest procedural problem can impact other matters, for example, any delay in obtaining work permits can delay the start date.
As such, you should have in place a clear and detailed plan, detailing the timeline for completion, any budgetary restrictions and even individual needs of different employees.
In particular, each individual will have their own subset of requirements for relocation, making a one size fits all approach generally problematic. For example, a worker with a spouse, dependant children and home ownership will have different needs to a single individual renting an apartment.
It is therefore crucial that you understand the unique requirements of successful relocation for every member of the team you are moving, working to achieve a personal and tailored experience.
You should also be absolutely clear on what the end goal is for the business and what the organisation is trying to achieve through relocating its personnel, whether the strategic drivers are, cost containment, expansion into new markets or creating a skilled workforce overseas.
In this way, you can align decision-making in the planning and implementation stages to meet these end goals.
Need assistance?
In today’s economy the demand for global mobility is increasing, not least because businesses are finding it more and more difficult to fill skilled positions and are looking to international relocation as a possible solution.
Needless to say, the threat of Brexit, with potential changes in immigration rules and the types of permissions, more complex hiring processes and a possible reduced pool of employees, has also contributed to the appeal of deploying bulk personnel, or even an entire workforce, overseas.
DavidsonMorris has significant experience in advising clients on successful relocation strategies. We support with all aspects of the process, from planning and compliance through to cost control, employee engagement and the physical and logistical demands of relocating.
Corporate Relocation FAQs
What is corporate relocation?
Corporate relocation involves moving a company’s operations, including its office space, employees, and often its headquarters, to a new location. This process can be local, national, or international.
What are the key considerations before relocating a business?
Before relocating, businesses should consider factors such as the cost of relocation, the impact on employees, potential disruption to operations, legal obligations, and the benefits of the new location. A detailed plan and timeline are crucial.
How can employers support employees during relocation?
Employers can support employees by providing clear communication, offering relocation packages, assisting with housing and schooling, and providing emotional and logistical support throughout the process.
Are there any legal requirements for relocating a business in the UK?
Employers must adhere to UK employment law, ensuring that employee rights are protected during relocation. This includes proper consultation with employees, handling redundancy if necessary, and ensuring compliance with health and safety regulations.
What financial implications should be considered?
Relocation can be costly, so it’s important to budget for expenses like moving costs, new office setup, potential tax implications, and any financial assistance or grants available. Employers should also consider the long-term financial benefits of relocation.
How do I choose the right location for my business in the UK?
Selecting the right location involves considering factors such as proximity to clients and suppliers, availability of skilled labour, infrastructure quality, and the local business environment. Conducting thorough research and consulting with experts can help in making an informed decision.
What should be included in a corporate relocation plan?
A comprehensive relocation plan should cover all aspects of the move, including logistics, budget, timelines, legal compliance, employee support, communication strategies, and post-relocation considerations. Regular reviews and adjustments to the plan are essential.
How can I ensure minimal disruption during the move?
To minimise disruption, plan the move meticulously, involve key stakeholders in the planning process, communicate clearly with all parties, and consider moving in phases if possible. Ensuring IT systems and operations are quickly set up in the new location is also crucial.
What are the common challenges faced during corporate relocation?
Common challenges include employee resistance, unexpected costs, logistical issues, legal complications, and potential downtime. Addressing these challenges proactively through planning and support can help mitigate their impact.
Can I get financial assistance for corporate relocation in the UK?
Depending on the location and nature of the relocation, businesses may be eligible for grants or financial incentives from local councils or government bodies. It’s advisable to research these options or consult with a relocation specialist.
Glossary
| Term | Definition |
|---|---|
| Corporate Relocation | The process of moving a company’s operations, including offices and employees, to a new location, either within the UK or internationally. |
| Relocation Package | A set of financial and logistical benefits provided to employees by their employer to assist with the costs and challenges of relocating for work. |
| Stakeholders | Individuals or groups who have an interest or concern in the relocation process, including employees, shareholders, customers, and suppliers. |
| Employment Law | Legal standards and regulations that govern the rights and obligations of employers and employees in the UK, particularly relevant during corporate relocations. |
| Health and Safety Regulations | UK laws and guidelines designed to ensure that workplaces are safe for employees, including those affected by a business relocation. |
| Budgeting | The process of planning and allocating financial resources for the various costs associated with corporate relocation. |
| Logistics | The detailed coordination and management of complex operations involved in the relocation, including transport, setup, and continuity of business operations. |
| Visas and Immigration | The legal documentation and processes required for employees who may need to relocate internationally as part of the corporate relocation. |
| IT and Data Security | Considerations related to the relocation of a company’s IT infrastructure and ensuring the security of data during and after the move. |
| Public Relations | Managing the communication and image of the company with the public, media, and other external parties during the relocation process. |
| Office Space | The physical location where a business operates, which may need to be acquired or renovated as part of the relocation. |
| Consultation | The process of seeking input and feedback from employees and other stakeholders to ensure a smooth transition during relocation. |
| Grants and Incentives | Financial aid provided by government bodies or local councils to support businesses in relocating to certain areas within the UK. |
| Disruption | Potential interruptions to business operations that may occur during the relocation process, which should be minimised through careful planning. |
| Phased Relocation | The process of moving different parts of the business or different groups of employees at different times to minimise disruption and ensure continuity. |
| Employee Resistance | Opposition or reluctance from employees regarding the relocation, often due to personal or professional concerns. |
| Post-Relocation Support | Assistance provided to both the company and its employees after the move, ensuring a smooth transition and adaptation to the new location. |
| Tax Implications | The potential effects on a company’s tax obligations resulting from relocation, including any changes in tax rates or benefits. |
| Relocation Consultant | A professional or firm specialising in assisting businesses with the planning, management, and execution of corporate relocations. |
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
