Executive mobility: legal risks before an international transfer

International executive transfers are often treated at first as an HR and logistics matter: which city, which housing, which school for the children. The relevant legal risks usually surface later, once they're more expensive to fix.

One of the most overlooked points is clearly defining the employment relationship during the transfer: does the executive remain employed by the origin entity under an expatriation arrangement, become employed by the destination entity, or work under a hybrid model? Each option has distinct labor and social security consequences, and the absence of a formal definition often triggers significant disputes upon termination.

Interrupting social security contributions in the origin country without planning can create meaningful gaps in the executive's contribution history, affecting future benefits. Some countries have social security agreements allowing contributions to be maintained or periods to be aggregated — but this depends on an agreement in force between the specific countries involved.

Compensation paid partly in the origin country and partly in the destination one, benefits such as housing and schooling, and bonuses tied to results measured in different jurisdictions can create exposure in more than one tax system simultaneously. The correct treatment depends on where the person is considered a tax resident — itself a matter requiring dedicated analysis.

It's necessary to verify that the immigration authorization actually covers the activity the executive will perform, not merely permission to remain in the territory. Working under a visa that does not authorize that activity exposes both the individual and the company to administrative risk.

• Repatriation clauses and what happens if the transfer ends before the planned term.
• Continuity of benefits such as health insurance and life insurance during the period abroad.
• Double-taxation rules applicable to compensation and benefits in kind.
• The situation of the executive's family, when they also relocate, including their own tax residence.
• Documentation confirming, at the end of the transfer, the correct closure of obligations in the destination country.

Fixing a poorly structured transfer after the fact usually costs far more than planning it properly beforehand.

1. 01Formally define the employment relationship applicable during the transfer period.
2. 02Check whether a social security agreement exists between the countries involved and its conditions.
3. 03Assess the transfer's impact on the executive's tax residence and, if applicable, that of their family.
4. 04Confirm the immigration authorization covers the professional activity actually performed.
5. 05Put in writing the return conditions, benefits maintained and expected duration of the transfer.

None of these points can be standardized across companies or executives: the right design depends on the role, the sector, the countries involved and the corporate group's structure in each jurisdiction.