EXPATRIUM International Ltd
Expatriate Cost Reduction In Safe Conditions
European companies that win business contracts outside their own country need to complete their team by recruiting experts (engineers or technicians) for the duration of the project. In most European countries, the Employer National Insurance Contributions are higher than in the United Kingdom, and this means that an EXPATRIUM International Ltd secondment solutions will usually reduce the company’s expatriate salary costs.
Step 1: The European Client selects a person for a particular mission and, together, they negotiate the employment conditions (remuneration, etc.).
Step 2: EXPATRIUM validates these conditions as a function of British Employment Regulations (for example, the minimum number of days holiday per year).
Step 3: EXPATRIUM signs a working contract with the candidate who becomes his employee.
Step 4: EXPATRIUM International Ltd seconds this "employee" to the Client’s site. The "secondment contract" signed with the Client and the "job contract" signed with the employee will contain the same conditions (for example, if the termination notice is 4 months in the "job contract", the termination notice in the "secondment contract" will also be 4 months, or if the "job contract" is signed for a period of 2 years, then the "secondment contract" will also be signed for 2 years).
► EXPATRIUM Solutions Advantages
The first advantage of this formula is that no NIC is payable in the U.K. for "non-British" residents working outside the U.K, neither for employer nor for employee.
NOTE: In the case of secondment within the EU, the subject is more complex. EXPATRIUM will study each case individually and propose the most appropriate solution. To reach EU Social Security websites click here.
The second advantage is the various types of insurance cover available that are both comprehensive and appropriate to each category of expatriate.
As no NIC is payable, EXPATRIUM contracts private insurance cover (see below) for its employees. Thus, the secondment proceeds in a "safe" medical context.
The third advantage is the flexibility of British Employment Regulations (compared with certain other European countries) for both the employer and the employee.
The fourth advantage is the European Union legal context, within which this system operates and, as everyone knows, the U.K. is part of the EU.
► Insurance Cover
Depending on their age, their nationality and the duration of the secondment, EXPATRIUM’s expatriate employees may fall into several categories, and each category may be covered by various types of insurance policy (AGF, AXA Group, Ace Europe, GAN, etc.). For example, a European seconded by EXPATRIUM outside his home country, for a period of 1 year, will have the following cover:
º Medical expenses paid entirely
º Evacuation – Repatriation (including the war coverage)
º Death - temporary & permanent disability - either total or partial, whether caused or accidental
º Sick Leave
º Personal third party cover for the employee
To better understand the advantages of EXPATRIUM, let's first study the other possibilities that exist. There are two other possibilities available: "Offshore contracting companies" and "Traditional expatriate outsourcing companies".
a) Competitor 1 – Offshore contracting companies
These companies offer 3 types of service:
- Global turnkey contracting, with a margin between 40% & 60% of the final price
- Recruiting and secondment for technical assistance, with a margin between 24% & 30% of the final price
- Expatriate outsourcing - the same activity as EXPATRIUM International Ltd, with a margin between 15% & 18% of the final price
Their strong point is that they recruit their employee directly. Like EXPATRIUM, they MUST ensure that their expatriates have full insurance cover.
Their main weak point is their pricing. The first two activities mentioned above need equipment and a recruiting service, which increases the overall cost of their operation. Thus, their margin on the third activity mentioned remains mathematically much higher than EXPATRIUM's margin.
Furthermore, they avoid having too much "Expatriate Outsourcing" business, which decreases their overall margin.
Their second weak point is that their "offshore" status prevents them from working in the European Union, while EXPATRIUM can work both inside and outside the E.U.
NOTE: This system has been pioneered by a few French and German groups. For more than 15 years, they have been forming offshore companies, for their expatriate operations, to reduce their expatriate salary costs. Some of these groups have sold off their "offshore" companies, due to the problems inherent in the offshore formula: public image, ethical problems and even, in some cases, legal problems, etc.
b) Competitor 2 – Traditional expatriate outsourcing companies
Most of these are either British or Luxembourg-based.
Their main strong point is the decreasing charge rate applied with volume. The greater the invoice amount, the lower the rate charged.
Their main weak point is that they use "service contracts", i.e. the expert (or the person selected by the client) is transferred to an "offshore territory", as free-lance, through an "umbrella company". The person then signs a "service contract" with the "Traditional expatriate outsourcing company", which seconds him/her to the client’s site. This manoeuvre relieves the "Traditional expatriate outsourcing company" from all the liabilities of the employer. For example, the insurance cover provided is insufficient, as insurance cover becomes the liability of the free-lance worker, who usually prefers to save the insurance premiums, and is completely unaware of the importance of insurance (some even think that their gold credit card insurance provides sufficient cover !)
Their second weak point is their charge rate which, while it may be lower than that of the "Offshore contracting companies", remains significantly higher than the EXPATRIUM’s rate. This difference is due to the additional margin of the second company, the "umbrella company".
Their third weak point is their total ignorance of "International Mobility", unlike EXPATRIUM. Their offer therefore lacks the "International Mobility" consulting element.
c) EXPATRIUM's Unique Advantages
EXPATRIUM's solutions combine the strong points and advantages of the companies described above, but without their weak points. EXPATRIUM provides a full range of insurance cover for its expatriates, AND also applies charge rates that decrease with volume.
In addition, the EXPATRIUM offer is supplemented by:
"International Mobility" consulting
"International Remuneration" consulting
AND EXPATRIUM :
Works with an international network of experts in "International Mobility"
Accepts expatriates of any nationality
work anywhere in the world
This structure enables EXPATRIUM to study each element of the employment conditions between the Client and the Client’s expatriates, and then to propose a solution which will satisfy them both (appropriate British employment contract, best insurance cover, etc.).
Two types of company can benefit from the services of EXPATRIUM International Ltd:
European companies of all sizes, that have a high National Insurance Contributions rate in their own country, and win international business contracts in other countries. Such companies sometimes need to complete their team by recruiting experts (engineers or technicians) for the duration of their international project. In such cases, the EXPATRIUM International Ltd secondment solutions can significantly reduce their expatriate salary cost.
Technical Experts from France, Germany, Italy, Belgium or other European countries with high National Insurance Contribution rates, who would like to become free-lance or form their own company for self employment, and find international missions. Instead of setting up their self employment company, they can ask for an EXPATRIUM International Ltd employment contract, and thus avoid paying Social Security Contributions in their country of origin (NIC), and also avoid losing time with their national administration concerning their self employment company. They can thus devote themselves to their international project (becoming "free-lance" in France or Germany is not as easy as in the U.K.).
NOTE: If an expatriate works within the EU for a period exceeding 8 days, EXPATRIUM must and will pay the local NIC in the country in which the work is carried out (EU Regulation 1996).