Author:Norma Reynov,CONVINUS global mobility solutions
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International assignments do not work on the fly. Rather, they need a solid foundation on which they can thrive. On the one hand, contractually, so that the specific assignment is regulated with legal certainty. On the other hand, organizationally, so that uniform standards are apply throughout the company. This is precisely where the two instruments "international assignment contract" and "expat policy" come together.
The international assignment agreement regulates the individual case. The policy defines the rules of the game. Both sets of contracts must fit together so that international assignments not only work on paper, but also in everyday life.
In this article, we show how the international assignment agreement and the expat policy complement each other and what companies should specifically regulate so that foreign assignments remain plannable, comparable and legally secure.
- The international assignment agreement
The international assignment agreement forms the contractual basis for the foreign assignment. It supplements the existing employment contract with the key points that apply during the assignment (e.g. place of work, remuneration or fringe benefits). A completely new contract is not usually necessary. A written addendum in the form of an international assignment agreement is usually sufficient.
The following elements belong in every international assignment agreement:
- Country of assignment, duration of assignment, and return clause
- Remuneration during the international assignment, currency regulations, any supplements
- Social security and tax regulations (ideally with reference to the expat policy)
- Benefits in kind such as accommodation, relocation costs or school costs
- Applicable law, place of jurisdiction and settlement of disputes
Important for pr
The internactice:
ational assignment agreement does not replace the original employment contract, but supplements it. To ensure that there are no contradictions or room for interpretation later on, both documents should be properly coordinated.- The expat policy
An expat policy is not a mandatory document, but it is a key success factor, especially in the case of multiple international assignments or international structures within the company. It defines the basic framework: who can generally be posted (e.g. certain functions or hierarchy levels), which benefits are typically granted and which tax and social security principles apply.
Typical contents of an expat policy:
- Conditions for an international assignment (e.g. duration of assignment, target groups, approval process)
- Benefit components such as accommodation, flight costs, relocation, school, insurance
- Tax regulation (e.g. tax equalization or tax protection)
- Return and reintegration regulations
- Differentiation from other foreign assignments such as business trips, remote work or local hires
Important for practice:
A well-structured policy creates transparency, comparability and certainty for both HR and employees. It also reduces individual case negotiations and ensures that assignments can be managed efficiently and uniformly throughout the company.
- Interaction of international assignment agreement and expat policy
To ensure that assignments run smoothly, the assignment contract and expat policy must fit together perfectly. While the contract regulates the individual agreements for the specific assignment abroad, the policy forms the overarching framework on the basis of which these contracts are drawn up.
Both documents must be coordinated with each other. This is because contradictions or ambiguities often lead to questions, uncertainties or unnecessary coordination efforts in practice.
Typical stumbling blocks:
- The expat policy is not mentioned in the contract at all or only in general terms (e.g. without specifying the version).
- The international assignment agreement contains provisions that deviate from or contradict the policy.
- Changes to the policy are not properly documented or integrated into ongoing international assignment agreements.
Important for practice:
The contract and policy should not exist separately from each other. Ideally, the international assignment agreement should explicitly refer to the valid policy (with date and version) and incorporate key points from it in a consistent form. This creates clarity for both employees and internal interfaces and reduces the scope for interpretation.
- Internal roles and responsibilities
A clearly regulated international assignment process depends not only on good documents, but above all on clear responsibilities. Who is responsible for what and when? This question should be clearly answered internally in order to avoid unnecessary loops and coordination.
Typical responsibilities:
- HR controls the overall process, coordinates internally, and communicates with the employee.
- Payroll checks the payroll-relevant aspects, in particular with regard to income taxes, social security and any shadow or split payroll.
- Legal provides a legally secure contractual basis and checks local labor law requirements.
- In more complex cases, Finance / Compensation is responsible for calculations relating to remuneration, benefits, and hypotax.
Important for practice:
Assignments are teamwork. Defined roles, comprehensible processes and good documentation for contract extensions, compensation adjustments or policy updates are required to ensure that they run efficiently and legally compliant. Proper internal coordination avoids friction losses and also strengthens reliability towards employees.
Conclusion
A legally compliant and efficient foreign assignment does not happen by chance, but through the interaction of a clean contract, a clear policy and coordinated internal processes. The assignment contract regulates the individual case, while the expat policy ensures company-wide consistency. Both only work if responsibilities are clearly defined, documents are consistent and all parties involved are on board at an early stage. In the 5th and final part of this series, we use a specific case study to show how tax liability, social security, work permits, and contract design interact in practice and what really matters in everyday life of international assignments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
