How to negotiate an international contract
by Guest Author
Negotiating an expat or international contract is something you need to do right the first time. The impact of not getting it right will see you in an awkward and uncomfortable position for the full duration of the contract usually around 3 years.
Hindsight is wonderful, and here is some hindsight we are sure would help you.
Look at your contract as three separate issues:
For each of these it will pay you to do your homework. Make connections in your next host country, and ask questions. If your company is offering you the services of a relocation agent, then make contact with them early on. A good relocation company will have costs and ideas on your new daily life expenditure. Otherwise do plenty of research on line, join discussion groups, ask questions, and view on line grocery shops and menus to work out your anticipated expenditure.
Exchange rates and inflation, whilst these might look like they are playing in your favour when you sign a contract, this may not be the case in 2 years time. Plan with a buffer in place, and save on the up swings.
Make sure you have Internet banking set up in your home country. If your post is being re-directed, it can take time to you to realise you are in the red at home and your bank charges are soaring.
Try to split your salary between your home country and your host country. The portion of your salary in your home country should be sufficient to cover your debit there. You do not want to be transferring money backwards and forwards. The cost of transferring money, the time to do it, and the fluctuating exchange rates will add to your expenditure over a long period of time.
A very rough guide for knowing if you have enough salary to live comfortably in your new country is work out your disposable salary that you currently enjoy. Convert that into a percentage. Now, look at your proposed salary. Using all the information you have gathered either on line or through your relocation agent, work out your living expenses (renttransportutilities etc). Then, convert your new disposable income to a percentage. Do you have the same percentage to play with?
Be sure to check your tax obligations in both your home and host countries. You can end up paying double. If this is the case, your company should assist with tax relief outside of your salary.
First and foremost, check for yourself that the company has applied for the relevant visa for your situation. Mistakes can be made, and it will be at your expense if the company has made a mistake. The onus lies with you to make sure you are legally entitled to work in the host country.
Your contract should be in both your home language and in the language of the host country. Most often, if you enter a dispute, it will be held in the host country, if they dont understand your contract they cannot support you.
Your contract should also cover what happens in the event of an early termination on either side. Will you incur any costs or penalties? Will the company pay for your repatriation costs? Consider time frames of what would happen in the case of your position becoming redundant.
As scary as it might sound, what would happen to your family in the event of your death? There are so many sad stories about families suddenly found in a foreign country now illegal immigrants, and there is a dispute over your will or insurance, which is not recognised in that country.
Yes, a lot of this comes back to financial comfort, and I will touch on some additional criteria, but it is not all about the money.
Make sure that your new job is going to be challenging. There will be nothing worse than being tied up in a contract, in a strange country, that you are not enjoying.
Pre-arrange regular feedback sessions with your home country.
Negotiate flight costs home at least once a year. These are usually fairly standard practice for most companies. If you can, try to get either flights home or an equivalent priced destination so you can explore and get a proper relief.
In your contract, make sure there is a plan for your return. What will your post assignment role be?
Now, back to financial aspects that will effect your personal enjoyment. These are some of the categories you should investigate costs for:
Furniture & Appliances: Who is paying for the cost of moving your furniture? Will your appliances work in the host country, or will you need to replace will the company provide a settling in allowance to cover these incidentals.
Groceries: Most countries now have online shopping, browse and work out what your groceries may cost.
Personal care: These are essential and can take a chunk out of your disposable income, so be sure to calculate them. Clothing, dry cleaning, hair cuts, car wash.
Recreation: Do you have a favourite sport or hobby? How much will it cost?
Transport: Public transport? What distance is comfortable to commute, some countries it is too dangerous to live in the city. The further away, the more the cost. Or, are you going to have your own car? How much will it cost to park at work, or at home? Petrol cost? Insurance? Will you be eligible for a bank loan you dont have a credit history in the new country?
Children: Education costs are usually one of the biggest costs. But, also give consideration to language lessons, sports and hobbies, and after school care.
On our website, we have useful links to local service providers in Australia, you can gather a lot of your information from here. Or, if you are engaging our services, we have these statistics on hand.
In closing, remember the contract is about equalization. You need to find equal ground for both you and the company. It must be a 3-way communication between you, the home country and the host country.
Good luck and enjoy.
Over the next few weeks, I will be writing a few articles to help you with your move, but, please also feel free to contact me via email at email@example.com or you can get to know us on my Facebook www.facebookpersonnelrelocations.com.au.
Good luck! Best regards, Robyn @ Personnel Relocations
About the author:
Robyn is an ex- Durban girl (mostly) but has also lived in Johannesburg, England, Singapore, France and now lives in Melbourne Australia with her husband and two children. Robyn started Personnel Relocations to be able to share he knowledge and process of moving with others, in the hope that it would make their move less stressful and give them peace of mind. Find out more at her website (www.personnelrelocations.com.au)